For decades, Paypal has been serving as a means of mobile payments businesses. If you have an account in it, with a secure internet connection, you can make the payments for the items you have purchased. Thus, Paypal offers a reliable online financial service. As long as there are no conversions involved, money can be transferred to family and friends free of other costs. However, the question here is whether it is as easy to buy bitcoins using Paypal.
Indeed, it is not an easy task to purchase Bitcoins using Paypal. Why is it so? The answer to this question and the supporting arguments are detailed in this blog. If ever you intend to buy Bitcoins with Paypal, read on the following excerpts to get a hint on how difficult it is and what is the cause.
Understanding Bitcoin and Paypal
Before moving on to why it is challenging to purchase bitcoin with Paypal, it is necessary to understand what a bitcoin and Paypal is and the purposes served. One must carefully understand that Bitcoin is just like cash. Once you lose it, then it indeed is a loss.
On the other hand, Paypal is similar to a credit card. It is compared similarly to a credit card in the sense that it deals with customer complaints and frauds.
What poses the difficulty?
The implications that follow on purchasing Bitcoins with Paypal can be illustrated with the instance mentioned below. Read on.
Consider the instance when person A buys BTC from person B through their PayPal account. For this, both have to arrive at an amount that they agree(e.g., $2000). Imagine that person A pays the amount, and person B sells the BTC.
After one day, if the person A contact PayPal and raised the complaint saying that he/she did not receive the BTC despite paying the full amount, there is where the problem lies. There is no provision available where the Paypal can check the same and settle the dispute.
The reason is that there is no means to trace BTC, unlike cash, which can be located. In such critical circumstances, credit companies tend to support the complaining party. Hence, in the instance illustrated above, it is likely that person A gets both the BTC and the amount he /she paid for it.
It indicates a win-win situation for the complaining party leaving the other party at a complete loss. This is why involvement in such transactions can prove risky at times.
Accounting to such loopholes that persists these days not may exchange agree to buy BTC via Paypal.
Another reason why purchasing BTC via Paypal can prove risky at times is that the latter is an e-currency. Therefore, Paypal does not support buying other e-currencies. Many Paypal accounts have been closed due to several issues that came up with the transactions involving BTC selling and buying.
Impacts on buyer and seller
From the instance detailed above, it is evident that the big loss if any discrepancies exist will be for the seller. In most cases, the buyers are protected and are destined to get better profit. So, be cautious if you are selling the BTC. However, if you are buying them, you will not have big headaches later.
How to tackle the issue?
Indeed, high risk is accompanied by selling BTC via Paypal. So, before actually getting involved in the transaction, make sure that you take the necessary precautions. One way of tackling the issue is by purchasing the bitcoins from a person you trust over the counter (OTC) sites.
It is not an easy task to buy and sell BTC via Paypal. The associated risks and some means to tackle it are detailed in this article.