Why is it hard to buy bitcoin with PayPal?

Why is it hard to buy bitcoin with payPal? At date of publication, users cannot buy bitcoins with payPal the conventional way. However in my article, “How to buy bitcoins with credit card” I give you a simple method to actually do this. But first lets look at why buying bicoins with paypal is such an issue. There are a few reasons for this.

Chargebacks on PayPal can happen when the customer in a deal requests their money back because of any number of issues listed in PayPal’s terms of service. There is, however, no way for the seller to force the customer to give them back the bitcoins they sold, so trading bitcoins can be risky for sellers, who have no guaranteed safety net if a chargeback is filed.

The primary one PayPal refuses bitcoin is because it is a cryptocurrency and is traded entirely online—and therefore is in direct economic competition with PayPal.

Both PayPal and bitcoin are moving in to a new method of payment, where money from PayPal and bitcoins can be traded through third-party websites for things like restaurant delivery gift cards. Both PayPal and bitcoin are also on the (slow) way to being accepted at everyday “real life” stores too, to be used for paying for physical goods like groceries.

Any user caught selling or buying bitcoin using money through PayPal or from a PayPal account will have their account banned and their balance frozen.

There is also the possibility of a chargeback from PayPal when you attempt to do business for bitcoins on PayPal—that is, PayPal will automatically send the money back to the purchaser in the transaction, leaving the purchaser to do the honorable thing and return the bitcoins they bought. Obviously and unfortunately, that doesn’t always happen.

There are workarounds that are readily available on several bitcoin user forums and are fairly easy to perform, but be aware that it goes directly against PayPal’s terms of service and that you may lose your account (and ability to sign up for another account, as PayPal requires your name and other personal information).

Consider these other options for selling and buying bitcoins:

In-person trading, where people meet up with wallet codes and transfer between them—you can pay using cash. Online trading directly from wallet to wallet using bank wire transfers. Other methods of compensation (such as bartering) that don’t involve “real” currency.


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