- In November 2020, PayPal added cryptocurrency buying and selling features.
- You can buy Ethereum, Bitcoin, Bitcoin Cash and Litecoin on PayPal.
- You can spend your crypto at PayPal merchants, but can't transfer it out of PayPal's digital wallet.
In November 2020, PayPal introduced crypto buying and selling features, enabling its 346 million users worldwide (starting with those in the US) to buy and hold Ethereum, Bitcoin, Bitcoin Cash, and Litecoin using its platform.
PayPal users in the US can also use cryptocurrencies to buy from the platform’s 26 million merchants around the world, with their crypto being converted into fiat currency at the point of sale. The features will be rolled out to users around the world from early 2021.
The good news is, buying Ethereum on PayPal is a simple process. Here’s how it works.
How to buy Ethereum with PayPal
To begin with, you’ll need a PayPal account, which you can set up using your credit card or bank account, along with an email address, at PayPal.com.
You’re now ready to buy some ETH (whether you use the PayPal.com website, or the app, the experience is pretty much the same; we’re using the website for this step-by-step guide). From the PayPal website’s home screen, or the app’s Payments screen, select the “Buy Bitcoin and more” banner at the top of the page.
Next, choose which cryptocurrency you want to purchase; the options currently include Ethereum, Bitcoin, Bitcoin Cash and Litecoin.
PayPal offers the option of buying a preset amount of Ethereum; alternatively you can tap “Buy” to select a specific amount. The minimum purchase is as little as $1.00 of Ethereum. Below the buy button, PayPal also helpfully includes a brief description of the asset you’re buying, so you know exactly what you’re getting into.
To continue, you’ll need to confirm some information and agree to PayPal’s Cryptocurrencies Terms and Conditions, which include the usual disclaimers warning of cryptocurrency’s volatility and irreversible nature.
Now you can actually buy Ethereum, by entering the amount of your choice; PayPal flags up that Ethereum’s price varies depending on when you purchase, noting that: “Exchange rate includes a spread and refreshes frequently until you buy or sell.” Hit Next to move on to the next stage of the process.
At this point, you’ll have the option of using the bank account or debit card that’s already associated with your PayPal account, or adding a new one.
You can review your purchase after selecting “Next.” PayPal’s transaction fees are typical of consumer-facing exchanges, ranging from 50 cents for purchases under $25, to 1.5% of the transaction, for purchases over $1,000. Once you’re ready to purchase, select “Buy Now.”
After the purchase is complete, your PayPal account will be updated to reflect the amount of crypto you’ve bought, and its current value.
Back on the home page, you should see your Ethereum purchase under “Your crypto”, with the option to buy and sell.
Any cryptocurrency sold through the PayPal app or website is converted into fiat, and will show in the Cash Account balance section of the user’s account. PayPal has also included a fee chart and conversion spread, so that users can work out what fees they could incur when selling.
Buying Ethereum on other sites using PayPal
For the time being, any crypto you buy through PayPal is stuck on PayPal; you can’t transfer crypto out of PayPal’s digital wallet, and when it’s used for purchases from merchants, it’s converted into fiat at the point of sale. That may change in future, but for the time being it’s proved to be a point of contention for crypto advocates, who argue that it goes against the oft-espoused idea that “you are your own bank” when using crypto.
If you’re looking to buy Ethereum from cryptocurrency exchanges using PayPal, your options are limited. Most exchanges don’t support PayPal as a payment method, largely because crypto transactions can’t be reversed. That means that a crypto buyer could falsely dispute a transaction, get their money back and still receive the crypto that they’d bought, leaving the seller out of pocket with no recourse.
Crypto exchange eToro will let you deposit funds from PayPal, before using them to buy the cryptocurrency of your choice (in this case, Ethereum).
Buying Ethereum on eToro using PayPal is a simple process: log into your account, click “Deposit Funds” and select “PayPal” as your preferred payment method, then choose how much you’d like to deposit. Once the funds have arrived in your eToro wallet you’re free to buy Ethereum.