Have you heard that PayPal now allows its users to buy, sell, and hold Bitcoin directly within their accounts?
In this extensive walkthrough, I’ll provide everything you need to know to get started with purchasing and using Bitcoin through PayPal.
We’ll look at:
- PayPal’s history and offerings in crypto
- Pros and cons to buying Bitcoin on their platform
- Step-by-step instructions for web and mobile
- Analysis of user trends and fee comparisons
- Answers to frequently asked questions
So if you’ve been looking for the definitive guide on how to buy Bitcoin with PayPal, read on!
Overview: PayPal and Crypto
In October 2020, PayPal sent shockwaves through the crypto industry when they announced direct support for buying, holding and selling Bitcoin, Ethereum, Litecoin and Bitcoin Cash.
It was a landmark move from a global payments giant with over 350 million users. This immediately introduced tens of millions of people to crypto – many for the first time.
But PayPal‘s history in the crypto space has been turbulent:
Early on, PayPal outright banned crypto-related transactions. This drove many users to seek alternatives for payments and transfers.
In 2016, PayPal investments arm participated in a $50 million financing round for crypto compliance provider Chainalysis. This hinted at crypto aspirations.
By 2020, they publicly updated their crypto policies in preparation for buying/selling services.
When PayPal finally launched crypto capabilities in late 2020, price of Bitcoin pumped 15% higher – showing influence over the market.
As of 2022, PayPal has over 100 million active crypto users transacting in digital assets and has continued expanding services.
They now provide an easy introductory platform to crypto – especially for first-time buyers less familiar with complex exchanges.
However, there remain notable limitations around transfer flexibility and higher fees worth considering…
Advantages of Buying Bitcoin on PayPal
Here are some potential benefits of purchasing BTC and other crypto through PayPal specifically:
- Easier onboarding for crypto beginners
- Instant access to purchased coins in account
- Strong brand reputation and trust
- Backed FDIC insurance and other protections
Table 1 shows a comparison of deposit times for buying Bitcoin on PayPal versus popular exchange Coinbase:
| Platform | Deposit Time After Purchase |
|---|---|
| PayPal | Instant |
| Coinbase | 3-5 days |
As you can see, BTC appears immediately on PayPal compared to delayed settlement times on full-scale crypto exchanges. Great convenience factor if looking to make quick trades!
In their first year of offering crypto, PayPal also had over 11 times more crypto volume than competitor Robinhood:
- PayPal: $14.4 billion
- Robinhood: $1.2 billion
Clearly they have strong engagement among crypto users. Yet there are still a few notable limitations and downsides worth mentioning…
Disadvantages of Buying Bitcoin on PayPal
While the Payment giant has made buying crypto more accessible, their higher-than-average fees and transfer restrictions have been met with criticism.
Potential drawbacks include:
- Unable to withdraw crypto off-platform initially
- Generally higher crypto fees than exchanges
- Lower control and more limits on transfers
According to public data, typical fees for buying and selling Bitcoin on PayPal are ~2.3% – significantly higher than top exchanges like Coinbase Pro (~0.50%) or Binance.US (~0.10%).
This can seriously eat into long-term savings, so be mindful when frequently trading BTC via their platform.
There also remain ambiguities around ownership rights of crypto held in PayPal accounts. Unlike cold wallets, their infrastructure is still more opaque.
So in summary – while incredibly handy for fast transactions – more involved users may still prefer holding Bitcoin on dedicated exchanges with lower fees if planning longer-term storage or high frequency trading.
But for casually buying/holding crypto assets or sending payments, PayPal offers a solid experience.
Now let‘s get into the step-by step process…
How to Buy Bitcoin on PayPal (Web)
If you want to buy Bitcoin on a laptop or desktop computer via PayPal‘s website, follow the steps below:
Step 1) Log Into PayPal & Access ‘Crypto’ Portal
- Navigate to Paypal.com and log into your account
- Click on the "Crypto" link from account menu
Step 2) Find and Select ‘Bitcoin’
- This brings you into PayPal‘s Crypto buying/selling platform
- Scroll and click on "Bitcoin" from list of available cryptocurrencies:
- Also shows latest BTC price per coin
Note: You can also buy Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH) through PayPal
Step 3) Enter USD Amount to Purchase
- Next to Bitcoin logo, tap "Buy"
- Here you can enter exact USD value to purchase Bitcoin equivalent of
For example, if you enter $100, it will display amount of BTC that $100 will buy at current rates.
Step 4) Select Payment Method
- Choose payment method linked to account
- Can pay via PayPal balance, bank account, credit/debit cards added to your profile
Step 5) Review Order & Check Fees
- Preview order details – can still adjust quantities here
- Pay attention to trading fees charged on transaction
- Average fees around 2%, but may vary
Step 6) Confirm Buy
- With order validated, tap "Buy Now"
- BTC immediately added to your PayPal Crypto balance!
And you‘ve now successfully purchased Bitcoin through PayPal! 🎉
Watch the value fluctuate and track coins alongside other assets in "Crypto" section.
You can sell back to USD at any time or check out merchants that support "Checkout With Crypto" payments.
Now, let‘s look at the mobile experience…
How to Buy Bitcoin on PayPal (Mobile App)
If wanting to buy BTC on-the-go directly from your iPhone, Android or tablet device, here is the process:
Step 1) Download PayPal App & Login
- Download app from iOS App Store or Android Play Store
- Sign into PayPal account
Step 2) Tap ‘Crypto‘ In Home Screen
- Bottom of app homepage has a “Crypto” quick-link
- Gives overview of assets + quick access to buy
Step 3) Tap ‘Buy’ Under Bitcoin
- Shows real-time cost per BTC
- Current value in your account
Step 4) Enter Purchase Amount in USD
- Enter desired USD amount to purchase equivalent BTC
- Tap "Preview Buy" when ready
Step 5) Select Payment Method
- Choose from payment methods linked to PayPal account
Step 6) Review & Confirm Purchase
- Final chance to review purchase details
- Confirm and buy Bitcoin!
Just like that, you‘ve bought Bitcoin through PayPal mobile app as well with few quick taps!
PayPal Crypto Buyer Trends & Growth Analysis
In their first year offering crypto, user adoption and trading activity on PayPal has steadily risen month over month.
As you can see from the chart below, monthly crypto buyers on their platform has tripled from October 2020 to September 2021:
Data source: BusinessofApps.com
And from a revenue perspective, PayPal is generating meaningful income from crypto fees – $102 million+ in just Q1 2022.
In fact, CEO Dan Shulman very recently remarked crypto payments have “exceeded expectations” and possess “incredibly strong growth”.
This ramp indicates crypto purchasing via PayPal still remains highly popular with active demand.
Yet as mentioned before, users should be aware of comparatively higher trading fees charged versus other major platforms and exchanges.
For instance, typical fees to buy and sell Bitcoin on PayPal are ~2.3% per transaction according to multiple reports – generally 4-5x times higher than fees found on Coinbase Pro or Binance.US for comparison:
| Platform | Typical Trading Fees |
|---|---|
| PayPal | 2.30% |
| Coinbase | 0.50% |
| Binance.US | 0.10% |
So while PayPal wins for convenience and streamlined flows for beginners, more involved traders may want to minimize recurring fees longer term using alternative platforms.
But for the average crypto buyer looking to occasionally purchase Bitcoin online via a trusted brand – PayPal is a totally viable solution in 2022.
Just be attentive to the spread pricing and plan timed purchases during optimal rate periods. Their dynamic fees scale based on various market factors.
Below are answers some other common questions when buying crypto through PayPal.
Frequently Asked Questions
Can I transfer my Bitcoin off PayPal once purchased?
Yes! Initially to discourage illegal transactions, newly bought Bitcoin had to be held on PayPal. But recently they lifted these restrictions. Users who pass identity verification steps can now transfer crypto onto external wallets and crypto addresses.
There may still be cases where withdrawals are blocked based on regulatory scrutiny in certain states or countries. Always check latest terms.
What payment methods can I use to buy Bitcoin on PayPal app?
On both mobile and web flows, you can pay for Bitcoin purchases using any valid credit card, debit card or bank account linked to your PayPal account, including:
- PayPal balance
- VISA
- Mastercard
- Discover
- American Express
- Bank transfer (ACH)
Supported payment options will appear during checkout step.
Can I use PayPal business account to buy crypto?
At this time, the ability to buy and sell Bitcoin is still limited to personal PayPal accounts only.
If signing up with a business profile, crypto trading features unfortunately remain locked out from the platform.
What countries allow buying Bitcoin with PayPal?
As of 2022, PayPal Bitcoin purchasing is available in nearly all countries where their platform operates, with only a few exceptions, including:
- Available: US, UK, Europe, Canada
- Not Supported: India, Mexico, Parts of Africa
Refer to their documentation for latest supported geographies.
And that wraps up the key things you need to be aware of when buying and using Bitcoin via PayPal! Let me know if any other questions arise.
Footnotes:
Data sources cited include:
Images provided via PayPal press assets and screenshots from PayPal app. Charts created via ChartBlocks.
