Paxful Review (2020)

Paxful
  • 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.

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.

More precisely, here’s what we’re going to cover in this Paxful review (click any section to jump to it).

Advantages & Disadvantages

Advantages

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

Disadvantages

  • Cheaper P2P alternatives are available.
  • Less trading volume than other P2P alternatives.
  • Only supports Bitcoin (BTC).

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. It’s quite unlike Solidi, Bittylicious, or brokers like that.

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. They have more than 2 million registered users across the world.

It was disappointing to see they had such a poor Trustpilot rating. At the time of writing, it’s 2.5 out of 5 (with more than 850 reviews). From the most recent ones, a lot of the negative reviews are about being banned or suspended (with no resolution from support). I’ll touch on this more later in this Paxful review.

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.

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
  • 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.

However, it is possible to buy another cryptocurrency with Bitcoin (BTC) or sell your altcoins for Bitcoin (BTC). If you do this, then that cryptocurrency won’t be protected by their built-in escrow system.

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))

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 than elsewhere.

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 some alternatives.

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

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. 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 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 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 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).

Paxful Trustpilot Reviews (Bad Rating)

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 between the two:

  • Paxful hasn’t been around as long (est. 2014).
  • Paxful has lower trading volume in the UK.
  • Prices on Localbitcoins are much 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. Since writing this review, they’ve 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.

Paxful Interface Showing Bitcoin (BTC) Percentage Markup

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).

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

Get Started with Paxful

Any Questions?

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 (2020)”

    • 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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