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Have you been hearing about the crypto-currency marketplace, Paxful? Paxful is a peer-to-peer crypto marketplace that allows users to buy and sell crypto in a variety of ways. With a large amount of payment options and more, Paxful is causing a lot of buzz. Is Paxful right for you, though? Read our review of Paxful now and learn what you need to know before buying.
For the individual looking for a Peer-to-Peer crypto marketplace that allows users to buy and sell crypto using various means of payment, Paxful might be a good fit. This platform allows users to buy/sell cryptocurrencies directly from other users, operating independently from spot-trading and margin trading platforms. What sort of services does this P2P platform offer, and is it a legitimate platform to conduct business?
A Brief History Of Paxful
Paxful was founded in 2015, by co-founders Ray Youssef (CEO), and Artur Schaback (COO). The two started the company with the intention of creating an open Peer-to-Peer marketplace where individuals could buy and sell their bitcoin between one another, directly, without the need of using a trading platform, or meeting in person (though some sellers certainly have this option available). The company’s elevator pitch is that they are a crypto platform akin to the free enterprise of Uber, meeting the payment processing of PayPal, meeting the potential for a person’s economic independence via the use of the crypto markets (the “Wall Street of the people”). Paxful has multiple headquarters around the world, including Hong Kong, New York City (USA), Tallin (Estonia), and Manila (Philippines). CEO Artur Schaback is a systems administrator, a full stack web developer, and has been a serial entrepreneur for nearly 20 years. COO Artur Schaback has an extensive history as a developer of financial technology and infrastructure. Ivan Suhharev is the residing CTO at Paxful and was previously the lead developer of web systems at Adcash.
The marketplace is available to use worldwide except for in the countries of: Yemen; Syria; Sudan and Darfur; countries affected by South Sudan-related Sanctions; Somalia; North Korea; Libya; Lebanon; Iraq; Iran; the region of Crimea; Cuba; countries affected by Central African Republic Sanctions; and Burundi. Paxful fully complies with the Office of Foreign Assets Control, as well as the Specially Designated Nationals and Blocked Persons list. This means that Paxful will block certain individuals that appear on these lists, specifically in the regions of: the Balkans; countries affected by the Democratic Republic of the Congo-related sanctions; Western Balkans area as well as Belarus, due to Ukraine and Russia-related sanctions; countries affected by Venezuela-related sanctions; countries affected by Zimbabwe-related sanctions. A full list of Paxful’s restrictions can be found here.
Paxful Product Offerings
Paxful allows customers to buy and sell Bitcoin with over 350 different payment methods available. As the platform is a Peer-to-Peer marketplace, users buy and sell bitcoin directly between one another, without the use of spot market trading. Essentially, a user sells their bitcoin with an offer that other users can match to purchase the bitcoin. The platform is kind of similar to a marketplace like Craigslist, except for bitcoin. Users can purchase bitcoin using bank transfers, online wallet transfers (PayPal, etc.), money transmitters (such as Western Union); cash and in-person; cryptocurrencies including Litecoin, NANO, DASH, Ripple (XRP), Cardano and more; gift cards including Walmart gift cards, iTunes cards, Amazon cards; and more. The seller denotes which forms of payment they will take for the sale of their bitcoin. Since Paxful is simply only providing a platform for the transaction to take place, they are not processing the transactions, and do not have ties or affiliations with any of the payment methods offered, and actually do not make claims to being supported by any of those services. This allows users to buy and sell bitcoin using many different payment methods, as no 3rd party is between the buyer and seller.
Paxful Platform And Tools
The process of buying bitcoin is different depending on the method that the seller requires for payment. To find an offer that fits the desired payment criteria, a user simply searches for offers that have sellers with bitcoin to offer for the method of payment the user may be looking to spend. The price of bitcoin may vary greatly depending on the method of payment used, as some sellers have higher prices than others. As one may expect, some methods of payment have more sellers than others. Once an offer has been found, a customer can then enter the amount of bitcoin they would like to purchase. Some sellers have limits on the amount one can purchase at one time. If using a gift card, a receipt of the purchase will be required to verify that the gift card is valid. After creating the purchase order, funds will move into escrow, and a live chat will be opened between buyer and seller. Once the transaction has been confirmed, the funds will be released to their proper channels.
Selling bitcoin is similar to the process of purchasing bitcoin on Paxful. A seller can view offers of what buyers are willing to spend. Sellers can also create their own listing, denoting which currencies and forms of payment they will require, as well as any limits. The amount will then be withdrawn and held in escrow, released upon successful completion of the order. It is at this time that Paxful will take their fee. Otherwise, if the order does not complete, the bitcoin is released back into the seller’s wallet, with no fee taken by Paxful.
Paxful also has a program called the Virtual Bitcoin Kiosk. This is essentially a widget that users can put on their websites and blogs, allowing people to use the platform through the widget. The user will get 2% of every purchase made through the widget.
Paxful offers an affiliate program that rewards users with profits from every trade that referred customers execute. The user reaps 50% of their Tier 1 affiliates’ fees, along with 10% of their Tier 2 affiliates’ fees paid by their affiliates. This makes a great incentive to build the community at Paxful.
A blog on the Paxful site maintains news and information for customers and anyone curious about Paxful’s services and crypto information. On the blog, one will find articles ranging from Bitcoin Basics to Paxful news, as well as everything in between. This is a fairly decent trove of articles which includes a few articles about how to buy Bitcoin in various regions of Africa, personal stories, and more.
Finally, Paxful offers a mobile wallet application that can be used to store a user’s Bitcoin. Within the app, users can keep tabs on their transaction statuses by viewing their open transactions. A customizable wallet profile allows customers to control the information others may see when interacting with the wallet. The wallet is what is initially used to transfer and store funds acquired through sales/purchases.
For customers purchasing Bitcoin, Paxful does not charge any transaction fees. However, it should be noted that the price one pays may be significantly different depending on the seller’s requirements, as the seller sets the price for the bitcoin they are selling. The rate can fluctuate because of payment method, status of account verification, the size of the order, or the currency pair used for the transaction. Any fees that may accrue to the user would likely happen outside of Paxful’s platform, as generally, money transmitting services such as Western Union tend to carry fees with their services, as do credit cards. Be sure to keep this information in mind, as “No Fees” comes with a hidden asterisk attached.
Paxful does charge fees for any customers selling bitcoin. The fee one pays is dependent on the payment method accepted for the transaction. There is a 0.5% fee for all sales made with Bank Transfers. A 1% fee is in place for all sales made with Digital Currencies, Online Wallet Services, Cash, and Credit/Debit Cards. Sales made with iTunes Gift Cards and Google Play cards both hold a 5% fee. Any sale made using any other gift card offered on the website carries a 2% fee.
For all Send transactions from Paxful’s wallet to an external wallet, a 0.0005 BTC fee is in place, which covers the miner fee, as well as the cost required to upkeep the infrastructure of the wallet and platform. For any user sending bitcoin to another Paxful user, there is no fee for the first five transactions in a month. After the amount of transactions exceeds 5 per month, a fee of 1% or $1.00 (whichever is greater) will be applied to each transaction. This fee will be settled in BTC.
Paxful Customer Service
For general help and information, Paxful provides a fairly in-depth FAQ covering account basics and any questions one might have. For customers that require a more personal and immediate response, Paxful provides an email address that allows customers to reach out to Paxful’s customer support at any time, around the clock. Paxful also has social media accounts on Facebook, Twitter, Youtube, and Instagram. A live chat feature also enables users to communicate with customer support for inquiries and resolutions.
Creating An Account On Paxful
The process for registering a new account on Paxful is extremely straightforward. To start, click the purple “Create Account” at the top header of Paxful’s webpage. This will bring up a standard information field that will require the user to enter a valid email address, desired username, as well as a password. Once the proper fields have been filled, view Paxful’s Terms of Service, their Affiliate Program Terms of Service, and the Privacy Notice. If the proposed terms are agreeable, click the box on the account creation page. After successful reCAPTCHA to verify that the user is not a robot, the new customer is on their way to buying and selling bitcoin on Paxful. From there, the user is free to enable 2FA (strongly recommended), set a profile picture, verify phone number, and confirm their email. Users can then also fund their wallets via the various means offered as payment.
There are different account limits in place dependent upon the amount of verification one has provided. Providing email and phone verification achieves Level 1, with a limit of $1,500. Adding ID verification achieves Level 2, as well as a $10,000 limit. Verifying address achieves Level 3, with a $10,000 limit. Level 4 has no limits but is achievable only by operating and exercising proper account standards.
What Makes Paxful Different?
Being a Peer-to-Peer marketplace makes Paxful uniquely different than the many spot-trading and brokerage platforms available in the cryptocurrency industry. This allows for more open trade amongst individuals. The addition of allowing users to buy and sell bitcoin with multiple options, including gift cards and money orders, is an ingenious way of enabling everyone around the world to purchase and sell using various means of payment.
Is Paxful Legitimate And Trustworthy?
Paxful is a registered company within the United States of America. This information can be found in Paxful’s Terms of Service. This means that the platform they provide is indeed legitimate. However, it should be noted that Paxful has no relation or ties to any of the payment methods offered, nor does it state that these payment methods will be a valid method for the exchange of bitcoin. This is because the market is strictly P2P, with the payment methods being set by the seller themselves.
That being said, a lot of time and care must go into the effort of researching whether or not a seller is reputable. Profiles do come with a rating system so that others may be aware of shady tactics. This, however, does not necessarily stop people from being scammed by bad actors.
Paxful’s website does have a page dedicated to customer reviews; however, this should be taken with a huge grain of salt, as no company would ever willingly post a negative review about their own services. Their rating on Trustpilot is 3/5, with many negative reviews about being scammed by false sellers. As always, every cryptocurrency user should take great care and effort into performing their due diligence of research before attempting to use a platform or service.
Conclusions For Paxful
For the concept, Paxful is highly unique, offering a marketplace in which others can trade bitcoin using various methods of payment not often found on other platforms. While the platform may have its benefits, great care should go into researching whether or not a seller is reputable.
- Peer-to-Peer marketplace enabling individuals the right to buy and sell bitcoin
- Multiple payment methods available including gift cards and online wallet services
- Shady sellers
- Many people complaining of scammers
- The price one pays may differ greatly from the actual current spot-trade price
- Paxful does not claim to have any connection or agreement with any of the payment methods