Paxful Review (2021)

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Paxful
  • Ease of Use
  • Beginner Friendly
  • Payment Options
  • Speed
  • Fees
4.2

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 vary depending on the payment method you’re looking to use and are set by the sellers using it (not Paxful itself). As it becomes more popular, I would expect the rates on it to become more competitive.

What is Paxful? How does it work? Is it legit and safe to use?

To clear this up (and more), I’ve put together this in-depth Paxful review. I’ll cover the basics of what Paxful is all about, how it works, supported countries, how competitive its fees are, and more.

Advantages & Disadvantages

Advantages

  • Peer-to-peer (P2P) marketplace.
  • Supports more than 300 payment methods (including in-person cash).
  • Registration takes less than a couple of minutes.
  • Intuitive and easy-to-use interface.

Disadvantages

What Is Paxful?

Paxful describes themselves as “Paypal + Uber and the peoples’ Wall Street”. It allows you to buy and sell Bitcoin (BTC) with a huge number of payment methods in a peer to peer manner.

Paxful is a US-based company which was founded by Ray Youssef and Artur Schaback in 2014. They’re not a small company either – with more than 200 employees spread across their offices in the US, Hong Kong, Estonia, and the Philippines. At the time of writing, they have more than 4.8 million registered users around the world.

They’re quite a US-centric platform, with half of their trading volume coming from the US. But there is trading volume in other countries, too.

It was disappointing to see they had such a poor Trustpilot rating, though.

At the time of writing, it’s 2.6 out of 5 (1800+ reviews). Many of these negative reviews are about being banned or suspended (with no resolution from support). I’ll touch on this more later in this Paxful review.

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
  • Step 3
  • 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 term. This 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.

You won’t have a problem with most people, but it’s good that something like this is built-in.

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
  • Venezuela
  • 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) and Tether (USDT) on its platform.

However, it is possible to:

  • Buy another cryptocurrency with Bitcoin (BTC)
  • Sell another cryptocurrency for Bitcoin (BTC).

If you do this, then that cryptocurrency won’t be protected by their built-in escrow system.

Here’s a screenshot of the cryptocurrencies currently supported as payment methods:

Payment Methods

Paxful supports over 300 payment methods.

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

This includes:

Most other places where you can buy Bitcoin (BTC) will place restrictions on what payment methods you can use. If you want to buy Bitcoin (BTC) with a less common payment method (e.g. Moneygram), then you’ll have better luck on Paxful (or alternatives like LocalBitcoins).

Paxful Fees

Unless you’re trading on a popular cryptocurrency exchange (e.g. Coinbase Pro, Binance, or Kraken), you’re likely going to be quoted prices 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. Alternatively, you can see the real exchange rate in Paxful when you’re searching for offers (which is accurate).

Since first writing this review, Paxful has also improved the interface so that it’s even easier to use and clearer what markup is being charged when you’re selecting a seller. I appreciate their transparency, as this is NOT something that many brokers in the UK highlight to you.

Paxful Interface Showing Bitcoin (BTC) Percentage Markup

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?

Paxful charges sellers from 0.5% to 5% in fees depending on the payment method they want to use.

  • 0.5% for bank transfers.
  • 1% for credit/debit cards, digital currencies, cash, and goods/services.
  • 3% for all gift card types.
  • 5% for iTunes and Google Play gift cards.

For more information, check out this help thread.

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.

On LocalBitcoins (their main alternative), I’ve found that you’ll usually get quoted a lower Bitcoin (BTC) price than using Paxful (between 1% and 1.5%) from popular sellers.

As Paxful gets more UK liquidity, I’d expect these rates to go down and align with what’s available on LocalBitcoins.

Buy Bitcoin with PayPal (on Paxful)

I checked out the best offers on Paxful for PayPal offers too.

I was surprised to find that a number of sellers were selling Bitcoin (BTC) at prices that matched, or were even below, the real BTC to GBP exchange rate. However, these were low reputation sellers.

When I checked Localbitcoins, the cheapest option I found was 15% above the real BTC to GBP exchange rate – which is quite a lot more expensive! This will obviously vary day-to-day, though.

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).

Here’s a snapshot of the difference in fees for Paxful vs LocalBitcoins for a few other options:

Payment MethodFees: PaxfulFees: Localbitcoins
Steam Gift Card21%Not Available
Skrill13.3%Not Available
Neteller11%34.7%
Western Union4.5%Not Available
MoneyGram3.7%21.7%

Is Paxful Legit? Is Paxful Safe?

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

Here are some tips:

  • Buy Bitcoin (BTC) from sellers that have a 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 if they don’t release it.
  • 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.

Unfortunately, the Trustpilot rating of Paxful is quite negative.

It didn’t use to be this way, but it looks like they’ve received a number of complaints about accounts being banned or suspended. Paxful will suspend or ban accounts if users breach their terms and conditions (e.g. scamming others or facilitating illegal activity).

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 I picked out:

  • Paxful hasn’t been around as long (established 2014).
  • Paxful has lower trading volume in the UK.
  • Prices on Localbitcoins seem much more competitive (especially for popular payment methods).
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).

Want to check it out? Click the link below to get started.

Paxful Website

Any Questions?

I hope you found this Paxful review useful. Thanks for reading!

Have a question about Paxful?

Let me know in the comments section below and I’ll get back to you ASAP.

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2 thoughts on “Paxful Review (2021)”

    • Staunch, thanks for commenting!

      I agree. You can definitely buy bitcoin cheaper with GBP at other places. UK bank transfer mark-up is still somewhere around 3% when I just checked.

      The one thing it does have going for it is that it supports face-to-face transactions – which Localbitcoins looks like they’ve now removed the functionality from!

      Reply

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