Product Rating Summary For Paxful
Founded in 2015 with offices in multiple cities around the world headquartered in the USA and over 200 employees, Paxful is stated to be the “Uber” of the Bitcoin. Paxful empowers individuals to become merchants and sell Bitcoin in a P2P system, similar to how eBay allows people to sell merchandise in a free market.
Paxful offers a great alternative for buyers, since sometimes traditional exchanges just don't seem to have fair transactional pricing. While most exchanges suffer from geographic restrictions or limited payment methods, Paxful is has the strength of both, giving the power for trading Bitcoins back to the people and creating a more decentralized trading market.
Paxful also offers a payment processing service for websites, which enables merchants to more easily accept a wide variety of payment methods.
For these reasons listed above, we had to include Paxful on our list. If Paxful had the same track record and history of our higher ranking brokerages, it would be our top recommendation.
Pros and Cons of Paxful
Opening An Account
To open a live account, clients need to meet non negotiable registration requirements, including ID verification for specific countries.
They offer verification levels to suit investor type. This is a good signal that there has been some effort to reduce costs on behalf of the investor, regardless of the capital being used.
Requirement limits by verification level:
- Level 1– Email and phone verification. $1,000 per trade and lifetime limit
- Level 2 – ID. $10,000 per trade and lifetime limit
- Level 3 – Address. $50,000 per trade. Unlimited lifetime limit
- Level 4 – Enhanced due diligence. $50,000+ per trade. Unlimited lifetime limit
Paxful offers a Bitcoin wallet app available to download to iOS and Android (APK) devices. The application provides safe and secure sign-in access to the cryptocurrency marketplace. Other features include:
- Real-time balance
- Personalization of your profile
- Status of recent transactions
- Access updated crypto to fiat conversion rates
- Send, receive and store crypto coins in your mobile wallet, 24/7 regardless of location.
Deposits & Withdrawals
Payment methods include:
- Bank transfer – Domestic and international
- Digital currencies – Including Litecoin and Dogecoin
- Goods & services – Including gold, cars and game items
- Gift cards – Including Amazon, Google Play, and Xbox gift cards
- Debit/credit card – Including Greendot, American Express, and VISA
- Online wallets – Buy Bitcoin with PayPal, Zelle, Google Pay, MPesa, and mobile recharge
To start buying and trading Bitcoin:
- Sign up for a Paxful account - login and verify
- Select the buy logo
- Click show all payment methods and select a deposit method that suites you
- Click any currency and select your currency from the list
- Enter the amount you want to buy and trade - be sure to check out some charts
- Select your country from the location list
- Click search for offers and select as desired
- Confirm the transaction
Paxful wallets are advertised as free of charge, however, withdrawal fees are incurred. Users can remove Bitcoins from internal and external cryptocurrency wallets.
Rates & Margin
Paxful offers a market price for Bitcoin taking an average rate from Coinbase, Bitstamp, and Bitfinex, though vendors can list an exchange price that they themselves are able to set. View the amount you can get for US Dollars under the rate section of the buyers page.
Margin is set by the vendors. This can range from 3% to 55%. Traders can and should review the terms and conditions set by the vendor before accepting an offer or find an alternative that meets pricing expectations.
Customer support is limited to some of the less desired forms of contact.
An online contact form and a live chat bot are available via the logo in the bottom of the website, or on the mobile app. A support email address is not in use and a contact phone number is not provided. The exchange’s office mailing address is 3422 Old Capitol Trail PMB# 989, Wilmington DE, 19808, USA.
Paxful also offers an extensive Frequently asked questions page and help center (knowledge base). Most queries are easily found.
Note* - During testing we found that the verification process can be difficult to navigate even when consulting the knowledge base. We found it best to use the live chatbot as they do have a good turnkey solution.
This is very important and should not be taken lightly. While Paxful is free of cyber hacking. There are added risks in P2P lending and trading. There is often no market price. Each trade comes with additional terms and conditions. This means that the added security risk is placed on the investors ability to perform and understand their research.
Peer-to-peer transactions may lead to an unfair trading environment. Some online concerns query whether Paxful is legitimate or a scam site. Our recommendation to ensure legitimate trading is to keep transactions within the Paxful marketplace to maintain dispute and escrow protection. This will help reduce the risk of scams.
Cryptocurrency conversions are subject to a 0.5% fee. Paxful does not charge to buy cryptocurrency, however, an exchange fee is set by other customers and account owners offering Bitcoin purchases. Transfer fees will often apply to sell crypto coins, varying by each selected payment method. Bank transfers use the lowest charge at 0.5%. Alternative methods including debit cards, digital currencies, and online wallets which carry a 1% fee.
The gift card rate incurs the highest rate for selling crypto at 5%. (We consider this an absolute fail)
They have escrow network fees that we highly suggest reading and understanding before purchase.
Paxful is a unique peer-to-peer crypto marketplace and wallet service that is gaining traction as a popular investment arbitrage strategy. Our review was happy in finding the exchange supports 350+ payment methods, secure logins, and crypto vendor opportunities.
The limited customer support and unregulated services may be a concern for some investors. Investors should consider high vendor fees and the narrow range of digital currencies they are targeting for investing.
Using the service we were able to generate above average returns. It did require a good amount of effort. Be warned that if you are strapped for time, Paxful is not likely for you.
We recommend Paxful for investors seeking to refine and optimize their respective coin positions. Moreover, the fees and accessibility are top notch contenders in an overall competitive space.