Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific
provider, service or offering. It is not a recommendation to trade.
The ways to purchase cryptocurrencies are continuously expanding. PayPal became one of the first global payment providers to offer users the ability to buy, sell and hold digital assets. Through a partnership with Paxos Crypto Brokerage, PayPal users can access the world’s second-largest cryptocurrency – Ether (ETH).
How to buy Ether with PayPal
For all PayPal users, cryptocurrencies can be accessed through either the PayPal website or mobile application. All available assets can be purchased for as little as $1.
How to buy Ether:
Step 1. Head to the cryptocurrency section of your account. Once logged in to your PayPal account, click through to the cryptocurrency section of your dashboard. This can usually be found on the home screen. Alternatively, access it via paypal.com/myaccount/crypto/.
Step 2. Select the cryptocurrency. PayPal currently offers access to Bitcoin, Ether, Bitcoin Cash and Litecoin. Select Ether from the list.
Step 3. Verify account. If this is your first cryptocurrency purchase you may need to verify it through your account.
Step 4. Choose the amount and payment method. Enter the amount of Ether you wish to purchase and select your method of payment. You can typically use bank accounts, debit cards or any outstanding PayPal balance to buy cryptocurrencies.
Step 5. Review and buy. Check over the details of the transaction before hitting Buy Now to confirm.
Once the transaction is complete you should be able to view your cryptocurrency holdings within either the website or PayPal app.
Holdings are within PayPal only
There is currently no option to transfer cryptocurrency funds from a user’s PayPal account. If you want more control over your ETH private keys and flexibility to use ETH on other platforms, another method of purchase may be more suitable.
That being said, in May 2021 PayPal did announce that it would be integrating with third-party cryptocurrency wallets to allow users to transfer Bitcoin from the platform soon. It is not clear whether Ether will also be applicable for transfer.
Pros and cons of buying ETH with PayPal
Pros
Instantaneous transactions. Buying and selling ETH through PayPal can be completed in a few clicks.
Multiple payment options. Cryptocurrencies can be purchased with bank accounts, credit or debit cards and remaining PayPal balances.
Beginner-friendly interface. PayPal’s interface is one of the easiest to use and this translates across to the cryptocurrency platform.
Mobile application. The same features accessed via the website can be accessed on the go via the mobile app.
Portfolio updates. Cryptocurrency portfolios update with current prices allowing users to keep track of performance.
Cons
Private keys. As cryptocurrencies cannot be removed from the platform a user is never truly in control of their private keys and, therefore, cryptocurrency assets.
Fees. PayPal charges higher fees in comparison with some of the dedicated cryptocurrency exchanges.
Range of cryptocurrencies. There are currently only 4 cryptocurrencies listed on the platform.
Exchange markup. Due to the partnership with Paxos Crypto Brokerage which facilitates exchanges, the true exchange rate will never be acquired. A user will purchase slightly higher and sell slightly lower than market rates.
No transfers. Once purchased, ETH cannot be transferred from the platform which means it cannot be securely stored within a personal cryptocurrency wallet or used on other cryptocurrency-related platforms.
PayPal cryptocurrency fees
Transaction fees are applied to your purchase when you buy or sell ETH. Fees are accurate as of 12 August 2021.
Buy or Sell amount
Fee
Fee estimates
$1 – $24.99
$0.50
$0.50
$25 – $100
2.30%
$0.575 – $2.30
$100.01 – $200
2%
$2 – $4
$200.01 – $1,000
1.80%
$3.60 – $18
$1000.01+
1.50%
$15+
Note: Sometimes you can save on fees by buying more cryptocurrency. For instance, you’ll pay less in fees to buy $200 in crypto than you would to buy $199. Consider making one larger purchase to save on fees instead of many smaller purchases, if possible.
How to sell Ether on PayPal
As PayPal does not yet let users transfer cryptocurrency funds out of the platform, a user will need to sell ETH holdings through PayPal.
How to sell Ether:
Step 1. Head to the cryptocurrency section of your account. Once logged in to your PayPal account, click through to the cryptocurrency section of your dashboard. This can usually be found on the home screen. Alternatively, access it via paypal.com/myaccount/crypto/.
Step 2. Select the cryptocurrency. The current options on PayPal include Bitcoin, Ether, Bitcoin Cash and Litecoin. Select Ether.
Step 3. Click sell. If this is your first sale, you may need to confirm some tax information for your account.
Step 4. Choose sale amount. Enter the amount of Ether you wish to sell.
Step 5. Review and sell. Check the details of your transaction and click “Sell Now” to confirm your sale.
Compare other ways to buy and sell Ether
While convenient for PayPal users, PayPal Crypto is not always the cheapest option for purchasing large amounts of Ether. If you are thinking of purchasing large amounts of Ether, remember to compare the fees and exchange rates of alternative platforms.
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Bottom line
PayPal has now entered the realm of cryptocurrency purchases and it is undoubtedly a welcome addition for users of the platform. The company is leading the way for cryptocurrency adoption amongst global payment providers.
While a step in the right direction, the platform has a considerable way to catch up with dedicated cryptocurrency exchanges. Fees are high and the inability to transfer digital assets from the platform will be a turn-off for most.
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James Hendy was a writer for Finder. After developing a keen interest in traditional financial investing, James transitioned across to the cryptocurrency markets in 2018. Writing for cryptocurrency exchanges, he has documented some of the key blockchain technological advancements. James has a Masters of Science from the University of Leeds and when he isn't writing, you will either find him down at the beach, reading (coffee in hand) or at the nearest live music event. See full bio
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