Best Ways to Buy Bitcoin With PayPal: Beginners Guide 2024

Buying Bitcoin has become significantly easier over the past few years. A growing number of exchanges, simplified purchase processes, and a larger selection of payment methods mean people can get some Bitcoin, even when they aren’t technically inclined.

One of the top payment processors in the world is Paypal, so it shouldn’t come as a surprise that many people would like to use Paypal to buy Bitcoin. Unfortunately, PayPal's chargeback policy, which allows charges to be easily reversed, combined with the irreversible nature of Bitcoin transactions, means there aren’t many exchanges willing to accept PayPal.

There are a few ways to buy Bitcoin with PayPal, but they aren’t as straightforward or easy as the most popular methods of purchasing Bitcoin. It can be done, though, and that’s why we’ve put together this guide to the 3 best ways to buy Bitcoin with Paypal.

3 Ways to Buy Bitcoin with PayPal

There are basically three options for buying Bitcoin via Paypal currently:

1. Peer-to-peer (P2P) exchanges – These are similar to exchanges. Still, rather than acting as a third party in the exchange transaction, they simply exist to allow buyers and sellers to find each other and then transact separately from the exchange. These P2P marketplaces were the first way to exchange fiat for Bitcoin, and they remain popular thanks to their emphasis on decentralization, privacy, and anonymity. Because the buyers decide what payment method to accept, it is possible to find buyers who will accept PayPal on the P2P marketplaces.
2. Cryptocurrency exchanges – Several centralized cryptocurrency exchanges offer PayPal as one of the payment options on their platform. For instance, Coinbase is well known in the US, while KuCoin is more prominent internationally.
3. Buying Bitcoin directly on PayPal: PayPal also offers Bitcoin buying and trading to customers in supported countries on its platform. However, PayPal acts as the custodian of users' crypto holdings. Therefore, while this is the easiest method to own Bitcoin, there are some ownership-related considerations users must know about.

Below you can find an example and guide to a platform for each of the above service types.

P2P Marketplace: LocalCoinSwap

LocalCoinSwap is a P2P cryptocurrency marketplace where you can buy or sell supported coins and tokens in exchange for fiat currency. It supports several countries and all major crypto assets and stablecoins. Buying Bitcoin on LocalCoinSwap using PayPal involves a process similar to using other payment methods, with specific considerations due to PayPal's unique features. Here's a step-by-step guide:

Step 1: Register and Secure Your Account

• Sign Up: Go to LocalCoinSwap and create an account by providing your email and creating a password.
• Email Verification: Verify your email by clicking on the verification link sent to your inbox.
• Enable 2FA (Optional): For additional security, enable two-factor authentication on your account.

Step 2: Find a Suitable Offer

• Log In: Access your LocalCoinSwap account by logging in.
• Search Offers: Navigate to the 'Buy Bitcoin' section. Use the filter options to select 'PayPal' as the payment method.
• Evaluate Offers: Review the available offers, focusing on the exchange rate, seller's reputation, and any specific terms or requirements.

Step 3: Start a Trade

• Understad the Seller: Before initiating a trade, thoroughly read the seller's terms of trade.
• Initiate Trade: If you're comfortable with the terms, enter the amount of Bitcoin you want to purchase and start the trade. This action will open a trade chat and lock the Bitcoin in escrow.

Step 4: Pay with PayPal

• Payment Details: The seller will provide their PayPal details. Make sure the name on the PayPal account matches the seller's name on LocalCoinSwap.
• Send Payment: Log into your PayPal account and send the agreed amount to the seller’s PayPal account. Ensure you follow the seller's instructions precisely to avoid disputes.
• Keep Proof of Payment: Save the payment receipt or any proof of the transaction. This could be necessary in case of disputes.

Step 5: Confirm and Receive Bitcoin

• Notify the Seller: Once you've made the payment, inform the seller and confirm it on the LocalCoinSwap platform.
• Release of Bitcoin: After the seller verifies the payment, they will release the Bitcoin from escrow into your LocalCoinSwap wallet.
• Check Your Wallet: Verify that you've received the Bitcoin in your LocalCoinSwap wallet.

Step 6: Complete the Trade 

• Feedback: Leave feedback for the seller based on your experience. This helps other users in making informed decisions.

Important Considerations When Using PayPal

• Chargebacks: PayPal is known for its chargeback feature. Some sellers may be hesitant to accept PayPal for fear of fraudulent chargebacks. Be prepared to provide additional verification to the seller if requested.
• Fees: Be aware of any PayPal fees that may apply, as they can affect the total cost of your Bitcoin purchase.
• Communication: Keep all communication within the LocalCoinSwap platform to ensure there's a record in case of disputes

By following these steps and considerations, you can securely purchase Bitcoin on LocalCoinSwap using PayPal. Always prioritize safety and due diligence when engaging in peer-to-peer transactions.

P2P Marketplace: Paxful

If you are looking for an alternative to LocalCoinSwap then Paxful is probably your next best bet. Like LocalCoinSwap, this is a Peer-to-Peer marketplace where you can buy Bitcoin from the online sellers.

You will need to create a Paxful account in order to take part in the marketplace. You will also need to have a verified USA-based PayPal account. You can get a verified account on PayPal, assuming that you have linked your bank account and credit card and have submitted some ID documentation.

Using Paxful works much the same was as you would with LocalCoinSwap. You will need to search for the best deals according to your criteria. Below we have searched for all of the offers that are available for a PayPal purchase of our chosen amount.

Each of the listings will disclose what they require from you before they will authorize the purchase. As is the case with other P2P marketplaces, you will want to make sure that you are using a seller that has a good reputation in the community. Below is the seller profile of the top-ranked Paxful seller according to our criteria.

As you can see, ROIWITHME has been verified and has completed over 19,000 trades on the platform. His rating is also pretty outstanding for a P2P seller. However, if you are going to be trading with this seller then he will need a copy of your photo ID.

Lastly, Paxful also has a handy escrow service which you can use to help facilitate the transaction. Of course, when you are using PayPal the seller is less likely to pull a fast one. This is because of the strict buyer protections they have implemented.

Buying Bitcoin With PayPal on Centralized Exchanges

When buying Bitcoin using PayPal on cryptocurrency exchanges, it's essential to understand the nuances of each platform. While exchanges like Coinbase and Kraken serve US customers and offer relatively straightforward processes, international exchanges like KuCoin provide global access but might have different procedures. Each platform has its own set of fees, security measures, and user interfaces, making it crucial for users to be aware of these details to ensure a smooth transaction process.

We made a dedicated guide to buying Bitcoin in the US, which includes updated steps and some new buying avenues opened up recently, like Bitcoin ETFs.

Buying Bitcoin with PayPal on Coinbase (For US Customers)

Step 1: Create and Verify Your Account

• Sign Up: Register on Coinbase by providing your email and personal information.
• Account Verification: Verify your identity by submitting the required KYC (Know Your Customer) documents.

Step 2: Link Your PayPal Account

• Payment Methods: Navigate to the payment methods section.
• Add PayPal: Select 'Add a payment method' and choose PayPal. You'll be redirected to PayPal to log in and authorize the link.

Step 3: Buy Bitcoin

• Buy Crypto: Go to the 'Buy/Sell' page and select Bitcoin.
• Choose PayPal: Select PayPal as your payment method.
• Purchase: Enter the amount of Bitcoin you want to buy and complete the transaction.

Step 4: Secure Your Bitcoin

• Wallet Transfer: Consider transferring your Bitcoin to a personal hardware wallet for enhanced security.

Buying Bitcoin with PayPal on KuCoin (Internationally Available)

Step 1: Register and Secure Your Account

• Sign Up: Create an account on KuCoin.
• Verify Identity: Complete the KYC verification for enhanced account security and higher transaction limits.

Step 2: Add Funds Using PayPal

• Deposit Fiat: Although KuCoin might not directly accept PayPal, you can use PayPal to buy USDT or another stablecoin on a P2P platform.
• Transfer to KuCoin: Transfer your purchased USDT to your KuCoin account.

Step 3: Buy Bitcoin

• Market Search: Find the BTC/USDT pair in the market section.
• Trade: Use the USDT to buy Bitcoin on the KuCoin platform.

Step 4: Manage Your Bitcoin

• Wallet Storage: Ensure your Bitcoin is stored securely, either in KuCoin's wallet or transfer it to a private wallet.

Valuable Considerations and Implications

• Fees: Be aware of the transaction fees associated with PayPal and the exchange.
• Security: Always prioritize the security of your funds. Utilize two-factor authentication and consider using a hardware wallet for significant amounts of Bitcoin.
• Transaction Speeds: Transactions might not be instant due to the nature of blockchain confirmations and exchange processing times.
• Regulatory Compliance: Ensure you're compliant with your local laws and regulations when buying cryptocurrencies.

Buying Bitcoin on PayPal

Buying Bitcoin directly through PayPal is a straightforward process, offering a user-friendly way for individuals to enter the cryptocurrency market. However, it's crucial to understand the implications and considerations associated with this convenience. When you buy Bitcoin on PayPal, you're subject to PayPal's terms and conditions, which may include fees, limitations on how you can use your Bitcoin, and restrictions on transferring your Bitcoin to other wallets or exchanges. It's also important to consider the security aspects and the fact that you do not get the private keys to your Bitcoin, meaning you're entrusting PayPal with your asset's custody.

Step-by-Step Guide to Buying Bitcoin on PayPal

Step 1: Set Up a PayPal Account

1. Create an Account: If you don't already have a PayPal account, visit the PayPal website or download the app to create one. Provide the necessary personal information, such as your name, email address, and bank account or card details.
2. Verify Your Account: Complete any verification processes required by PayPal, which may include confirming your email address and linking your bank account or card.

Step 2: Add Funds to Your Account

1. Link Your Bank Account or Card: If you haven't already, link a bank account or card to your PayPal account to fund your purchases.
2. Deposit Funds: Transfer funds from your bank account or card to your PayPal balance to prepare for your Bitcoin purchase.

Step 3: Purchase Bitcoin

1. Navigate to Crypto Section: On the PayPal dashboard, find the crypto section or use the search feature to locate the option to buy cryptocurrencies.
2. Select Bitcoin: Choose Bitcoin from the list of available cryptocurrencies.
3. Buy Bitcoin: Enter the amount of Bitcoin you wish to purchase or the amount of fiat currency you want to spend. Review the transaction details, including any fees and the exchange rate provided by PayPal.
4. Confirm Purchase: Finalize your purchase by confirming the transaction. Your Bitcoin will be added to your PayPal cryptocurrency balance.

Step 4: Manage Your Bitcoin

1. View Your Balance: You can view your Bitcoin balance and transaction history within the PayPal app or website.
2. Selling or Spending: If you decide to sell your Bitcoin or use it for purchases with merchants who accept PayPal for cryptocurrency transactions, you can do so directly through the platform.

Important Considerations and Implications

• Ownership: When you buy Bitcoin on PayPal, you're buying a representation of the asset. You won't have access to the private keys or the ability to transfer your Bitcoin to other wallets.
• Fees: Be aware of the fees associated with buying, selling, and potentially using Bitcoin on PayPal, as these can vary and affect your investment.
• Liquidity and Accessibility: While buying Bitcoin on PayPal offers convenience, it may limit how you can use or transfer your Bitcoin compared to traditional cryptocurrency exchanges.
• Security: Consider the security implications of holding cryptocurrency in a PayPal account versus a dedicated cryptocurrency wallet.

Conclusion

While you can buy Bitcoin with PayPal, it can be pretty expensive. You’ll also be limited at first in how much you can buy, and there aren’t a whole lot of choices for platforms to make the purchase. However, you’ll be glad to have the information if you have to use PayPal.

The best platform for you will depend on your own needs. Check each one and see which seems to work best. Everyone is different and while LocalCoinSwap might be best for some people, others will prefer Coinbase or Paxful.