Buying cryptocurrency has never been easier, and platforms like PayPal are making it even more accessible for everyday users.
As a trusted and widely used payment platform, PayPal provides a simple way to buy and hold digital currencies without the need for complex crypto exchanges.
However, like any financial tool, there are technical details to everything, including buying cryptocurrency on PayPal. You need to know how to do it perfectly so as not to encounter any issues.
In this article, we will break down how to buy cryptocurrency with Paypal in the easiest ways possible, explore the ins and outs of buying cryptocurrency with PayPal, including the advantages,
5 Supported Cryptocurrencies You Can Buy With PayPal
One of the great advantages of using PayPal for crypto purchases is its selection of well-known cryptocurrencies.
While it doesn’t offer access to the hundreds of coins available on traditional crypto exchanges, PayPal supports a few key assets that are recognized for their stability, security, and market value.
Here’s a look at the cryptocurrencies you can buy directly through PayPal:
1. Bitcoin (BTC)
Bitcoin is the original cryptocurrency and remains the most valuable and widely recognized digital asset. With PayPal, you can easily buy Bitcoin, gaining exposure to the world’s most famous cryptocurrency.
2. Bitcoin Cash (BCH)
Bitcoin Cash is a fork of Bitcoin designed to offer faster transaction times and lower fees. While not as popular as Bitcoin, BCH is still a significant player in the crypto space, and you can purchase it through PayPal.
3. Ethereum (ETH)
Ethereum is the second-largest cryptocurrency by market capitalization and the leading platform for smart contracts and decentralized applications (dApps). PayPal allows users to buy Ethereum, giving you access to one of the most innovative crypto ecosystems.
4. Litecoin (LTC)
Often referred to as the “silver to Bitcoin’s gold,” Litecoin is known for its faster transaction times and lower costs. PayPal users can purchase Litecoin as an affordable and accessible entry into the cryptocurrency world.
5. PayPal USD (PYUSD)
PayPal also introduced its own stablecoin, PayPal USD (PYUSD). This asset is pegged 1:1 to the US dollar, making it a more stable option for those who want to hold digital assets without being exposed to the volatility of traditional cryptocurrencies. PYUSD can be used for payments and transfers within PayPal’s network and is fully backed by US dollar deposits and equivalents.
Step-by-Step Guide to Buying Crypto with PayPal
Here’s a step-by-step guide to help you quickly complete your crypto purchase.
1. Buying Cryptocurrency on PayPal via the Web
- Log in to your PayPal account.
- Click on Finances from the main menu.
- Click Buy to access the cryptocurrency options.
- Select the cryptocurrency you want to purchase (Bitcoin, Ethereum, Litecoin, etc.).
- Enter the amount you wish to buy.
- You can choose the purchase frequency: daily, Weekly, Biweekly, or Monthly, or leave it as One-time (the default).
- Select your payment method (bank account, debit card, PayPal balance).
- Click Next.
- Review the transaction details.
- Click Buy Now to complete the purchase.
2. Buying Cryptocurrency on the PayPal App
- Open the PayPal app and log in.
- Tap Accounts at the bottom.
- Tap Crypto to view the cryptocurrency options.
- Tap Buy and choose your desired cryptocurrency.
- Enter the amount you wish to buy.
- Select the purchase frequency: Daily, Weekly, Biweekly, Monthly, or leave it as One-time.
- Select a start date if you choose a recurring frequency.
- Tap Next to confirm the purchase amount.
- Choose your payment method.
- Tap Authorize and Schedule to finalize the purchase.
Fees Associated With Buying Crypto on PayPal
Knowing the fees involved when using PayPal to buy cryptocurrency is essential. PayPal charges a transaction fee and may include a margin in the exchange rate, which could affect the overall cost of your purchase.
1. Transaction Fees
PayPal charges a flat fee for each crypto purchase or sale based on the transaction amount. Here’s a breakdown of the fees:
- $1.00 – $4.99 USD: $0.49 USD fee
- $5.00 – $24.99 USD: $0.99 USD fee
- $25.00 – $74.99 USD: $1.99 USD fee
- $75.00 – $200.00 USD: $2.49 USD fee
For purchases above $200, PayPal typically charges a percentage-based fee, which varies depending on the specific amount.
2. Exchange Rate Margin
The exchange rate PayPal provides when buying or selling cryptocurrency may include a margin.
This means that PayPal makes additional money by adjusting the exchange rate slightly in their favor when converting between fiat currency (like pounds sterling) and cryptocurrency (which is typically purchased in US dollars).
This margin is part of the hidden cost of buying and selling crypto and the explicit transaction fees. PayPal discloses the exchange rate and transaction fee at the time of purchase so you can review these details before confirming your transaction.
3. Conversion Fees
If you’re using a currency other than USD (such as pounds sterling or euros), PayPal will convert your currency into USD to complete the cryptocurrency purchase. This conversion can lead to additional fees, as the conversion may also include a margin that PayPal earns.
4. Bank and Card Fees
If you use a linked bank account or debit card as the funding source for your cryptocurrency purchase, your bank may charge additional fees.
This can include overdraft fees, insufficient fund fees, or other charges for which PayPal is not responsible. It’s essential to check with your bank regarding any potential fees they may apply.
Pros and Cons of Buying Crypto With PayPal
Using PayPal to buy cryptocurrency offers both benefits and drawbacks. While PayPal provides a convenient and user-friendly way to invest in crypto, it also has some limitations that potential buyers should consider.
Pros of Buying Crypto With PayPal
- Ease of Use PayPal’s platform is known for its simplicity and user-friendly interface. Whether you’re using the web or the mobile app, buying cryptocurrency through PayPal is straightforward, making it ideal for beginners. There’s no need for technical knowledge or navigating complex crypto exchanges.
- Added Security PayPal is a trusted payment platform with robust security features, including fraud protection and encryption. For those new to crypto, using PayPal can feel more secure than linking a bank account or debit card to an unfamiliar cryptocurrency exchange.
- Quick Transactions PayPal allows for quick purchases of crypto assets. You can buy cryptocurrency within minutes once you’ve set up your account. This immediacy is a significant advantage for users looking to enter the market without delays.
- All-in-One Platform PayPal allows you to buy, sell, and hold cryptocurrencies and integrates seamlessly with your existing PayPal balance and linked payment methods. This makes it a convenient option for users using PayPal for other financial transactions.
- Stablecoin Option (PYUSD) PayPal offers its own stablecoin, PayPal USD (PYUSD), which is pegged to the US dollar. This provides an option for users looking to hold digital currency without the volatility risks associated with traditional cryptocurrencies like Bitcoin or Ethereum.
Cons of Buying Crypto With PayPal
- Limited Cryptocurrency Selection PayPal only supports a handful of cryptocurrencies, such as Bitcoin, Ethereum, Bitcoin Cash, Litecoin, and its stablecoin, PYUSD. If you’re interested in investing in a broader range of altcoins or newer tokens, you must use a more traditional crypto exchange.
- High Fees PayPal’s fees for buying and selling crypto can be higher than other platforms. In addition to a fixed transaction fee based on the amount purchased, the exchange rate margin adds to the overall cost. Over time, these fees can eat into your profits, especially for smaller or more frequent transactions.
- Lack of Anonymity PayPal requires users to verify their identity, and all transactions are linked to your account. This lack of anonymity can disadvantage users who prefer the privacy that comes with using decentralized exchanges or peer-to-peer platforms.
- Market Risks While this applies to all crypto investments, it’s worth noting that PayPal’s ease of use could lead users to overlook the volatility and risks associated with cryptocurrencies. Users new to crypto may find themselves vulnerable to significant price fluctuations, which could result in losses.
Frequently Asked Questions
1. Can you use PayPal to buy crypto?
Yes, you can use PayPal to buy, sell, and hold cryptocurrencies. PayPal allows users to purchase several cryptocurrencies, including Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and its own stablecoin, PayPal USD (PYUSD).
2. Does Binance accept PayPal?
No, Binance does not directly accept PayPal as a payment method for cryptocurrency purchases. However, some third-party services or peer-to-peer platforms may allow you to use PayPal to indirectly transfer funds to Binance, though Binance does not support this.
3. How do I receive crypto on PayPal?
To receive cryptocurrency on PayPal, you must complete the account verification process. Once verified, follow these steps:
- Go to the Crypto Hub in your PayPal account.
- Select the Receive option.
- Choose the type of cryptocurrency you want to receive (e.g., Bitcoin).
- PayPal will generate a unique crypto address for you.
- Use this address to send cryptocurrency from an external wallet into your PayPal account.
4. Why can’t I buy Bitcoin on my PayPal?
If you cannot buy Bitcoin on PayPal, it may be due to account limitations. PayPal’s crypto services are only available for users with a PayPal Balance account or certain eligible US-based business accounts. If your account doesn’t meet these requirements, you may be unable to access the crypto-buying feature.
5. Can I transfer my crypto from PayPal to an external wallet?
Yes, PayPal recently introduced the option to transfer supported cryptocurrencies to external wallets. This feature requires that you generate a crypto address in the PayPal Crypto Hub before completing the transfer.
Read Also: How to Buy Crypto in Nigeria
Conclusion
Using PayPal to buy cryptocurrency offers a convenient and secure entry point for both new and seasoned investors.
However, it is essential to weigh the pros and cons before diving in. While PayPal provides a quick and hassle-free way to buy major cryptocurrencies like Bitcoin and Ethereum, its higher fees and limited coin selection may only be ideal for some.
If you’re looking for a no-fuss way to get started in crypto with the added security of a trusted payment platform, PayPal is an excellent choice.
In the end, the choice comes down to your individual needs and comfort level with cryptocurrency. Regardless of the method, always remember that the crypto market is highly volatile.