Paxful Review (2019)

Paxful Review (2019)
  • Ease of Use
  • Beginner Friendly
  • Payment Options
  • Speed
  • Fees
4.1

Summary

Paxful allows you to buy Bitcoin (BTC) with a crazy amount of payment options in the UK (>300). Registration takes a few minutes and the interface is intuitive and easy to use too.

Bitcoin rates start at 3% above the real BTC to GBP market rate. As Paxful expands into the UK and Europe, I’d expect the rates to become more competitive.

Who are Paxful? Is their platform safe to use?

To clear this up (and more), I’ve put together this Paxful review. This review is aimed at people in the United Kingdom (UK), but you’ll still find value in it if you’re living in a different country.

Pros & Cons

Pros

  • Peer-to-peer (P2P) marketplace
  • Supports loads of payment methods (>300)
  • 4/5 Trustpilot rating
  • Registration takes less than a couple of minutes
  • Intuitive and easy-to-use interface

Cons

  • Cheaper P2P alternatives available
  • Less trading value than other P2P alternatives
  • Only supports Bitcoin (BTC)

Who Are Paxful?

Paxful is a US-based company which was founded by Ray Youssef and Artur Schaback in 2014. They have more than 2 million registered users across the world. They currently have a 4* Trustpilot rating with 401 reviews.

They have more than 100 employees across the world, with offices in the US, Hong Kong, Estonia, and the Philippines. They’re quite a US-centric platform – with half of their trading volume coming from the US. However, there is trading volume in other countries – including the UK.

Paxful is: “dedicated to unlocking the power of people by building a global peer to peer payment logistics platform of the future” and describe themselves as: “PayPal + Uber and the peoples’ Wall Street”.

How Does Paxful Work?

Paxful is a P2P marketplace where you can directly buy and sell Bitcoin (BTC) with anyone.

Paxful - Create an Account

To get started, you’ll need to create an account. No ID verification is required at this stage, so this takes less than a couple of minutes. Once you’ve created your account, it’s quick and easy to find someone to buy from.

  • Step 1
  • Step 2
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  • Step 4
  • Step 5

Click on any image to expand it.

  • On the Paxful homepage:
    • Choose your preferred payment method
    • Enter how much (in GBP) you’d like to purchase
    • Select ‘Buy Bitcoin Now’

  • It’ll show you the best options (cheapest first) which match your criteria
  • Find the seller which you prefer and select the ‘Buy’ Button

  • You’ll be taken to the seller’s offer page. This page will:
    • Ask you to confirm how much you want to buy in GBP (and how much BTC you’ll get)
    • Show you the offer terms (which tells you who they are, what they need from you, and what to expect)
    • If you’re happy with the purchase amount, initiate the trade by selecting ‘Buy Now’

  • You’ll be taken to another page, where you’ll be given payment details and can chat (in real-time) with the seller.
  • Once you’ve paid, go back to Paxful and mark the payment as completed.

  • You’ll now need to wait for them to confirm that the payment has been received. Once it has, it’ll be released from escrow into your Paxful Bitcoin (BTC) wallet.
  • You can then withdraw your bitcoin (BTC) from Paxful for a fixed fee of 0.0005 BTC

What is escrow?

Paxful provides an escrow service for all trades that take place on their platform. This is a compulsory component of the trade, which holds the seller’s Bitcoin (BTC) until both parties have confirmed that the payment has been made. If both parties agree that the payment has been made, then the buyer will automatically receive the escrowed Bitcoin (BTC).

If the buyer doesn’t pay within the defined time period, then the trade is cancelled and the escrowed Bitcoin (BTC) is returned to the seller.

If either party does not agree that the payment has been made, then the escrowed Bitcoin (BTC) will not be released. It’ll be escalated to a dispute which will then be investigated by Paxful. They’ll consider the case put forward by both parties and release the escrowed funds to the person they believe they belong to.

Supported Countries

Paxful is available in nearly every country around the world (incl. the US, Canada, UK, and Europe). 

Banned Countries

As a US organization, Paxful needs to comply with the Office of Foreign Assets Control (OFAC) sanctions. This means that users in the following countries cannot use Paxful.

  • Burundi
  • Central African Republic Sanctions
  • Cuba
  • Crimea region
  • Iran
  • Iraq
  • Lebanon
  • Libya
  • North Korea
  • Somalia
  • South Sudan-related Sanctions
  • Sudan and Darfur
  • Syria
  • Yemen

For an updated list (and more information), check out this help article on their website.

Supported Cryptocurrencies

Paxful only supports the buying and selling of Bitcoin (BTC) on its platform.

Payment Methods

Paxful supports over 300 payment methods.

That’s a crazy amount of ways to buy Bitcoin (BTC).

This includes:

  • UK Bank Transfer
  • PayPal
  • Gift Cards (Various Types)
  • Moneygram
  • Western Union
  • Altcoins (e.g., Ethereum (ETH), Ripple (XRP), and Monero (XMR))

Paxful Fees

Unless you’re trading on an exchange (e.g., Coinbase Pro, Bitstamp, or Kraken), you’re going to pay fees which are above the real BTC to GBP exchange rate (i.e., the mid-market rate).

You can check the real market price of bitcoin (BTC) in GBP with something like this. But kudos to Paxful, they actually show the current market price above the open offers (which is accurate).

Paxful doesn’t set the rates offered on its platform. The individual sellers can choose how much they’d like to sell their Bitcoin (BTC) for, and it will vary on a day-to-day basis.

What fees do you pay if you’re looking to sell Bitcoin (BTC) on Paxful?

For the majority of payment methods, sellers on Paxful are charged a 1% fee.

The only exception is iTunes and Google Play gift cards, where sellers are charged a 5% fee.

You can find more information here.

Are there any buying limits on Paxful?

Buying limits are independently set by each seller. When you’re browsing offers, you’ll see them displayed in the highlighted column. There isn’t an upper threshold that I’m aware of.

Buy Bitcoin with UK Bank Transfer (on Paxful)

When I checked, the cheapest payment method available was a UK bank transfer. The best offer using this payment method was about 2.9% above the real BTC to GBP exchange rate.

Here’s how that stacks up against similar alternatives.

PlatformPayment MethodFeesWebsite
PaxfulUK Bank Transfer2.9%Official Website
LocalbitcoinsUK Bank Transfer0.8%Official Website
DigaxUK Bank Transfer1.7%Official Website

As Paxful gets more UK liquidity, I’d expect these rates to go down.

Buy Bitcoin with PayPal (on Paxful)

I checked out the best offers on Paxful for PayPal offers too. The cheapest option I found was 25% above the real BTC to GBP exchange rate. Ouch! That’s quite a mark-up.

When I checked Localbitcoins, the cheapest option I found was 10% above the real BTC to GBP exchange rate. That’s quite a lot cheaper!

Other Payment Methods

In general, reversible payment methods have higher fees than non-reversible payment methods (as it exposes the seller to a higher risk of fraud).

Payment MethodFees: PaxfulFees: Localbitcoins
Western Union12.5%-
Skrill11.5%3.1%
Cash Deposit20.4%5.1%
Neteller25.4%10.3%
MoneyGram18.5%14.2%
Steam Gift Card67.7%72.6%

Is Paxful Safe?

Like on Localbitcoins and other P2P Bitcoin (BTC) marketplaces, there’s a good chance that will take advantage of you if you’re not careful.

Here are some tips:

  • Buy Bitcoin (BTC) from sellers that have lots of positive reputation on the platform.
  • Keep all your communications within Paxful’s system, so there’s clear documentation if you need to open a dispute.
  • Don’t cancel the trade after you’ve made the payment, as this will refund the Bitcoin (BTC) that the seller is forced to escrow back to them. Mark it as paid and then open a dispute for Paxful to resolve.
  • Don’t be tempted to trade outside of Paxful’s escrow system for lower rates. If you do so, there’s no guarantee they’ll actually send the Bitcoin (BTC) once you’ve paid.

The majority of reviews on Trustpilot are positive. There are some negative reviews which complain about accounts being banned/frozen. Paxful will suspend/ban accounts if users breach their terms and conditions (e.g., scamming others or facilitating illegal activity).

Trustpilot Overview for Paxful

Trustpilot Overview for Paxful

Alternatives: Paxful vs Localbitcoins

Paxful’s closest competitor is Localbitcoins.

Localbitcoins homepage header

Localbitcoins is another Bitcoin (BTC) P2P marketplace which was founded in 2012. It’s popular around the world and supports loads of different payment methods – just like Paxful.

On the surface, I don’t think there’s much difference between them.

There are the main differences:

  • Paxful hasn’t been around as long (est. 2014).
  • Paxful has lower trading volume in the UK.
  • Prices on Localbitcoins are more competitive.

Localbitcoins WebsiteUK (Low Fee) Alternatives

Summary

Paxful Logo Header

You can buy Bitcoin (BTC) with an insane number of payment methods on Paxful.

If that’s important to you, then it’s definitely a marketplace you should check out.

But if you’re looking to buy Bitcoin (BTC) with a UK bank transfer, there are alternatives in the UK where you can find better rates (check out this thread for an overview).

Get Started with Paxful

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