Paxful is not exactly a cryptocurrency exchange, but rather a peer-to-peer market for its users and investors. It gained popularity after it helped sex workers accept Bitcoins as payment, when Visa and MasterCard stopped lending services to their back-page. They operate throughout the world, and are frequently compared to LocalBitcoins.com which also acts as a peer-to-peer market place for Bitcoins.
It operates throughout the world apart from the state of New York. The website is global and is not regionally focused but some countries are specifically highlighted on their homepage, namely – USA, India, China, Russia, Nigeria etc. Maybe they have a wider customer base in these places. Paxful is popular for its wide variety of payment options that it provides its users to buy Bitcoins from.
Users do not have to be restricted to using only bank wires or credit or debit cards. They can also utilize mobile wallets like – PayPal, Neteller, Amazon Gift Card, Western Union and 300 more options to purchase crypto-assets, including ‘cash in person’. When you give the users the option to buy Bitcoins using cash, it is like opening a new door to unlimited possibilities. There are, however a lot of risks involved when users try to buy Bitcoin using cash that the website also warns the users about. Hence, in the end it trickles down to the user alone, and becomes his sole responsibility to be careful enough.
Paxful is based in Wilmington, Delaware, in USA. Mohammed Ray Youssef and Artur Schaback are the co-founders of this exchange. It was launched in 2014 under the name ‘EasyBitz’, but soon in 2015, it was changed to Paxful. Paxful is popular for being a peer-to-peer network, as it does not have cryptocurrency on its own system. They invite users who want to buy or sell cryptocurrencies and they just act as middle-men, making the users interact and providing them a platform where they can make a secure deal.
They provide their users an option to purchase Bitcoins using cash, and the users also need not share their identification details. Users have the freedom to be anonymous on Paxful, and deal in Bitcoins without a worry. But being anonymous is an option only for limited payment options. Suppose if you want to make payment using credit card or debit card, you will need to provide your ID and upload details for Paxful executives to verify your account and allow you to buy Bitcoins on their platform.
ADVANTAGES OF PAXFUL
Paxful has many advantages over other exchanges. Being a peer-to-peer network, Paxful has a lot of upsides that makes it a preferable platform for people for many reasons. This Paxful review aims at providing you a transparent, clear and unbiased view of the network –
- Paxful allows people to trade in Bitcoin, by connecting buyers and sellers on their platform. They are not an exchange who store crypto-assets but rather they provide an exchange platform.
- The interface is user-friendly in nature and welcoming for beginners. Anyone who wants to buy crypto-assets using digital payments, can easily make the purchase. You do not need to spend time going around the website and learning about its functioning.
- The most lucrative part of Paxful is that it offers more than 300 payment options for its users. From cash payments, to digital payments users can choose any means to pay for their Bitcoins. They can even use credit cards or debit cards to pay for Bitcoins on Paxful.
- The orders are processed quickly on Paxful. They do not take much time to process orders. Their payment process is seamless. And if you want to make cash deposit to Paxful account too, you can do that easily. Later you just need to upload a receipt after which you will receive your Bitcoins in your wallet.
- Paxful is available worldwide without much problems or compliance issues. Paxful is only banned in the state of New York, but is available in many countries including USA, India, Russia, Nigeria etc.
- Users have the option to activate 2FA (two factor authentication) on their devices to add an extra layer of security. You can also verify your mobile numbers and email ID if you want to.
SOME MORE BENEFITS OF USING PAXFUL
- Another upside of Paxful is that you can meet the local personnel if you want to make a cash payment in exchange for Bitcoins. And you can choose from the most reliable (and highly rated) local people who want to sell Bitcoins.
- Because of being widely available, Paxful has all fiat currencies available on its network. Right from USD (United States Dollars) to INR (Indian Rupees), you can exchange any currency for Bitcoins.
- They do not have any transaction fees. This is what makes Paxful an attractive platform for buyers, as the website only charges 1% from the sellers and has zero fees for buyers. Buyers who will have to pay transaction fees at many other platforms, would rather prefer to buy Bitcoins from Paxful without paying any fees.
- Users are free to register anonymously on Paxful and maintain their anonymity till the end of the deal. No verification documents are required and you do not need to submit any kind of ID if the payment methods you choose, do not require one! However, if you are buying Bitcoins using your debit cards, you might have to verify the bank account first and submit a valid ID too.
- The customer care is supportive and responsive. They have a live-chat option at bottom right corner of the website, where if you type your query, some executive from Paxful will assist you in couple of hours. It is definitely ‘not’ an instant chat option, because many times they might take more than 3 hours to reply. But it is surely better than hunting your query in FAQs for hours.
- Paxful employs an escrow service. Till the payment is clear it does not transfer Bitcoins from seller’s account to buyer’s account. Once the buyer and seller, both confirm that the payment has been successfully done, only then the Bitcoins are released.
DISADVANTAGES OF USING PAXFUL
If there are advantages, there are disadvantages too. To keep the review unbaised and to present a clear picture of their operations and functioning, here are some downsides of Paxful –
- Paxful charges 1% fees from sellers. This prompts them to raise the fees of overall trade in order to bear the cut! Since only sellers are charged, so it is natural that the price of Bitcoin will always be higher than other exchanges.
- Paxful can be dangerous because of anonymity involved and in-person trades. You never know the kind of person sitting on the other side of the screen, selling you Bitcoins in your hometown is trustworthy or not. Paxful does not ‘guarantee’ that all their users are trustworthy, especially in the deals that happen outside the website. That is why users need to be careful while making in-person cash payments. The online forums and reviews are full of information about scams and accusations against Paxful.
- Paxful does not provide any other cryptocurrency apart from Bitcoin. If the users are looking to diversify their cryptocurrency portfolio, they should look elsewhere. Because on Paxful they will find only Bitcoin.
- Paxful is not for traders. Being a peer-to-peer exchange network, it is only for buyers and sellers. It is not for leverage or margin traders who want to trade in crypto-assets. Neither does it have complex graphs and charts showcased on their website with live-running information of crypto-market.
- Paxful is not praised on many online forums and platforms. In many discussion panels, users have accused Paxful of being a fraud or scam, because they lost their money/crypto-assets on it. Such reviews usually demotivate other users from making a trade on the website.
REACH AND REGULATIONS
Paxful is available across the globe, without much restrictions or problems. It is only banned in the state of New York, rest it is available in all of the USA, and many other countries including – India, Russia, Nigeria, China etc. It has no compliance issues or issues relating to its performance anywhere. They motivate their users to employ 2FA (two factor authentication) to their accounts, and they have always asked their users to be careful. Since it is not an exchange, so they cannot take complete guarantee of completion of an order, as the completion depends upon two parties. They only act as an intermediary, whose job is to connect two parties on their platform.
Being a popular platform, Paxful has quite a strong influence on market. As per the data extracted from similarweb.com, Paxful has gathered more than 17 million views in last 3 months, which is a big number. However, if it is compared to its biggest competitor, which is localbitcoins.com, it has less than half of the views. Localbitcoins.com gathered almost 42.4 million views in last three months.
Coming to geographical preferences, Paxful has gathered highest users from USA (27.9%). After USA, if there is a country that visits Paxful the most, it is Nigeria standing at second position with 7.6%. These two countries are followed by India (4.2%), United Kingdom (3.2%) and lastly Germany (3%).
SIGNING UP ON PAXFUL
Signing up on Paxful is easy and a task of minutes for new users. Anyone can easily register, and you can even register even anonymously. They give you freedom of keeping your identity concealed, and they do not ask you to verify any ID either. Signing up is simple, and the security features are also good on Paxful. They have the option of 2FA (two factor authentication), available for users. They also give regular warnings to users from time to time. They ask users to be careful while dealing fiat currency in cash, for Bitcoins outside the network.
CRYPTOCURRENCIES ON PAXFUL
The biggest downside of Paxful is that it only supports Bitcoin as of now. No other crypto-asset is available for trading on this platform, and diversifying crypto-portfolio might be impossible for users on Paxful. They will need to create accounts on exchanges that provide alt-coins, ICOs and other crypto-assets.
FEES STRUCTURE OF PAXFUL
Paxful is famous for its low fees. Paxful fees is a lucrative asset for users, as it does not charge anything from buyers. If you are a trade-maker and you want to buy Bitcoins, Paxful might be perfect, because not only do they provide more than 300 payment options to their users, but they also offer them the benefit of zero transaction fees. They do charge from sellers for complete trade. They charge 1% from sellers, which prompts them to include the fees in the price itself. Hence, the price of Bitcoin on Paxful might be higher than other exchanges, but then it is the only platform that provides you the freedom of exchanging cash with Bitcoins.
Paxful provides a good customer support, as they also give a widget for chat, where you can drop your messages and queries. Apart from their in-depth and detailed FAQ section, they provide support through chat and email as well. Some users claimed that they are slow, but almost every user has agreed that they received a response. It might be late, but it was there. The only thing that they need to improve is the speed on which their customer support functions.
The only option for Paxful users, as an alternate is localbitcoins.com, because apart from all the available cryptocurrency exchanges, the only peer-to-peer network is localbitcoins.com. One benefit of using localbitcoins.com is that you will find a higher volume of users, because it is older than Paxful, and you can trade Bitcoins from users who have been selling or buying Bitcoins since almost 2012, while Paxful began its operations in 2015. Paxful has lower fees than localbitcoins.com, as they charge flat 1% fees from sellers, but localbitcoins.com has hidden charges. They charge 0.5% on the trade, apart from that they also charge network fees which is not mentioned clearly on their website.
Paxful is a good platform overall, and certainly a new platform when it comes to peer-to-peer networks. Localbitcoins.com has a trust factor among users. Users can verify the sellers/buyers by the rating they receive o their profile. While with Paxful, the functioning is almost same, but the profiles are not much older. It also becomes a disadvantage for new-users, because the trust-factor associated with new profiles is lower than those who have been trading/dealing in Bitcoins since years now. Paxful has a bright future ahead, because apart from Paxful, there is only localbitcoins.com that provides peer-to-peer networking to users.
For other exchanges, see our list here.