Paypal BTC - Tread Carefully, If at All

[mrob82]

I know there has been a few discussions/posts based on Paypal's "new" ability to buy cryptocurrency.  I have said it in one or two posts, but newbies, oldies and anybodies need to proceed with extreme caution.  I'm still checking to find more articles to verify that this is happening, but I am not surprised at all that Paypal has started limiting (basically freezing or suspending accounts) for people that have made multiple trades within a specific amount of time.  This is just one example, but I am sure that there is going to be an outpouring of articles/social media posts that are going to be coming with the exact same issue. 

Paypal is notorious for just freezing or closing accounts for minor issues or what they perceive as anything out of the ordinary.  Everyone needs to proceed with extreme caution, and my advice would be simply to just stay the heck away from Paypal involved cryptocurrency.  As stated best in one article, "If they are not your private keys, the BTC is not yours."  The article below was initially taken down, but it is back up.

Don't want to see anyone lose their rear ends because of Paypal shenanigans. Stay Safe!

https://cointelegraph.com/news/paypal-suspends-user-for-crypto-trading-using-paypal-s-own-service

[tbct_mt2]

Before Paypay expanded their service and products to bitcoin, they already are an unsafe platform to use. The problem of chargeback on Paypal are very risky and they've never resolved it for their customers. I don't know they've ever spent their dedication and efforts to resolve it.

With the product for Bitcoin, Paypal only open a middle product for Paypal users to buy bitcoin from Paxos. You as a customer won't buy bitcoin directly on Paypal.

[mk4]

Yea, even in the e-commerce community PayPal is also heavily hated due to their heavy favour towards the customer side even if the customer's reasoning is total bullocks. Unfortunately every online seller is forced to accept PayPal because not accepting PayPal probably decreases potential sales by approximately 15-20%. Can't wait for them to be replaced by something better.

[chaser15]

Not a fan of using Paypal but if the platform is not safe, their customers shouldn't be increasing in numbers over time. If their reputation is bad, then why merchants or online sellers still consider them? Potential decrease in sales? Then it means Paypal is strong despite those complaints. Merchants can easily get rid of them if the company is really worst.

There are isolated cases but Paypal addressed those. They won't stand today if they just let those cases unresolved.

Chargeback is not risky unless the transaction involves crypto that's why it wasn't recommended to do a Paypal to Crypto via P2P before. Now that Paypal supports crypto, I don't know how a chargeback should apply. A chargeback is a common feature in the banking system and it has lots of advantages.

Don't get me wrong here. I'm not again a fan of Paypal.

[mk4]

Not a fan of using Paypal but if the platform is not safe, their customers shouldn't be increasing in numbers over time. If their reputation is bad, then why merchants or online sellers still consider them? Potential decrease in sales? Then it means Paypal is strong despite those complaints. Merchants can easily get rid of them if the company is really worst.

Potential decrease in sales? More like a guaranteed decrease in sales. Zero doubt about that. And the reason why their customers are increasing is because they're heavily customer-sided. The heat is mostly from the merchants.

Chargeback is not risky unless the transaction involves crypto that's why it wasn't recommended to do a Paypal to Crypto via P2P before. Now that Paypal supports crypto, I don't know how a chargeback should apply. A chargeback is a common feature in the banking system and it has lots of advantages.

There's still risks of chargebacks even when dealing with physical items, just significantly less. PayPal have sided a lot with customers even when the customer is doing some shady crap like reporting a product damage and returning a different item.

[Charles-Tim]

PayPal is a custodial services that provide bitcoins and some other crypto services, but we know that PayPal users can not use the platform to send and receive crypto, all they do is to buy and sell crypto. I can not used the PayPal for these reason and this single reason is enough for people not to use PayPal. Also, they are custodial means of buying and selling cryptocurrencies. The truth is, I do not see how PayPal traders see it easy to use the service except one reason that I mentioned below, but as for me, I can not use PayPal for dealing withy bitcoin and other cryptocurrencies because it will only make things difficult for me.

Not a fan of using Paypal but if the platform is not safe, their customers shouldn't be increasing in numbers over time. If their reputation is bad, then why merchants or online sellers still consider them? Potential decrease in sales? Then it means Paypal is strong despite those complaints. Merchants can easily get rid of them if the company is really worst.

I too will not consider PayPal not safe, PayPal was providing non-crypto service before and it is the first of its kind, belonging to a company based in USA, that makes it to be strong. Like now, it is very possible PayPal will be used to buy goods and services with crypto by it's users from over millions of marchants because PayPal has been a strong company right from before that do not want to be behind as cryptocurrencies are now used by people for many reasons now.

But, for dealing with crypto, I will not consider PayPal safe, PayPal will only make bitcoin and other crypto that are supposed to be privacy coins not to be, in which the initial purpose of bitcoin can be compromised. If I can not be able to send crypto on PayPal, is that not a deceitful way PayPal is comproming people not to have privacy, they are only storing the bitcoin for their own in which only fiat is is used, or what do you think? Only ignorant people are using PayPal crypto services and they are learning lessons.

[lovesmayfamilis]

I think that for members of the forum who are well-versed and understand all the risks of using the services of this payment system, it becomes clear whether to work with PayPal or not.
However, according to a recent survey by Mizuho Securities of PayPal clients, most are willing to use cryptocurrency to buy services and goods on the system.
https://pro-blockchain.com/en/65-of-traders-on-paypal-ready-to-use-bitcoin-to-pay-for-goods-and-services-survey

At least 65% of people who use the Paypal app to trade bitcoin are prepared to start using the top cryptocurrency to pay for goods and services at the 28 million stores supported by the payments company throughout the world.

I don't trust PayPal either.  I think that all innovations with cryptocurrencies are created only to increase the number of customers, and, accordingly, increase their profit. At the moment, I do not see absolutely any convenience in paying for goods with cryptocurrency, specifically for the client.

[Tessnik]

PayPal has lost it face in the fin tec sector even far back before the PayPal bitcoin cooperation and after that there are much accusations against PayPal recently which have seen account being ban due to bitcoin transaction with founds lost.

[mrob82]

I think that for members of the forum who are well-versed and understand all the risks of using the services of this payment system, it becomes clear whether to work with PayPal or not.

I think that is the main problem, people who are versed in cryptocurrency are going to understand that this is a bad idea.  People new or even relatively new to the industry are the targets that are getting ready to get hosed big time.  I need to find the article, but it said something like 24 million people had already started trading, or maybe verifying their information to use paypal.

The other problem is that if your account was froze for a reason other than crypto, your crypto becomes froze as well.  There are just so many different ways that users can run into problems its ridiculous. 

[mrob82]

There's still risks of chargebacks even when dealing with physical items, just significantly less. PayPal have sided a lot with customers even when the customer is doing some shady crap like reporting a product damage and returning a different item.
[/quote]

The problem with chargeback's are generally with the seller dealing with those shady individuals.  The issue comes when you are using paypal as an ecommerce site and receive a couple of random chargeback, now your account is limited or froze because of the chargeback and you are dealing with Paypal via the whole case resolution.  From my understanding, you are unable to sell the cyrpto at this point - due to the limitation of your account for a couple of days.  If crypto drops 20%-30%, oh well - the user is just going to have to take the loss.

[Lhaine]

I don't trust PayPal either.  I think that all innovations with cryptocurrencies are created only to increase the number of customers, and, accordingly, increase their profit. At the moment, I do not see absolutely any convenience in paying for goods with cryptocurrency, specifically for the client.

For me it's better to use crypto exchange than to use PayPal platfrom for buying crypto currency. There are many accusations against them for blocking users that have crypto transaction that use their platform even before they add crypto currency there. So not secure way to buy and sell crypto currency even you can transfer it to your wallet it's the same.

[The Cryptovator]

That's what I was worried about when I heard that PayPal going to allow their users to buy/sell Bitcoin. Why account should limit since they have been allowing their users to buy and sell Bitcoin? Why not they just limit the trading amount for each week or month? They why should buy Bitcoin via a PayPal account? They just make the bitcoin system more centralized.

I haven't found yet about their chargeback terms for the Bitcoin, but I am expecting it's the same as previous and doesn't matter if it's crypto since the transaction isn't broadcasting on the blockchain. At least I am not gonna hold penny crypto on PayPal.

[gentlemand]

Interesting article. This is exactly what many Paypal users will want to do with their Bitcoin fun tokens. Not as if you can do much else with it anyway. If this is an issue Paypal should be upfront and very loud about limiting personal trading on there. They should have been fully expecting it.

[mrob82]

Interesting article. This is exactly what many Paypal users will want to do with their Bitcoin fun tokens. Not as if you can do much else with it anyway. If this is an issue Paypal should be upfront and very loud about limiting personal trading on there. They should have been fully expecting it.

The sad thing about all of this is that the people (more than likely) that are going to be using Paypal as an exchange will be people that are brand new to the industry.  This is going to lead towards a bad sentiment for BTC overall and it is going to have absolutely nothing to do with BTC, but rather paypal's setup and inadequate policies.  This is just a shit show waiting to happen, I just feel bad for people.  This whole realm is complicated enough without having Paypal or some other company either acting like an exchange or getting into a space they are not prepared to enter.

[libert19]

"PayPal isn’t a crypto exchange, their service is meant for people to hold Bitcoin with and then spend it at their merchants when they turn on that ability,” the Reddit user stated. “If you go and trade constantly they lose a ton of money covering those fees since they’re not charging any fees right now. Their service is supposed to be more like a Bitcoin bank account, not a trading account."

This probably explains their actions, not saying that's it's fair.

[joniboini]

This probably explains their actions, not saying that's it's fair.

I'm still confused about the fee part though. Aren't the trades basically just a change in a database? Why does PayPal need to spend some fees? If anything, they won't get any profits, but I don't think that means a decrease in revenue.

[JeotQ]

Damn  this is pretty bad, at first I never took this serious because it's only on person complaining about PayPal freezing his account, my thoughts was the guy must have done something wrong or even try to cheat the trading platform but now I think this shit is real, honestly what would PayPal gain from doing this? Because they won't get anything but bad reputation, people will surely leave and the whole 'Paypal lists crypto' will turn to joke, anyways that's their cup of tea, we have many top exchanges that works to users interest

[mrob82]

"PayPal isn’t a crypto exchange, their service is meant for people to hold Bitcoin with and then spend it at their merchants when they turn on that ability,” the Reddit user stated. “If you go and trade constantly they lose a ton of money covering those fees since they’re not charging any fees right now. Their service is supposed to be more like a Bitcoin bank account, not a trading account."

This probably explains their actions, not saying that's it's fair.

That's part of the biggest problem.  Anyone that uses paypal as a bank account is asking for trouble.  For example, a friend of mine uses paypal for his comic business.  He sells 12k-30k of comics a week and 95% of his transactions come through paypal.  Two of his nephews decided to buy some comics off of him and they sent the money friends and family.  Paypal "temporarily suspended" his account because the transactions came back to back and they felt like he was trying to navigate around the system.  He explained to them that he has maybe 2 F&F transactions per year and that his business provides paypal x amount (basically 3% of 20K average per month).  They told him to chuck wood and wait for 30-60 days until they could review his account.

Imagine if he had a couple BTC.  BTC spikes or starts to dump, he says oh - I need to sell and re-enter.  Well, tough crap because he's waiting on paypal to do their erroneous review, and when they say 30-60, it might take 90.  There are just so many different ways that this could go wrong.  Now some people are justified at getting their stuff banned or suspended because they are trying to circumvent the system.  People just don't realize it could be a double whammy!