How to Buy Crypto with PayPal and What You Should Consider

Max Levchin created PayPal to redefine international transactions. The company’s entry into cryptocurrencies is an attempt to maintain its leadership in the cross-border payments sector. While the company has made great strides, the regulatory and centralized nature of PayPal makes its alignment with cryptocurrencies a little fuzzy.

If you are planning to buy crypto using PayPal, you should know that:

• You can buy, sell, or hold cryptocurrencies via your PayPal account just like you can with fiat currencies.
• The difference between fiat and crypto currencies is that you can buy fractions of cryptocurrencies according to your budget and start with as little as $1.
• Cryptocurrencies are extremely volatile, which is why risk assessment is vital.
• Crypto sales are taxable as per the laws of your country of residence.

Buying cryptocurrencies is quite similar on both PayPal’s app and website.

Here are the steps to purchase cryptocurrencies using the PayPal mobile application:

1. Download the PayPal app, open an account, and complete the KYC process.
2. Tap the Crypto button in the Finances tab.
3. Discover the cryptocurrencies with their prices from the Explore Crypto window.
4. Tap the Buy button to purchase your chosen cryptocurrency.
5. Read and accept the terms and conditions by clicking on Agree and Continue.
6. Enter the amount in your fiat currency that you wish to buy.
7. Choose a payment method and tap Buy Now.
8. Pay and get the cryptocurrency of your choice in your PayPal account instantly.

From acquiring a cryptocurrency custody firm (Curv) to exploring stablecoins and facilitating more crypto trading on the platform, the fintech giant is steadily enriching its features for the growth of crypto commerce.

At present, users can do the following on PayPal:

1. Send and receive crypto from verified and eligible PayPal accounts.
2. Buy, hold, or sell cryptocurrencies to diversify their financial portfolio.
3. Use crypto to pay for their purchases at the checkout for vendors that accept crypto
4. Transfer their crypto between exchanges and standalone wallets to take complete control over their holdings.

Here are the features that users would most like to see added to the PayPal app in the future:

1. A higher number of cryptocurrencies.
2. Crypto coin staking, pooling, and lending directly from the app.

In an interview Jose Fernandez da Ponte, the SVP and General Manager of Blockchain, Crypto, and Digital Currencies at PayPal, said that the team is determined to facilitate the use of cryptocurrencies for buying NFTs and interacting with blockchain-based games from the platform directly.

Buy, hold, or sell cryptocurrencies to diversify their financial portfolio

PayPal updated the fee for cryptocurrency transactions in March 2022 in a move to improve transparency and simplify the fee structure. At present, smaller crypto transactions have a higher percentage fee.

The current charges are:

PayPal has given its users the opportunity to gain exposure to digital currencies in a simplified manner. However, every coin has two sides:

Pros

• It offers an intuitive and convenient user interface. PayPal users are familiar with the interface, and buying any cryptocurrency is like buying products from any of the sellers on the platform.
• Users who are not that tech savvy can rest assured that their private keys are secure, and they do not have to worry about the security of their funds.
• It is a convenient way to acquire cryptocurrencies for those in countries where crypto is banned.
• All transactions get settled within minutes.

Cons

• It neither gives the private key nor complete ownership of the cryptocurrencies to the user, which contradicts the purpose of digital money.
• PayPal is a trusted platform. Therefore, users often do not perform any due diligence before starting to buy cryptos.
• It has a reputation for charging a higher fee than its peers, and the same reflects in cryptocurrency transactions.
• The platform has limitations on how much crypto an account holder may purchase.
• Only a few selected coins are available for purchase.

Buying crypto coins from PayPal is widely considered a form of derivative trading, as users do not get complete ownership of their holdings.

This is useful in some scenarios:

1. Users who do not understand blockchain technology, which is the foundation of cryptocurrencies, can still get exposure to cryptos.
2. Technophobic users often find managing public and private keys for the security of their digital wallets rather cumbersome.
3. Users who have continuous money flowing in and out of their PayPal accounts can seamlessly start investing in cryptocurrencies within a few clicks.
4. Those who like to speculate on the global financial markets with quick and frequent trades can now take advantage of crypto price movements. They do not have to enter the decentralised or Web 3.0 domains with dedicated apps.
5. It helps those who believe in HODL (hold on for dear life), a crypto investment technique where users buy cryptos to hold them till they give large returns.

Some of the top cryptocurrency exchanges facilitate buying cryptocurrencies using a PayPal account. These exchanges offer facilities such as staking, lending and CFD trading for cryptocurrencies. Here’s a list you can refer to:

This is a comprehensive Web 3.0 services provider that offers the facility to transition from an exchange to an entertainment hub with a toggle button. Users can purchase any service they want and even grow their funds by staking or trading via the multipurpose account.

This is a trading-focused broker that allows traders to take advantage of price movements in cryptocurrencies. It is a one-stop platform for active traders with the facility to trade commodities, currencies, stocks, and indices. The broker offers maximum leverage on crypto of 50:1, with a 2% margin for crypto trading.

This popular crypto broker accepts payments via a wide variety of payment methods. It is a great place to speculate on BTC prices via CFDs if you are outside the USA, rather than buying Bitcoin directly. eToro also supports social trading and copy trading for cryptocurrencies for clients outside the United States.

This is a very well-established exchange with lower trade limits than other exchanges. However, transferring crypto back to the PayPal account is not possible. It has a daily limit of $2,500 and a monthly limit of $20,000 for crypto transactions.

If you want to buy cryptocurrencies without relinquishing control of your assets and ensuring decentralized ownership, you can try an alternative method to buy crypto. First, you’ll need to create an account on a crypto exchange or a crypto wallet and then fund your account via traditional payment methods. You can then purchase the cryptocurrency of your choice.

Many exchanges facilitate crypto transactions via net banking from user accounts. Once you open an account on the exchange, you receive a public and a private key, which are the two essentials of holding cryptocurrency. You can then fund your account with fiat currency.

The top exchanges that enable bank account transactions are:

EX.io: The exchange has a wide selection of cryptocurrencies and does not charge a deposit fee for transferring from a bank account. It is one of the oldest and most trusted crypto brokerage service providers.

Bitpanda: It offers diverse payment options at a relatively low fee. The fee is incorporated within the exchange rate, which makes it easier for beginners. It also has a very intuitive interface.

Kraken: This is the largest crypto exchange in Europe by volume and trading activity. It has earned itself a good reputation and has low deposit and transaction fees.

To buy crypto via a crypto exchange with a debit or a credit card, you need an account on a crypto platform that allows card transactions.

Here’s a list of exchanges that facilitate buying cryptocurrencies with traditional debit or credit cards:

Binance: It has the largest altcoin selection, allowing users to invest in a cryptocurrency of their choice. It accepts payments from the widest modes and has an ultra-low fee of 0.10% for spot transactions.

Coinbase: One of the torchbearers in the crypto space, Coinbase has established itself as a trusted and popular crypto exchange. It facilitates fast transfers but serves a limited number of locations.

Visit an ATM: You can visit a crypto ATM and use your card to get crypto like you get chocolates from a vending machine.

There are 3 ways to buy crypto with cash:

1. Buy from P2P exchange: Bybit is a trusted place to buy Bitcoins. It also holds your money securely till the transaction is complete.
2. You can walk up to a crypto ATM and place your order: The machine gives a few instructions, and the transaction is finalized after you scan the wallet QR code. Finally, the machine displays the amount of cash to be paid. It includes convenience charges for using the ATM.
3. Finally, you may buy crypto from an individual who owns it, and you trust enough to transfer the digital money into your account on the payment of cash in person.

Crypto exchanges provide you with the tools needed to buy and sell bitcoin and of course also a wide range of cryptocurrencies. When choosing a crypto exchange, you can consider factors like the range of cryptos it supports, fees, payment methods, and security.

At Coin Hint we understand that investing in cryptocurrencies can seem complex. PayPal presents a simple way to get exposure to digital currencies without having to worry about the security aspects. However, if you prefer complete ownership, you need to have your own crypto wallet. You can purchase your chosen crypto from a seller using your PayPal wallet or any other mode.