The team behind Paxful aim to provide a simple, fair and secure platform that allows individuals to trade value. The site acts as a global peer to peer payment logistics platform and facilitates Bitcoin trades in the same way that Ebay facilitates the trading of everyday goods.
Paxful is based in the USA, and was established in 2015 by a group of developers who sought to create a peer-to-peer marketplace that allowed buyers and sellers to interact after posting trade offers. The site operates as a mediator between interested parties and provides a space for its users to interact.
Paxful is a popular option for trading Bitcoin as the site is user friendly and offers the most diverse range of payment methods available online. Payment options include bank transfer, credit or debit card, PayPal, MoneyGram, and Skrill. In addition to these methods, users can also choose to make purchases by using any of a huge number of gift cards such as Amazon and iTunes. These options make Paxful a handy location for buying and selling Bitcoin.
How it Works
To get started using Paxful, users can head to the site and simply choose an amount of Bitcoin you’d like to purchase and your local currency, the amount in Bitcoin you will get is then displayed.
After creating an account users can search for available Bitcoin sellers. Common search categories include type of currency and method of payment.
From here, users can view all the open orders, a number of sellers will be available and the most suitable vendor can be found by looking at accepted payment methods, minimum and maximum order amounts, as well as price. Users can also check a seller’s feedback rating and account history in order to determine their suitability.
When a suitable vendor has been found it’s possible to begin a trade by clicking on the “Buy” button. It’s then necessary to choose the amount you would like to buy and make your purchase. This will open up an escrow service and chat option that allows you to communicate directly with the seller and discuss the trade in more detail.
Once the trade has been finalized and payment has been concluded, you can click “Mark as Paid” and wait for the transfer of Bitcoin to your Paxful wallet. When this is completed, you can use your Bitcoin in any way you want.
Visitors to the site who haven’t already created an account will be presented with another way to make purchases. After choosing the currency and amount they would like to buy, visitors can follow the steps outlined in order to complete their purchase.
Purchasing Bitcoin via Paxful is quite a straightforward experience and the site offers users a wide variety of ways to pay, on top of this, the site doesn’t take any fees directly from the buyer when they are purchasing Bitcoin. However, the buyer will be charged a fee chosen by the seller; and this fee can vary greatly depending upon the payment method used. Paying by gift card often results in the highest fees.
Sellers on the site are charged a 1% fee, there is also a small ‘mining fee’ paid by the seller when Bitcoin is sent from one address to another. Similar to Localbitcoins, Paxful operates as a peer-to-peer marketplace and utilizes a number of key features in order to try and guarantee a high level of usability.
Paxful allows buyers and sellers to transact via an extremely wide range of payment methods. These include:
- Cash Deposits
- Credit and Debit Cards
- Gift Cards
- National Bank Transfer
- Western Union
The site also incorporates a number of features designed to help secure trading:
- Safety of Funds – Paxful creates a wallet that will automatically store your funds when you register for an account. This wallet acts as an efficient way to store and transfer funds on the site. Paxful’s servers are also maintained in accordance with the highest banking specifications.
- 2 Factor Authentication– Wallets require complex passwords and two-factor authentication to guarantee security. Enabling 2FA helps keep your wallet protected, and provides an extra layer of protection against hackers.
- An Escrow Service–When trading on the site, funds are held in escrow until both parties confirm all parts of the transaction. This acts as a way to protect traders and allow for smoother transactions.
- Reputation Ratings– Traders are given a ranking based on their activity, in addition their trading history and feedback ratings are open for all to view.
- Customer Support – Paxful operates a comprehensive support system and the support team are generally quick to respond. Users can contact the support team via a range of options such as direct message, email, phone, and social media.
Due to its low commission fee charges Paxful should be a low cost option. However, similar to Localbitcoins, sellers on the site generally charge more for Bitcoin than the more well-known centralized exchanges. On peer-to-peer marketplaces, vendors often choose to generate profit by slightly increasing their selling prices. Vendors run the risk of selling Bitcoin to individuals that may try to initiate a chargeback (via Credit/Debit Card or PayPal), and as a result prices are higher across the platform in order to mitigate this risk.
Things to Consider
Paxful operates as a decentralized exchange and it’s necessary for users to incorporate certain safety measures when on the site in order to ensure pain free trading. The site has developed a good reputation as being a trustworthy place to buy and sell Bitcoin; however, the wide variety of payment options available on Paxful also attract a good number of scammers who aim to defraud honest traders. As a result it’s best to:
- Check the seller’s profile and verify that they are suitable for dealing with. When possible look for vendors with an established account and a high positive feedback rating. Accounts should be over a year old, with a rating of at least 98%.
- Contact the seller and request an exchange through the platform. Do not set up external trades with vendors as this negates the escrow service and opens up the possibility of scams taking place. It’s also best to stick to communicating through the Paxful message box and avoid sending messages via email, mobile, or SMS.
- Explain your requirements as much as possible and highlight any issues you may have. Prices will generally depend on the payment method you choose and can vary greatly so be sure to confirm a suitable price.
- Choose a payment method that offers you a good level of protection. Gift cards paid for with cash are preferred by scammers as they are impossible to track. If you run into any issues after using a credit or debit card, PayPal, or a bank transfer you will have an added layer of security.
- Contact customer support and make use of the forum if you are experiencing any issues, or have any doubts regarding sellers. Whilst the entire process is quite straightforward, it’s always possible for users to run into problems. Make use of the resources available.
Paxful is one of the easiest ways to obtain Bitcoin and the site makes buying and selling Bitcoin accessible to anyone with a computer. There are no buying or selling limits and users can decide on the amount of identification verification they will use during trades. In addition to this Paxful allows users to make purchases via the widest range of payment options currently available.
Much of the site’s attractiveness is due to the fact that it allows for a great amount of payment flexibility. However, when using the site, it’s important to remember that there are untrustworthy buyers and sellers on the site whose main aim is to scam legitimate traders. This is the main downside to using the site and the team behind Paxful provide extensive customer support, in addition to a forum and resource section that aim to keep users updated regarding everything happening on the site.
For individuals looking to trade Bitcoin while using services such as PayPal, MoneyGram, and Skrill, Paxful is the best option. Also, in order to benefit from greater flexibility with payment methods, users should be prepared to pay above market prices, as vendors choose to charge more for Bitcoin compared to the mainstream exchanges.
Paxful is a popular way for individuals to trade Bitcoin and remains a viable option for many in the Bitcoin community. The site provides buying opportunities for individuals who may normally be unable to purchase Bitcoin. As a result, it is a good choice for both new and more experienced traders. However, Paxful users should make sure to use all the resources necessary to verify sellers and transact in ways that keep them protected at all times.