Paxful Review 2020 - Is This P2P Platform Safe & Legit?

Cooper HaywoodBy: Cooper Haywood
Published: April 17, 2020

Paxful Quick Facts

Available Countries
Any country that is not under international sanctions
Fees
1.0% seller fee, 0% buyer fee
Payment Methods
Multiple options. Credit card, debit card, bank transfer, cash, etc.
Deposit Methods
Cryptocurrency only
Withdrawal Methods
Cryptocurrency only

As a peer to peer exchange, Paxful's primary goal is to make it as easy as possible to buy Bitcoin.

They do a very good job of making that happen. While most exchanges have two or three payment options, Paxful has dozens. It's possible to use everything from a gift card to physical gold to a bank transfer.

With all of these different payment methods just about anyone can get some Bitcoin now, whether they're a Wall Street broker or a farmer in South Africa.

Buying Bitcoin With Paxful

For anyone who wants to know how to buy Bitcoin with Paxful here is everything that you should be aware of.

The most important thing to know about Paxful is that they only support the buying of Bitcoin. If you want to acquire any other currency, XRP, Ethereum, Cardano, etc. You'll need to first buy the Bitcoin on Paxful and then send it to another cryptocurrency exchange to trade it for a different asset.

If you're outside of America we recommend Binance as they have the lowest trading fees. If you live in America you can use Coinbase. Even though Coinbase's trading fees are high they're a very reliable and secure exchange with a fairly decent selection of cryptocurrencies.

The actual process of buying Bitcoin on Paxful is very straightforward.

  1. Create an account. There are the standard requirements like a valid email address and secure password.
  2. Navigate to Paxful's buy Bitcoin page
  3. Select your payment method and then choose how much Bitcoin you'd like to buy
  4. Click "Search for offers"
  5. Once you've found an offer that you like from a vendor who you can trust, you can click "Buy"

Paxful will now bring you through the buying process and the Bitcoin will arrive in your Bitcoin wallet once your payment method clears.

Payment Options

This is really what sets Paxful apart from the competition, the number of payment methods that they support.

Live in Europe and use Skrill? Buy Bitcoin with it! Have an iTunes gift card that you're never going to use? Buy Bitcoin with it! Just to give you an idea of the payment methods that Paxful supports we'll list some of them here.

  1. Credit cards and debit cards
  2. Bank transfer
  3. Western Union
  4. Skrill
  5. Gift cards
  6. Alipay
  7. The cash app
  8. ApplePay
  9. Cash by mail
  10. Cash in person
  11. Line pay
  12. Revolut

The list goes on. To see all of Paxful's payment methods you can click here.

Buy Bitcoin in Person

As mentioned, Paxful supports in person cash transactions. These can be very beneficial as the buyers and sellers can connect and transact without leaving a digital footprint, I.e. bank transfer record or credit card statement.

While Paxful does their utmost to ensure the security of every transaction it's still important to do your own research especially when dealing with cash. Avoid transacting with new sellers as the likelihood that they'll turn out to be a scammer is fairly high. Also, it's best to go through Paxful all the way even if the seller finds a way to contact you and offers to cut out Paxful to save the fees.

Finally, Paxful can point you in the right direction if you're looking for a Bitcoin ATM. Paxful is very useful because they aggregate Bitcoin ATM information in one place so that you can see where the closest ATMs are and what the commission fees are.

Supported Countries

Unlike many exchanges Paxful does not explicitly say which countries' residents can buy and sell Bitcoin on their platform. Instead, Paxful states that any trades which violate international sanctions are now allowed. This information is laid out in their terms of service. Overall Paxful wants to make it as easy as possible to buy and sell Bitcoin and that means that they try to let as many countries as possible participate.

Strong Sentiment in India

Until recently it was illegal to trade cryptocurrencies in India and many crypto exchanges were forced to shut down.

In that type of environment Paxful has done very well as it's a peer to peer exchange where crypto trade happens between users instead of through a centralized platform. Although you must create a Paxful account in order to trade, the service is still able to fly under the regulatory radar in many places. Such is the case with India.

Using their presence in the country, Paxful conducted a survey of the Indian populace which returned some surprising results. Based on their review of the data, the Paxful team found that just under 80% of all respondents use cryptocurrency because it's an inexpensive, fast way to transfer money. More surprisingly, the survey found that out of all Indian investors aged 18 to 55, fully 75% of them owned at least some cryptocurrencies!

This Paxful review showing such a positive outlook for crypto in India is huge news. 1.3 billion people live in India and if they continue to buy into crypto there's no telling the amount of good it could do for the market.

No Fees in Africa

Given that trade sizes in Africa tend to be fairly small Paxful has decided not to charge any transaction fees for trades below $20. That's a bold long term move which hopefully leads to greater Bitcoin adoption and an overall increase in profits as more people get into crypto.

It's also a bold move given that a review has shown that 45% of all of Paxful's wallets belong to African traders. The peer to peer service is especially popular in a continent where accessing traditional exchanges can be difficult. Inside of Africa Paxful has stated that they've seen the largest growth in Ghana, Kenya and Nigeria.

Supported Currencies

As one would expect from such an internationally focused exchange Paxful supports quite a few different currencies. For example, USD, GBP, CAD, AUD and EUR to name just a few. In actuality the list of supported currencies is much, much bigger.

Paxful can support so many currencies because their site architecture means that they're not actually required to custody funds. Rather traders can work with each other using cash or bank transfers. The result is that just about any currency can be used.

Selling BTC With Paxful

It's not only buying Bitcoin that's possible with Paxful, selling Bitcoin is also an option. As a seller you'll have the possibility of getting paid via a bank transfer, Western Union or cash in person in addition to other payment methods.

That being the case, for most people who are interested in selling Bitcoin an exchange like Coinbase would be a much better option. Selling on Paxful is designed primarily for professional sellers versus the average person who wants to sell $100 worth of Bitcoin now and then.

Is Paxful.com Legit?

Is Paxful legit? A lot of people ask and the short answer is yes, Paxful is definitely a legit operation. According to Crunchbase, Paxful was founded in 2015 and is headquartered on the East Coast of the United States.

According to Paxful's website they have more than 200 employees who work at offices around the world, including NYC, Hong Kong, Estonia and the Philippines.

In terms of a presence on social media, Paxful has accounts on Facebook, Instagram, Twitter and YouTube.

It should be pointed out though that these accounts are largely for promotion and are not intended as a form of customer support. If you need customer support you can contact the Paxful chat line (more information on this below).

Partnership with Binance

Further proof that Paxful really is a legit operation is provided by their recent partnership with Binance, the world's largest cryptocurrency exchange. While Binance is famous for listing hundreds of cryptocurrencies, they are sorely lacking when it comes to payment methods. Binance has an option for their users to buy crypto with a credit or debit card but that's about it.

On the other hand there is Paxful which has dozens of payment options but the only coin available is Bitcoin. It's not even possible to exchange coins directly on Paxful or through a Paxful wallet. So a partnership of Binance and Paxful makes perfect sense. By and large they don't compete with each other but each has a strength that compliments the other's weakness.

More information on the partnership is available on Binance's website. With this integration it should be easy for someone using Paxful to get started on Binance so that they can exchange their Bitcoin for whatever other crypto they want.

Account Verification

Like almost every other American based exchange Paxful has a KYC verification process. What sets them apart from other exchanges though is that it is possible to trade on Paxful, up to a certain amount, without submitting verification documents.

The level one Paxful verification only requires a valid email address and phone number, similar to the requirements for using many Bitcoin ATMs. At verification level one buyers and sellers can transact up to $1,500 without needing to provide any further documentation.

Verification level two allows for a lifetime trade limit of up to $10,000. At this level a user must submit a copy of their driver's license or passport in order to verify their identity.

There are further verification levels, all the way up to level four, and more information on these verification levels is available here. Paxful also has another article explaining why traders might want to verify their accounts.

Paxful Customer Support

No matter where you are in the world you'll be able to reach the Paxful support team as they're available 24/7. According to Paxful the best way to get in touch with customer support is via the live chat. More information on how to start a live chat is available on Paxful's website.

It's also possible to send an email to Paxful at: [email protected] although it appears that live chat is the fastest way to get support. To dissuade fishing Paxful warns all traders to check which email address a message originates from. If it's anything other than the email address listed above it's not Paxful's official support team.

Enable 2FA

Enabling 2FA (Two Factor Authentication) is one of the easiest ways to protect your account from getting hacked. Paxful supports 2FA and as soon as you create your account you should enable it.

Instead of linking 2FA to your SIM card (receiving a one time password as a text) it's better to use Google Authenticator. With GA the password is generated locally on your phone and it is unique to your phone's hardware. That means that a hacker won't be able to access your account unless they have your phone.

Who owns Paxful?

Paxful is a private company that has never had an IPO or an ICO. The company was founded by Artur Schaback and Ray Youssef.

What Makes Paxful Unique?

Affiliate program

Paxful has a generous affiliate program which rewards traders who get their friends to start using the platform. When you refer a friend you will be eligible to receive 50% of their trading fees.

That's a good deal already but here's what is really cool, if your friend refers someone then you will receive 10% of that person's trading fees. Paxful refers to this as a tier 2 affiliate.

A lot of other exchanges have affiliate programs but very few of them are as generous as the Paxful program. More information is available here.

Buy and Sell Gold With Paxful

One of Paxful's most unique features, a feature that sets them apart from just about every other crypto exchange in the world, is that they've moved into the gold business. In response to user demand it's now possible on Paxful to trade gold for Bitcoin.

In order for the trade to be executed safely the Bitcoin is stored in Paxful's escrow system. It remains there until the seller confirms that they've received delivery of the physical gold in exchange for the Bitcoin.

This is a really interesting feature of Paxful and it makes a lot of sense since many of the same people who are interested in gold may also be interested in Bitcoin. Also, it helps to reduce the cost of the trade. Previously if you wanted to go from gold to Bitcoin you would have had to sell the gold into cash and then use that cash to buy Bitcoin. The whole time you would be paying exchange and commission fees. This new process is easy to use and really a great addition to the crypto ecosystem.

The one downside, however, is that any trade over $50 will require the trader to complete a KYC verification before it can be completed.

Success in 2019

Paxful had a great 2019 when it completed more than $1.6 billion in peer to peer Bitcoin trades. At first glance that might not sound like a lot, given that an exchange like Binance clears that much volume every couple of days. However, for a peer-to-peer exchange, $1.6 billion is a lot of traffic and it represents steady growth since Paxful's founding in 2015.

In terms of wallets, a million new Paxful Bitcoin wallet accounts were opened in 2019 which means that Paxful now has a total of three million Bitcoin wallet accounts. Not bad for a platform that did just $5.9 million worth of trades its first year in business.

Overall Paxful has shown consistent 25% year over year growth. Given this expansion they are slated to become a serious platform with significant trading volume sometime in the next few years.

Bitcoin for the Masses

Paxful fulfills a certain role within the cryptocurrency ecosystem. All they sell is Bitcoin and the exchange's primary feature is the incredible number of payment options that they enable.

Whether you want to use some old gift cards or Western Union, Paxful has a payment method that will work for almost anyone. It's easy to get started too as all you need to create a trade account is an email address and a cell phone number.

Given that LocalBitcoins recently extended their KYC requirements, Paxful is more important than ever. The cryptocurrency ecosystem needs a place where people can buy Bitcoin without having to provide an undue amount of personal information and Paxful is the ideal peer to peer exchange to fulfill that role.

Finally, it should be noted that Paxful is one of the few places on the internet where it's possible to turn gift cards into Bitcoin. This is a really unique service and helps to set Paxful far apart from the competition

Is Paxful safe? As long as you do your research and only transact with trusted vendors, definitely! So if you're ready to open an account and purchase Bitcoin today just head over to Paxful.com to get started.

About the author
Cooper Haywood
Cooper Haywood
Cooper is a former equity research professional/finance analyst who holds an MBA in Financial Instruments and Markets from New York University's Stern School of Business. He left the investment banking world in 2015 to become a full-time investor and joined CoinFi as an analyst in 2019.