Key Takeaways
- While the relationship between PayPal and crypto had a rocky start, overtime, PayPal started integrating crypto into its services;
- You can buy Ethereum with PayPal directly on the platform, as well as Bitcoin, Bitcoin Cash, Litecoin, and PayPal USD (PayPal's own stablecoin);
- You can also buy Ethereum with PayPal on some popular crypto exchanges like Coinbase.
When it comes to easy online payments, PayPal is among the more prominent names. It’s mostly associated with fiat (government-issued) currencies, but you can actually buy Ethereum with PayPal, too.
You can even buy more than ETH. PayPal allows users to purchase several digital assets for a price as low as $1. This initiative can ultimately lead to a more widespread acceptance of crypto among the wider audiences, who mostly use only centralized, mainstream applications.
So, in this tutorial, I will take a closer look at how to buy Ethereum with PayPal, the intricacies surrounding the topic, as well as some pros and cons regarding PayPal’s crypto venture. Additionally, I'll talk about buying ETH on crypto exchanges like Binance, Coinbase and Kraken (where you might even be able to use PayPal as a payment method, too).
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Table of Contents
PayPal and Crypto
Before getting to the "how to buy Ethereum with PayPal" part, let's talk about the relationship between PayPal and the crypto world.
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PayPal and crypto have developed a complex relationship over the years, marked by both acceptance and caution. Initially, PayPal was wary of cryptocurrencies due to their volatility and regulatory uncertainties. However, as the popularity of cryptocurrencies grew, PayPal began to explore ways to integrate them into its platform.
In October 2020, PayPal made a significant announcement by allowing its users to buy, sell, and hold select cryptocurrencies directly within their PayPal accounts. This move marked a major milestone for both PayPal and the cryptocurrency industry, as it provided mainstream access to digital assets for millions of users worldwide.
Currently, PayPal supports a limited number of cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, Litecoin, and PayPal USD. Crypto on PayPal opens up a world of possibilities for users, allowing them to buy, sell, hold, and transfer various cryptocurrencies securely within their PayPal accounts.
Users can seamlessly send and receive crypto between eligible confirmed personal PayPal accounts, Venmo, and other supported wallets and exchanges. Through the "Checkout with Crypto" feature, users can even sell crypto and use the proceeds to pay for purchases through their PayPal accounts.
Receiving crypto into a PayPal account is straightforward, requiring users to select the receive option in the crypto hub, choose the desired cryptocurrency type, and generate a unique crypto address. Similarly, sending crypto out of PayPal is facilitated by an additional level of account verification, after which users can transfer crypto to external addresses.
It's important to note that crypto transfers are irreversible due to the nature of blockchain protocols. Therefore, users must exercise caution when entering recipient addresses to avoid potential loss of funds. Additionally, network fees, incurred during transfers, are separate from PayPal crypto transaction fees and may vary depending on network congestion.
Though, if you're looking for how to buy Ethereum with PayPal at the lowest fees, the fees offered by the payment provider are pretty decent.
Now, while transfers into or out of PayPal typically take around 2 hours to complete, this timeframe may vary based on the chosen cryptocurrency and network conditions. Users should also be mindful of weekly transfer limits, which cap cryptocurrency transfers at $10,000 per week for both internal and external transactions.
Besides, despite its convenience, PayPal Purchase Protection does not cover transactions involving cryptocurrencies, including purchases, sales, or transfers. Furthermore, users should be aware that crypto transfers can fail for various reasons, such as network issues or system downtime, and PayPal does not control cryptocurrency networks.
Overall, while PayPal's integration of cryptocurrencies represents a significant step forward for mainstream adoption, it also highlights the complexities and challenges of bridging the traditional financial system with the world of digital assets[1]. As the crypto market continues to evolve, it will be interesting to see how PayPal adapts and expands its offerings in this space.
PayPal USD (PYUSD)
Speaking of PayPal crypto adoption, the platform has launched its own digital asset – PayPal USD (PYUSD).
PYUSD is a stablecoin backed by US dollar deposits, US treasuries, and similar cash equivalents. Its value is pegged 1:1 to the US dollar, meaning 1 PYUSD equals 1 USD. Stablecoins like PYUSD are designed to maintain a steady value over time relative to a reference asset, providing broad access to the financial system and facilitating fast and efficient money movement.
It's issued by Paxos Trust Company, LLC, with a commitment to transparency. Paxos provides monthly reports on the composition of the reserve asset portfolio, which are verified by an independent third-party accounting firm.
PYUSD can be bought and sold on the PayPal app or website. Its holders can transact with PYUSD without incurring fees for buying, selling, holding, or transferring to eligible US PayPal Balance accounts. However, there are fees for converting between PYUSD and other cryptocurrencies. The fees depend on the conversion amount, ranging from $0.49 to 1.45% of the conversion amount.
By the way, PYUSD can serve as the foundational payment layer for developers seeking to create innovative services and products on public blockchains. Initially deployed on Ethereum, a blockchain renowned for its programmability, PYUSD seamlessly integrates with leading exchanges, wallets, and decentralized applications (dApps).
How to Buy Ethereum with PayPal?
So, how to buy Ethereum with PayPal? Well, there’s one main, surefire way to securely obtain your assets, and that’s direct buying. On your PayPal account, you can see a clear indication to purchase crypto, among other services that the platform offers.
Once you select the option to buy digital assets, you’ll be presented with the list of available coins. Obviously, if you want to buy Ethereum with PayPal, you will select this particular coin, which will move you to a new window.
Essentially, buying crypto on PayPal is a simple process. You’ll be presented with a window that displays some brief information on the current status of the asset, and there will be some set prices you can pick for the purchase ($20, $50 and so on, presented in several increments). This can benefit you if you’re looking for a quick buy option, but you can also manually input the price you want.
Once you’re satisfied with your choices, you can select a payment method. PayPal, of course, supports credit / debit cards; you can either select an existing one or register a new one. There’s also the bank transfer option. On top of that, there’s the PayPal account balance, which is one of the primary payment methods associated with the platform.
After you complete these steps, you will receive a review window where you can double-check that all the information is correct and the order is up to your liking. The information includes the number of coins you’ll be receiving, how much it’ll cost you, and the exchange rate, which decides the numeral values.
Additionally, you’ll be presented with fees - PayPal’s fee structure is based on the purchase amount. However, while PayPal’s taxation is dynamic, there’s little change in fees if you’re trading in low amounts. The sliding scale system kicks in when purchasing slightly higher amounts.
Once your purchase is confirmed, the assets you acquire will be added to your PayPal wallet alongside your fiat currency. From there, you can use these funds to cover your expenses, as needed.
If you plan to transfer it to an external wallet, you'll have to pay a 1% fee. The use of external wallets might seem a bit excessive, since you already can buy and store crypto on PayPal itself. However, while crypto wallets come in several types, they often stand for anonymity and safety[2].
Just, don't forget the PayPal crypto limitations, such as the $100,000 weekly purchase limit for crypto assets, as well as the limit on the amount of crypto you can send out each week, which is capped at $10,000.
Plus, individual cryptocurrencies have their own minimum sending limits, too. For instance, if you buy Ethereum with PayPal and plan to transfer it to another wallet, you must send at least 0.01 ETH per transaction. Thus, if you have less than 0.009 ETH, you'll need to wait until the amount rounds up.
All in all, crypto purchases on PayPal work much like on crypto exchanges like Binance or Bybit, with its own coin availability and subsequent transaction fees.
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Pros and Cons of Buying Crypto with PayPal
As with many services, PayPal’s crypto venture has its pros and cons. In this part of the tutorial on how to buy ETH with PayPal, I will present a brief overview of some of the more impactful points to consider.
Pros
Let's start with the pros.
Flexibility
Since you can buy Ethereum with PayPal for basically whatever price you want, it has a bit of an upper hand compared to most crypto exchanges. It’s especially relevant among newcomers to the crypto market since they don’t have to spend a lot of money to see how crypto trading works and if it’s suitable for them.
In general, considering why you might be interested to buy Ethereum with PayPal, it’s worth noting many crypto exchange platforms set a minimum amount that you can trade in. This means you will have to match their lowest supported monetary requirement, even if it’s the first time you’re stepping into the crypto space.
This, in turn, can be quite a challenge for newcomers to overcome. PayPal sets the minimum amount too, but it's much smaller. Thus, since the platform is not specifically designed to deal with large volumes of cryptocurrency, it’s great for beginners.
Additionally, you can sell the crypto to have money readily available in your PayPal wallet. Or, you can transfer it to one of the supported wallets (the list of those is not a long one, but reliable brands such as Ledger or MetaMask are on it).
This means your coins have constant flexibility all within one platform, which is beneficial to those who are looking to learn without committing their funds for a prolonged amount of time.
Convenience
As I've mentioned before, PayPal doesn’t divide your fiat and crypto funds. They function side by side, and, with the inclusion of the platform’s own stablecoin, PayPal is uniquely positioned to service a variety of users according to their needs and wants.
In most comparable services, particularly those focused on cryptocurrency, users often find themselves compelled to utilize supplementary systems, services, or third-party applications to transfer their funds between crypto and non-crypto payment platforms.
For a while, PayPal was only one of the aforementioned non-crypto services, acting as a supplementary service to some of the more popular exchanges (it still acts this way). Now, however, users who would otherwise be intimidated by the overwhelming number of features that many crypto exchanges have, are able to take advantage of the smaller-scale trading allowed by PayPal.
This form of convenience is further enhanced by the availability to buy Ethereum with PayPal, among some of the other more notable coins, which means users can be confident that they buy well-renowned assets.
Cons
Now, let's move on to the cons.
Limited Selection
Next to the ease of how to buy Ethereum with PayPal, there’s a downside directly linked to it as well and that’s the lack of options when it comes to cryptocurrency. As you already know, it supports Bitcoin, Litecoin, Bitcoin Cash, Ethereum and PYUSD.
This short list is obviously no match to what the established crypto exchanges like Binance or Bybit can offer, but since it aims towards more controlled, smaller-scale trading, PayPal users will likely benefit from the concise and widely accepted selection.
This is a bit of a double-edged sword: newcomers are not overwhelmed as they get access to the most widely accepted coins, while the veterans will likely be disappointed by the scarcity of trading-related options.
Restricted Access
If you’re thinking of why you should buy Ethereum with PayPal, you should know that when it comes to crypto, global applicability and decentralization are key concepts. However, PayPal is very much centralized, and, unfortunately, its services are limited for various reasons. In this particular case, crypto purchases are limited to personal accounts in the US and its territories (except Hawaii).
This locks the rest of the world out of the service, resulting in a loss of potential audience. Of course, this is not the first time crypto services cannot be reached in certain countries.
However, the regional restriction can also have a bright side since, with country lock, it’s possible to keep the service at a lower scale and ensure it’s working properly in accordance with the regulations, which, in turn, benefits the user.
Alternative Ways to Buy Ethereum
I've covered all there is to know about how to buy Ethereum with PayPal, but now let's talk about an alternative – buying Ethereum on popular crypto exchanges (some even support PayPal as a payment method).
Binance
The first on the list of alternatives to buy Ethereum (PayPal is not supported here, though) is Binance, one of the most well-known names in the industry. To get started here, you first need to create a Binance account. Once you complete the required verifications, you will be able to freely trade in any crypto you want.
Unlike when you buy Ethereum with PayPal, Binance offers a huge variety of payment options. The platform’s specialization to cater to digital asset purchasing shines here, as you can pick the payment method most suited for you without being shoehorned into one or two accepted methods.
Plus, there are various ways you can buy crypto on Binance, including via the quick and easy-to-use "Buy Crypto" option or via various trading options, including spot, futures, or P2P.
P2P works as a supplementary way of acquiring ETH, relying on buying from other people directly, bypassing the middleman entirely. Of course, there are some drawbacks to this method since even if it saves up on fees, the transaction is less supervised by the platform.
The abundance of payment methods naturally makes transactions easier. Plus, there’s a long list of crypto to consider since the specialized crypto platforms often cater to wider needs than services like PayPal can provide.
Besides, where PayPal is quite limited in terms of how to utilize the crypto you buy, there’s an abundance of choices in specialized crypto exchanges like Binance. You can use it with various earning services or to access other exciting Binance features.
However, note that the large number of available assets and the feature selection Binance offers can be a little overwhelming to newcomers.
Coinbase
The question of how to buy Ethereum with PayPal account can be answered in a roundabout way, too. What if I told you it’s not necessary to buy crypto on PayPal and then move it somewhere else? Yes, you can directly buy the assets you want with PayPal on some crypto exchanges without having the additional burden.
One of the platforms that facilitates this is Coinbase. It supports PayPal as a viable payment option. You just need to add it as a payment method and proceed with your purchase. Just note that this feature is only available in select regions (the US included).
Adding PayPal is very easy. Just go to "Settings" on your account, select "Payment Methods," click "Add a Payment Method," and select PayPal. Once you do that, you'll be prompted to sign in to your PayPal account.
Keep in mind that you can only link your PayPal account to one Coinbase account and that your PayPal account's country must match your Coinbase account country. Plus, if your PayPal account email and Coinbase account email don't match, you'll have to complete 2FA on Coinbase.
If you decide to buy Ethereum with PayPal on Coinbase, there are several advantages. Firstly, it provides convenience by allowing users to seamlessly purchase crypto using their PayPal accounts, which many people already have set up for various online transactions.
This streamlines the purchasing process, eliminating the need to set up additional payment methods or transfer funds between different platforms.
Secondly, transactions using PayPal are typically processed instantly, meaning you can quickly access the cryptocurrency you've purchased without waiting for bank transfers or other delays.
Additionally, using PayPal adds an extra layer of security to your transactions. PayPal employs robust security measures, including encryption and fraud detection systems, to help protect users' financial information and prevent unauthorized access to accounts. By leveraging PayPal's security features, Coinbase users can have greater peace of mind when buying and storing cryptocurrency.
Moreover, Coinbase offers a wide range of cryptocurrencies that can be purchased using PayPal, allowing users to diversify their investment portfolios or explore different digital assets without limitations. So, you can buy Ethereum with PayPal on Coinbase, but you can also buy various other currencies.
Lastly, Coinbase is known for its user-friendly interface and intuitive platform, making it easy for both beginners and experienced traders to navigate the buying process.
So, Coinbase offers convenience, instant transactions, enhanced security, a diverse range of cryptocurrencies, and a user-friendly interface, making it an attractive option for individuals looking to buy ETH with PayPal (or other crypto assets).
- Very low trading fees
- Exceptional functionality
- Mobile trading app
- Very competitive trading fees
- An intuitive mobile app
- Up to 100x leverage available
- A very well-known crypto exchange platform
- More than 500 different cryptos available
- Two-factor authentication
- Over 500 different cryptocurrencies available
- Strong security
- Small withdrawal fees
- Secure and reliable
- Low fees
- A good amount of fiat currencies accepted
- Reputable exchange
- Multiple fiat currencies are accepted
- Relatively low trading fees
Kraken
The last alternative I’d like to present while talking about how to buy ETH with PayPal is Kraken. This option is more similar to Binance than Coinbase, mainly because it provides various ways to buy Ethereum (PayPal is not supported as a payment method, though).
After you create your Kraken account and pass KYC, you can quickly and easily buy as little as $10 worth of Ethereum. You just need to add your preferred payment method or fund your account with fiat or crypto. Of course, you can also get Ethereum via spot or futures trading using the Kraken Pro platform.
However, if you prefer to buy Ethereum with PayPal, Kraken is still a great platform that will offer plenty of utility to your newly purchased coins. You’ll just have to move them from the payment platform to your Kraken wallet.
Kraken provides a diverse range of services for Ethereum holders, including spot trading, staking, funding, futures trading, and wallet storage, making it a comprehensive platform for interacting with Ethereum.
Overall, Kraken stands out among exchanges because it boasts a strong reputation for security, with a focus on safeguarding user funds and data. Additionally, its user interface is intuitive, making it accessible for both beginners and experienced traders.
Moreover, Kraken provides advanced trading features such as margin trading and futures contracts, catering to diverse trading strategies. On top of that, the exchange is known for its transparent fee structure and responsive customer support, enhancing the overall user experience.
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Conclusions
All in all, if you want to buy Ethereum with PayPal, you can easily do that on the platform, starting as low as $1. However, if you're interested in other assets, too, there’s only a short list of crypto you can buy on PayPal.
Nevertheless, PayPal has a pretty good relationship with the crypto industry, as it allows the purchasing of crypto, can be used as a payment method on some crypto exchanges (like Coinase) and even has its own stablecoin, PYUSD.
Thus, PayPal offers a great strategy that’s aimed at smaller-scale transactions, which is likely more suited for people who want to try out crypto in a familiar environment. However, while the service covers the basics of crypto trading, users who want to delve deeper, should try out an actual crypto exchange like Binance or Bybit.
The content published on this website is not aimed to give any kind of financial, investment, trading, or any other form of advice. BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor.
Scientific References
1. O.O. Borzenko, A.B. Hlazova: 'Cryptocurrency as a Secondary Form of Manifestation of Finance Virtualization';
2. S. Suratkar, M. Shirole, S. Bhirud: 'Cryptocurrency Wallet: A Review'.
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