Buy Bitcoin with PayPal

Buy Bitcoin with PayPal

PayPal is an online payment platform that helps individuals and companies to accept and make payments to users around the world. 

Founded in 1998 (as Confinity), PayPal is one of the pioneers of digital payment solutions. Over the past two decades, PayPal has established itself as the most secure payment system in over 200 countries

Although digital payment apps like Paytm, Google Pay and PhonePe have been at the forefront of mobile payments in India, over 40% of Indian consumers use PayPal’s payment app. It is also the only platform that provides both domestic and cross-border payments in India. No wonder why many crypto enthusiasts in India consider buying Bitcoin (BTC) using PayPal. 

Let’s face it – buying Bitcoin can be tricky and overwhelming to many of us. That’s why I’ve put together a thorough guide on how to buy Bitcoin using PayPal. I’ll explain the advantages of PayPal, its drawbacks and how you can buy Bitcoin with it. I’ll also briefly touch upon PayPal’s role in the crypto space. 

If that sounds interesting to you, read on!

 

Best Places to Buy Bitcoin with PayPal

1.
localbitcoins logo localbitcoins logo

Mentioned in Forbes Magzine!

- UPI & PayTM

2.

Use your PayTM!

 

Bitcoin Vs. PayPal 

At first glance, PayPal might seem like one of the payment methods you can use to buy Bitcoin. But when you take a closer look, the association between Bitcoin and PayPal is much more than just a cryptocurrency and a payment option. 

Let me explain what I mean. 

Although one is billed as the currency of the future and the other as the payment behemoth, both Bitcoin and Paypal were created as a solution for transferring money easily over the internet. Naturally, they gained a lot of attention as options for international money transfers. 

For obvious (blockchain-related) reasons, I won’t be drawing parallels between these two payment technologies. However, I’ll compare some of their fundamental aspects as a way to classify how these two systems work. 

Feature Bitcoin PayPal
Governance Decentralized  Centralized
Purpose Store of value Payment service
Utility Operates outside the mainstream finance Eliminates financial intermediaries
Transaction Immutable Payments can be reversed
Location Censorship-resistant Over 200 countries
Storage Any bitcoin-supported wallet PayPal wallet

 

Recently, PayPal announced its entry into the cryptocurrency market. When this comes into effect, PayPal’s 346 million users worldwide will be able to buy and sell bitcoin and other cryptocurrencies directly from their PayPal account. More on this later. 

 

Benefits of PayPal 

When it comes to buying Bitcoin (or any other cryptocurrency), there’s no one “best” payment method. Each payment option has its pros and cons – so it all depends on your convenience and affordability

  1. Account Creation: Opening a PayPal account is quick and easy. Also, it is free of charge.
  2. International Transfer: PayPal is available in over 200 countries – so you can buy bitcoins from international traders. Since PayPal supports multiple currencies, the amount you enter in INR will be converted to the recipient’s currency. 
  3. Secure Transaction: PayPal has an incredibly robust encryption protocol to prevent theft and fraud. If there’s any suspicious activity, their security team will investigate and resolve the issue.  
  4. Privacy: With PayPal, you can pay using only your email address. Since your financial information won’t be shared with the seller, there’s no risk of exposing your card details. 
  5. Speed of Payment: Unlike some bank deposit methods, PayPal transactions are instant. And since there’s a PayPal app, you can use them on the go!

 

Best Crypto Platforms that Support PayPal 

There are not many crypto trading platforms in India that offer PayPal as a payment method. Here’s my recommended list of crypto platforms where you can buy Bitcoin with PayPal. 

1.
localbitcoins logo localbitcoins logo

Mentioned in Forbes Magzine!

- UPI & PayTM

2.

Use your PayTM!

 

Step-by-step Guide to Buy Bitcoin from PayPal 

Before we get into the details, it is essential to mention that you can’t buy Bitcoin directly using PayPal in India – at least not yet. 

Here, I’ll be using LocalBitcoins as an example to guide you through the buying process. But you can follow these steps to buy Bitcoin on other crypto platforms. If you need more information on LocalBitcoins, you can refer to my LocalBitcoins review

 

Step 1: Create a PayPal Account 

To create a PayPal account in India, you need the following: 

  • Email ID (this will be your PayPal ID)
  • PAN Card 
  • Bank Account (Account number and IFSC)
  • Credit/Debit Card 

In the sign-up process, you will be prompted to describe your business. After which, you can link your bank account with your PayPal account. 

To verify the bank details, PayPal will send two small transactions to your bank account, which you will have to confirm. You can also link your credit and debit cards under Payment Methods

PayPal New Account

 

Here are some additional details that will help you transact without any difficulty. 

  • Make sure your bank is on the list of banks that supports card transactions through PayPal.   
  • The name on your bank account should match the name on your PayPal account. 
  • Activate international transactions on your card if you want the option to buy Bitcoin from sellers outside India. You can do this by logging into your Net banking > Cards > Credit/Debit Cards > Request > Enable International Transaction. 
  • To receive local INR payments, you need to verify KYC. 

 

Step 2: Open a LocalBitcoins Account 

Navigate to the LocalBitcoins Sign up page and register your account. The account set up is pretty straight forward, so you will ease through it. 

Also, your LocalBitcoins account comes with a free Bitcoin wallet to store your bitcoins. 

LocalBitcoins Account Registration

 

Step 3: Select PayPal as the Payment Method

Go to the LocalBitcoins main page, and click on the Buy bitcoins menu. 

Select PayPal from the “All online offers” dropdown under Quick Buy. Once you tap on search, you will see a list of traders who are willing to sell bitcoins as PayPal as the payment method. 

Buy Bitcoin using PayPal

 

Step 4: Pick a Trusted Seller  

Since you will be buying bitcoins with an actual person, you need to choose the right seller based on their credibility

A rule of thumb to pick a trusted seller is to see their number of confirmed trades and feedback score. I recommend you go through a few user profiles before deciding on the right candidate. 

You can find more information on the trader by clicking on their profile. Other details like previous feedback, ID and name verifications will help you gauge a trader’s reputation

LocalBitcoins Trader Profile

 

Step 5: Initiate Trade Request 

After you pick a trader, click the Buy button on their advertisement. Read the Terms of trade section carefully as these are instructions from the seller. 

Then enter the amount of INR you’d like to buy bitcoins and click the Accept terms and send trade request button. 

LocalBitcoins Trade Request

 

Step 6: Pay the Seller 

As a means to safeguard the buyer from scams, LocalBitcoins will hold the seller’s bitcoins in escrow for 60 minutes

To send money to the seller, login to your PayPal account and navigate to the Money page. Click Send or Request, enter the seller’s email and click Next.  

Enter the amount you want to send and click Continue. Then choose your desired payment option and click the Send Payment Now button.

PayPal Send Payment

 

Step 7: Confirm Your Payment Status

After you’ve made the payment, go back to the advertisement page on LocalBitcoins.

You need to attach a screenshot of your PayPal payment confirmation and click on the I have paid button. 

Once the seller verifies your payment, LocalBitcoins will move the bitcoins from escrow to your LocalBitcoins wallet

 

Note: You can also buy other crypto with PayPal. 

 

Things to Consider When using PayPal 

While buying bitcoin with PayPal can be a convenient process, it tends to come with a higher fee

Although P2P platforms like LocalBitcoins or Paxful don’t charge a separate fee for the PayPal option, the sellers there typically charge a premium fee on their price/BTC. 

And in other cases, the crypto exchanges may charge an extra fee for choosing PayPal as the payment method. 

Also, PayPal’s fee structure varies depending on the type of transaction (domestic/international). You can find more about PayPal fees here. 

If you want to lower your cost, you can buy bitcoin using your debit/credit card directly (without using PayPal). The fees are much lower with those methods. 

 

How to Transfer Bitcoin to PayPal 

If you want to cash out your bitcoins, you can use PayPal and convert your BTC to INR. 

Similar to the buying process, you can’t directly sell your BTC using PayPal. To withdraw your bitcoin to PayPal, you have to use a marketplace like LocalBitcoins to sell your bitcoins. 

Navigate to the Sell Bitcoins page on LocalBitcoins and choose PayPal from the All online offers dropdown. Pick a trusted buyer and open a trade request. 

So in this method, the buyer will send INR to your PayPal account, and you will send the bitcoins to the buyer’s LocalBitcoins wallet. 

 

Well, there you have it! 

There’s obviously no one payment method that suits everyone’s needs. But if you’re planning to buy bitcoin with PayPal, I suggest you weigh the pros and cons to decide if it’s the right option for you.