As described on the PayPal website, the process of obtaining a PayPal Prepaid MasterCard is straightforward. The card is ordered through the PayPal website and is sent through the mail. After it is activated on the site, funds currently in PayPal can be transferred to the card account. It can then be used at any website that supports the use of MasterCard debit cards to purchase Bitcoin or other cryptocurrencies.

conwaytransport.com.au is one exchange that allows links to MasterCard debit cards and other credit cards. These can be used to both buy and sell Bitcoin and other cryptocurrencies. The website has at times reported that the link to the PayPal cards is inoperative, and the exchange is not currently accepting new accounts. However, these can be considered temporary problems that should be resolved shortly.

Other Methods

For the one time purchaser of Bitcoin, creating a PayPal MasterCard debit card exclusively for this purpose may seem complicated and too burdensome. For this individual, there are other methods that use an intermediary relationship to arrive at the same destination. One of the more imaginative of these routes is through the Virwox site.

Virwox (the “Virtual World Exchange”) is not a cryptocurrency exchange or site. It is a platform for trading imaginary currencies used in online gaming. One of these currencies is Second Life Linden Dollars (SLL), an imaginary currency used in the game Second Life. This game is one of the most popular online fantasy games on the Internet.

The transaction begins with purchasing SLL with money in a PayPal account. Create an account on the Virwox exchange, ignoring the information on the avatar you will use in the Second Life game. Fund this account with money transferred from your PayPal account. Once this transfer has been completed, you can purchase SLL by going to Exchange->USD/SLL on the left side of the screen.

Once this transaction is confirmed, return to the same section on the left side of the screen and exchange SLL for Bitcoin. You will need a Bitcoin wallet to hold the newly purchased Bitcoin. This exchange is not a Bitcoin exchange but accepts Bitcoin as one way of paying for SLL. Because the Second Life game can make money for players, the site also accommodates transfers back to other currencies.

Keep in mind that buying Bitcoin through Viwox involves two transactions and a fixed price for Bitcoin. The dual transactions mean that the total fees for this transaction are higher than for other methods, and the fixed price for Bitcoin may not be the lowest available on the market. However, by “washing” PayPal funds through SLL it is possible to complete a Bitcoin purchase.

Individuals who want more flexibility in conducting business with Bitcoin may find a significant benefit by creating an account on Wirexapp. This is an integrated cryptocurrency site that supports several functions, including buying and transferring Bitcoin. It also offers a Bitcoin wallet and a payment card. This card is the link to the PayPal system.

After creating an account on the Wirexapp site, click on “Request a card” on the upper right-hand portion of the screen. You can select either a physical or a virtual card.

Once you have the card information, go to the PayPal site and link this card to your PayPal account. You can now transfer funds from your PayPal account to this Wirexapp card. Please note that this is subject to the normal transfer times of any PayPal transaction.

Once your Wirexapp card has received the US dollars from your PayPal account, you can return to the Wirexapp and purchase Bitcoin. As with the Viwox site, there is only one price for Bitcoin on Wirexapp. However, unlike Viwox there is only one transaction fee since you are purchasing Bitcoin with US dollars. Once the card is established and linked to PayPal it can also be used to transfer sale proceeds to PayPal from the Wirexapp site when you sell Bitcoin.

Coinbase is one of the Bitcoin exchanges that lists PayPal as one of the available methods for withdrawing funds from the sale of Bitcoin. Like conwaytransport.com.au, this link is sometimes inoperative. It should also be noted that Coinbase charges a fee of % to transfer money to a PayPal account. Some users may consider this too high, considering transfers through ACH are done free of charge.

Derivative Transactions

Although not technically buying Bitcoin with funds on PayPal, there are two other methods that create the same financial position. These are supported by PayPal and have other advantages as well. The first of these involves purchasing a Contract for Difference (CFD) which gives the owner the right to the profit from a change in the value of Bitcoin.

CFD are available to non-US citizens on the eToro site, but available to US citizens and others through Plus Please note that this financial exchange does not involve actually purchasing Bitcoin and that the financial instrument involved includes the use of leverage. This magnifies both gains and losses. Financial leverage is a powerful tool but is not suitable for novice or beginning investors.

Another transaction that fully mimics the ownership of Bitcoin without the use of leverage is a secured loan as offered by Xcoins. This platform does support the transfer of funds from PayPal and boasts a secure and stable connection. This provides what is perhaps the closest and most direct way to “buy Bitcoin with PayPal.”

The transaction looks like a sale, and produces the same financial result, but is structured as a loan of Bitcoin with the market value plus an interest payment held as collateral by the lender.

After the payment through PayPal to the person loaning the Bitcoin, Xcoin transfers the Bitcoin to your wallet. They are now yours to hold, spend or sell.

If the price of Bitcoin falls, you will need to add additional money to the transfer when you return them to repay the loan. If the price of Bitcoin goes up, you can sell the Bitcoin and repay the loan while pocketing the increase. In every way, the secure loan mimics the direct ownership of Bitcoin.

Conclusions

Buying Bitcoin with funds on deposit at PayPal directly is not possible. Some exchanges report that sales proceeds can be transferred to PayPal, but those systems have also reported outages. It is fair to say that PayPal’s reluctance to get involved in the Bitcoin market has been effective. Some third-party intermediary is necessary to complete a direct purchase of Bitcoin.

For some, the use of a bank as an intermediary through a PayPal MasterCard debit card is a simple step and even one that is already in place. For trading platforms that allow links to MasterCard, this is the most direct approach. However, for the one-time purchaser, creating a new card may be more trouble than it is worth. This is probably the case with creating a Wirexapp account as well, which is simply the same relationship from the other side of the trade.

All things considered, the Xcoins transaction, although not an actual purchase of Bitcoin, probably comes closest to the goal of buying Bitcoin with PayPal funds. It replicates the financial results of owning Bitcoin and can be completed through PayPal. It is admittedly more complicated but gets the job done.