In this post, I did a complete review of Paxful and compared it with its top rivals. After going through all other reviews online, I am proud to say that this is the most complete Paxful review.
Paxful is considered the ‘Uber of Bitcoin’ due to the ease it brings to the purchase and sales of BTC. It is similar to Remitano but supports a lot more payment methods than its close Rivals (LocalBitcoins, Coincola).
Most Nigerian’s that use this platform, are those selling gift cards (Amazon, iTunes, etc) for bitcoins.
I have compared Paxful with Remitano and LocalBitcoins, However, in this post, I am giving you a complete paxful review with an added bonus of how to trade on the platform.
Let’s get started.
In the next section, I will show you how I will walk you through this post
Post Review Brief
Although this exchange provides some level of safety using the escrow. Users have to stay safe while trading by avoiding fraud due to human error.
To smoothly walk you through this post, here is what I will be covering
- Paxful Overview
- Paxful Services
- Supported Currencies and Payment Methods
- Paxful Transaction Fees
- Transaction Limits
- Supported Countries
- Customer Support and Public Opinions
- Paxful Vs Localbitcoins
- Paxful Vs Remitano
- Paxful Vs Coincola
- How to Trade Safely on Paxful
- Demonstration Video
- Conclusion – what’s my take?
Now that you know what I will cover in the post, let’s get to it. You can click on any of the titles above to take you straight to the section.
1. Paxful Overview
Ray Youssef and Artur Schaback founded the company in 2015. It has offices in various cities with its Head office in 3422 old Capitol Trail, Wilmington, Delaware in the United States of America.
Paxful is a P2P market place that supports over 300 payment methods. In other words, it supports any payment method that you can think of.
With this feature, a user will not only trade with other users from their country but with users from any country that accepts his payment method.
The 3 minutes video below shows a summary of how paxful works, you can watch it or skip to the rest of the article.
2. Paxful Services
Paxful provides users with the following services.
- Wallet: Here you can Receive, Store and send/spend bitcoins
- P2P market place: This is where buyer and seller meet to trade bitcoin using over 300 payment methods. I will discuss this in more details.
- Vendor Service: once you create an offer in the market place to either buy or sell, you have become a vendor
- Kiosk Service: This is more like an affiliate program for web developers. A web developer can insert a code on his site that mirrors the Paxful market place. Clients can buy bitcoin on Paxful directly from the web developers’ site. The web developer earns 2% on every completed transaction.
- Affiliate Program: Through this paxful reward its users with 50% of the revenue its generate from any client a user recommends to paxful.
Paxful uses an escrow system to modulate transaction on its platform. To buy or sell bitcoin on Paxful, you need to understand what an escrow is. What is an escrow?
What is an Escrow and How does it Work?
Escrow is a way to ensure that the conditions between two parties involved in a transaction are met before the required fund/asset is released to the beneficiary. Here is how it works on paxful;
Damilola wants to buy Bitcoin, she goes to the paxful market place and decided to buy from Jay whose terms she agrees with. she enters the amount of bitcoin she wants to buy and initiates the trade.
The amount of bitcoin she wants to buy will be taken from Jay’s paxful bitcoin wallet and be held in the escrow. In the escrow, the bitcoin is not accessible to Jay or Damilola.
Damilola’s time countdown to pay will start; say 30 minutes. In this time, she is expected to pay Jay using the agreed payment method and indicate that she has paid.
If she does not pay within this period, the trade will be cancelled and the bitcoin release to Jay. If she pays and indicates that she has paid, Jay will confirm receipt of the payment and the bitcoin will be released to her.
If any of the party falters, the transaction will enter Dispute where the paxful team will look at the presented evidence and release the bitcoin to who is right.
Note that even though this system is safe, there are cases where traders have been defrauded because they made a mistake. I will discuss how to trade safely to avoid these errors later in this post.
Now that we know what an escrow is and how it works, let’s jump into How to buy purchase bitcoins on paxful.
How to buy Bitcoin on the Paxful P2P market Place
Buying Bitcoins with Paxful is relatively easy, all you need to do is:
- Choose the number of Bitcoins you want to buy
- Choose the currency you want the exchange rate to be in
- Select a payment method (Paxful accepts multiple payment methods)
A list of sellers will be displayed, you can either search through the list to pick a seller or request for the list of recommended sellers based on their past transaction records.
Upon choosing a seller and clicking on the trade button you will be redirected to the trade page where you can communicate directly with the seller through live chat, once you are satisfied with the sellers terms you can then proceed with making payments, after successfully sending payment to the seller/vendor, click “mark as paid” and wait for your Bitcoins to be deposited into your Paxful wallet.
The time it will take your Bitcoin to reflect in your wallet is subject to certain factors, the factors include your payment method and an active seller, online payment methods such as Paypal, gift cards, card transfer etc. are instant while others such as western union transfer, MoneyGram, and cash deposit might take longer pending on the time it takes your bank to process your cash transaction.
Here is how Paxful handles a transaction. When a buyer and seller reach an agreement and decide to trade, the required bitcoin in the sellers paxful wallet will be automatically moved to the paxful escrow wallet. This is to ensure that the buyer doesn’t make payment only to find out that the seller already cancelled the transaction.
Furthermore, the buyer is free to cancel a transaction at any time. Whenever a buyer does cancel a transaction; the Bitcoin will be transferred from Paxful’s escrow back to the seller’s wallet. Paxful has a payment timeframe, if a buyer fails to make payment within that timeframe and doesn’t hit the “mark as paid” button, the transaction will be cancelled and the sellers’ Bitcoin transferred back to his/her wallet.
The plus side of this platform is, you can buy Bitcoins with any currency of your choice and with several payment methods which include gift cards, bank transfer, credit/debit cards, cash deposit, hand to hand payment (if you reside close to a vendor) etc…
Although you can buy with any currency only Bitcoin can be bought in Paxful, you will be charged zero fees for buying Bitcoins. But it is important that you pay attention to your currency conversion rates, these rates are charged by banks, for instance, sending money from Papua New Guinea to the United States will incur charges in exchange rates. (Put that into consideration.)
It is also important to note that not all currencies have offered; for example, when you search for currencies like KRW you will find no available offers for them. In cases like this, users whose local currency is KRW will have to request for offers and in the process be forced to negotiate for transactions that might see them pay more for fewer Bitcoins.
How to Sell Bitcoin on Paxful P2P Market Place
Before selling on Paxful, here is what you need to know.
- The minimum amount you can sell is 0.001 BTC
- Paxful charges a 1% fee on any successful sale; It is automatically deposited into escrow alongside the amount requested by your client.
- Paxful has a reputation system, where users are given the opportunity to rate each other according to their trade experiences.
- Once you make up to 50 different successful trades with above 20 different clients, you will be qualified to apply to become a verified vendor, your application will be considered if you have a high response rate and a success score above 33% (though at the moment only Canadians, Europeans and Americans can access this feature).
Cautionary Note: as I said earlier in this post, the paxful system is safe, however, users can be defrauded when they make errors. To help you avoid this error and trade safely, I gave a complete guide on how to trade to ensure 99.9% safety (this is later in the post).
That said, let’s check out the currencies and payment methods used;
3. Support Currencies and Payment Methods
Only the bitcoin wallet is supported in Paxful, no other crypto wallet. However, one can purchase bitcoin using over 300 payment methods.
The most common payment method accepted by sellers worldwide include;
Domestic Wire Transfer, Sephora Gift Card, Alipay, eBay Gift Card Walmart Gift Card and Paypal.
While in Nigeria, the popular payment methods include;
Amazon Gift Card, iTunes Gift Card, Western Union, MoneyGram, Steam Wallet Gift Card and google play gift card.
Whichever payment method you are using, note that there might be additional charges inherent in that method. Using Western Union, for example, attract some charges that are independent of Paxful
Talking about transaction charges, let’s check out Paxful’s transaction charges.
4. Paxful Transaction Charges
The Sellers pay 0.1% to 5% in transaction charge depending on the payment method.
here is the breakdown
- Bank Transfers: …………….0.1%
- Credit/Debit Cards: ………….1%
- Digital Currencies: ……………1%
Online Transfers: ……………..1%
- Cash Deposits: …………………1%
- Gift Cards:
- iTunes and Google Play …5%
- for every other gift card …2%
Buying Bitcoins from Paxful is free, i.e he pays Zero fees. It is wise to note that, most sellers will simply integrate his fee on their exchange rate. And have the buyers pay them unknowingly, this shouldn’t come as a surprise, as it is a common practice in such situations.
Going forward, there are limits to the number of transactions you can carry out depending on your verification level.
5. Transaction Limits
The 4 verification Levels are as below;
- Level 1 – Phone number and email verification. Limit @ $1,500
- Level 2 – Level 1 + ID verification. Limit @ $10,000
- Level 3 – Level 2 + address verification. Limit @ above $10,000
- Level 4 – Level 3 + EDD (Enhanced Due Diligence) or CDD (Customer Due Diligence). Limit @ no limit
6. Supported Countries
Paxful is designed to support all the countries of the world, however, as a company registered in the USA, it is obligated to comply with OFAC sanctions. i.e it cannot conduct business with or in countries banned by OFAC.
Therefore Paxful supports all countries apart from the following;
Burundi, Central African Republic Sanctions, Cuba, Crimea region, Iran, Iraq, Lebanon, Libya, North Korea, Somalia, South Sudan-related Sanctions, Sudan and Darfur, Syria, Yemen
Paxful services are not directed to a particular supported region or country, however, it gives special recognition to nations such as Nigeria, India, USA, Russia and China.
7. Customer Support and Public Opinion
Most users including myself have found the platform’s interface to be smooth, clean and adaptable. It perfectly fits into numerous screen types and offers an array of options and an eye-catching menu.
Paxfuls website’s interface seems to focus on customer support. Its help menu is clearly visible and in it lays a comprehensive FAQ section and a customer support forum that runs non-stop, 24hrs daily.
The support forum is not that lively and questions take 1 to 2 hours to receive replies. Questions, as stated in the live chat section, are answered within a few hours.
However, once you get your first reply in that chat session, your subsequent questions will be replied within 5 to 10 mins. The long waiting hour to me takes the “live” out of the live chat. If you can’t wait for that long, drop your questions and you will receive your answer by email.
The exchange rates on Paxful are slightly higher than what you find in regulated platforms, this is because some sellers accept alternative and less traditional payment methods like (e.g Skype voucher codes, Amazon gift cards, etc.), and so charge more for the convenience they provide.
Furthermore, sellers display their terms, conditions and service details so you will be kept abreast with what is expected of you, you can choose to accept or decline these terms. And can go into direct communications with a seller to negotiate terms.
8. Paxful Vs LocalBitcoins
Paxful and LocalBitcoins are the closest rivals in terms of P2P exchange. There is no much difference between these two exchanges. The transaction charges on both platforms are the same 1%. One obvious difference is that Paxful supports more payment methods 300+ while LocalBitcoins supports only about 30 payment method. Secondly, Paxful has better customer support.
9. Paxful Vs Remitano
Remitano like Paxful is a P2P exchange that has adapted better to the African market especially Nigeria than any other P2P exchange. It supports more cryptocurrencies (9) than paxful that supports only one. However, Remitano has one payment method while paxful has 300+
Read my full review of remitano here
10. Paxful Vs Coincola
Coincola is more sophisticated than Remitano because it’s a P2P market place as well as a trading platform. Coincola supports multiple cryptocurrencies and also support the purchase of bitcoins through bank transfer and multiple gift cards. This is still nothing compared to the 300+ payment methods supported on Paxful.
Read my full review of coincola here
11. How to Trade Safely on Paxful
Some people are of the opinion that Paxful is Legit others think it is a scam, but whatever you are thinking, remember that millions of users have had hitch-free transactions. And yes there are scammers in Paxful like every other P2P marketplace; it is your responsibility to pick the right vendor and trade safely. If you wish to trade safely, here are my recommendations:
Choosing a Seller
The common mistake most people make is choosing a seller based on the rates they charge per Bitcoin, most scammers in their bid to get fast clients will place lower rates, this is meant to lure in people seeking for so-called “good deals”. In the end, the good deals will turn sour and so will their hard-earned money. Rather than cheaper rates, here is what you should be looking for in a vendor.
- He has completed over 2BTC worth of trade with a minimum of 30 trades
- His feedback score should be at least 98% from a minimum of 10 persons
- His account should have been active for over 2 months
- He has a verified identity, residence, phone number, Facebook ID etc…
- He has at least 10 partners
- He has a maximum delivery time you are comfortable with.
- Only trade with verified buyers and sellers.
Below is a list of actions you should never take to be safe.
- Do no trade outside Paxful with a seller even if he/she offers you a discount since you will lose the safety of trading with Paxful’s secured escrow
- Do not disclose more information about yourself to the seller when a trade is ongoing
- Pay attention to the trade time to avoid transferring money to the seller after the timeout
- Only send your payment information through the paxful interface and endeavour to check that the names in the account details are in consonance.
- Mark payments ‘as made’ only when you have paid or received payment else you will be denied the trade
- Should you encounter any issues or sense irregularities with the seller or buyer endeavour to talk it out with the buyer or seller before proceeding to contact customer support. Customer support should be your last resort.
12. Demonstration Video
In this video, I bought bitcoin using Neteller and sold the Bitcoin for Naira.
There is no how P2P bitcoin exchanges can be mentioned without including Paxful. It has increased the adoption of bitcoin with its wide variety of payment methods and is easy to navigate interface. Paxful is one of the 10 best exchanges to buy bitcoin.
If you follow the instructions listed in this post, you’ll surely have a pleasant experience with Paxful.
That brings us to the end of this Paxful review
Now it’s your turn,
Tell me in the comment section;
Have you used Paxful?
If yes, what payment method did you use to buy bitcoin on the platform and what was your experience?
If No, are you going to create an account and use the platform?
Or maybe you have a question about something I said in the post.
Whichever it is, let me know in the comment section.
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