Established in 2015, Paxful has fast grown into a leading online Bitcoin trading platform connecting buyers and sellers. By offering 330 ways to buy cryptocurrency, it has attracted 165,000 new users alone in the last month. For that reason, the platform’s trade volumes have been swelling consistently, as it comfortably outpaces competitors like LocalBitcoins.
Intrigued by its great trust ratings, we nosedived into the Paxful ecosystem and its market. What you are about to read ahead is a detailed overview of Paxful and its services for 2020.
First things first -- What is Paxful?
Paxful is a simple, fair, and secure platform that acts as a global peer-to-peer (P2P) payment logistics platform. It also facilitates Bitcoin trading with a simple approach, just like eBay. However, founders, Ray Youssef and Artur Schaback spotted an opportunity to deliver trading service as well as social good using Paxful.
Paxful provides instant cryptocurrency buying opportunities using a website or an app. There are two ways that the buyer/seller can connect and execute a trade. One happens to be a highly intuitive website. The other is a widget that allows users to set up a virtual kiosk and earn 2% commissions on all sales through the kiosk. Known as Virtual Kiosk link, the user can place this on the website, app, social media handles, or YouTube channel.
Moreover, Paxful brings the unbanked world an opportunity to connect with crypto trading partners armed with just a smartphone. For spreading the word, Paxful has employed a multi-tier affiliate program. To learn more about Paxful you can view the intro video below!
Currently, Paxful supports only buying and selling Bitcoin. But the platform offers traders 330 payment methods to buy and sell Bitcoin without compromising the security of any transaction.
Paxful vendors accepting such a wide range of payment methods give the users a plethora of options to buy bitcoins. The major categories are:
- Bank transfers -- IMPS, UPI, SWIFT and more
- Online wallets (instant buying) -- PayPal, Skrill, Cash App and more
- Gift cards (instant buying) -- Google Play gift card, Steam Wallet gift card, Amazon gift card and more
- Cash payments- Cash in person, Western Union, MoneyGram and more
- Debit/Credit cards- Any credit/debit card, American Express card and more
- Digital currencies (26)- ETH, LTC, XRP, USDT, BCH
- Goods & assets- Gold
Now, the Paxful site does not hold fiat for any user. So, it enables a direct money transfer facility from the buyer to seller accounts.
Also, it is important to note that different payment methods attract different fees. For example, a non-refundable payment method will attract lower fees. Such payment methods are bank transfer or cash payments. Using credit cards or PayPal attracts higher trade fees as there will be chargeback costs.
Improved crypto trading legitimacy
In the past, traders reported trading scams on a Paxful platform. To avoid disagreements and curb the scams, Paxful has implemented different methods:
It protects the interests of both buyer and seller. When a buyer finds a seller, he needs to wait for the seller to accept the offer. Once the seller accepts the offer, his Bitcoins automatically transfer to an escrow account. Now the Bitcoin stands locked and the trade cannot be canceled.
At this point, the buyers must send the money to the seller’s account. And is this fails to happen within a fixed time-frame, the trade is auto-canceled. However, if the payment to the seller is made in time and is confirmed on Paxful, the Bitcoins move from the escrow to the buyer’s account. In case of any disagreement, the Paxful moderators investigate the trade and take a fair decision. By simply following this methodology, the platform has been able to avoid potential scams.
Live social connections
Paxful users have an opportunity to conduct trade over a live chat. Furthermore, this year it has introduced biometric identification enabling more secured transactions.
With the introduction of a reputation management system, the buyers and sellers can increase their market power. Both buyers and sellers gain pricing power for every successful trade. And Paxful recommends the traders to execute trades with higher reputation buyers/sellers.
During a trade, the seller only pays the escrow fee, usually 1%. Fees like network fees and miners’ fee are only charged for transferring money from Paxful Wallet to an external wallet
Undoubtedly, the platform is pretty intuitive. One can start buying and selling within a few minutes. But for the integrity of the platform, it limits the buying capacity based on verification levels.
Level 1 – Email and phone verification
Buying limit -- $1,500.
Users can open only 2 trades at once with neither trade volume exceeding $500.
Level 2 – Email + phone verification + ID verification
Buying limit -- $10,000
At this level, one needs to create buy offers for Bitcoin. However, it is not essential to make it visible on the website. This level of verification opens the bank transfer payment method.
Level 3 – Email + phone verification + ID verification + address verification
Buying limit-- $10,000
Opens access to methods like bank transfers.
Level 4 – Email + phone verification + ID verification + address verification + enhanced due diligence (EDD and CDD)
Buying limit-- No limits
It is generally suitable for a significantly high volume of institutional or corporate accounts.
Paxful is a US company and must comply with the Office of Foreign Assets Control (“OFAC”) sanctions. According to the sanctions, Paxful cannot be used in the 14 countries listed below:
- Central African Republic Sanctions
- Crimea region
- North Korea
- South Sudan-related Sanctions
- Sudan and Darfur
Moreover, 16 countries have been categorized as OFAC grey or high-risk countries. The traders from these countries are mandatorily required to complete their ID verification before they can start trading on Paxful.
Paxful offers its traders one of the most aggressive customer support systems.
Live chat – It provides a 24*7 chatbox on the website. And when we tried this, the moderator was quick enough to address the issue and resolve it.
Email support – Users can reach out to the Paxful team over email also. We didn’t find many reviews by the traders about this support, and believe it is seldom used.
General queries – firstname.lastname@example.org
To keep the community safe, the users can also report a sketchy offer, a scam, or a problem with a button at the end of the trade page.
Paxful FAQ and Help Center – Detailed FAQs are provided on every possible question about Bitcoin trading on Paxful.
Seller support – The sellers can connect with the buyers over live chat to complete the Bitcoin buying process.
Paxful School – The detailed how-to videos help users understand the buying/selling process and with account verification.
If you own an e-commerce portal and want to accept Bitcoin on your website, Paxful can help you. All you need to do is add a “Pay with Paxful” button. This payment will be directly made from the user’s wallet and will be instant.
It is evident that Paxful is standing up against some P2P giants like LocalBitcoins and thriving. The trade volumes over Paxful are almost half of LocalBitcoins. However, the fact that the trading volume is growing every passing day cannot be ignored.
The availability of 330 payment methods, the potential to curb the scams, and the intuitiveness of the platform make it look potentially promising.
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