Buying bitcoin entails exchanging local fiat currency for this digital payment currency. For that reason, exchanges that allow you access to various methods of buying BTC will also indicate different payment methods.
This is important
One important piece of information you need to have is that authorities are getting very tough on Know-Your-Client (KYC) and Anti-Money Laundering (AML) regulations. As a result, most of the sites that provide bitcoin buying services have put in place measures to ensure you verify the authenticity of your account details. As such, you will be asked to provide details like a valid photo of yourself, a valid ID/DL, and sometimes utility bills as proof of residence/address.
The most common payment methods include credit or debit cards, bank wire transfers or bank accounts, and cash. There are a few sites that allow you to buy bitcoin with PayPal.
Here’s is a brief overview of the above payment methods suitable for buying Bitcoin.
1. Credit or Debit Card
Credit/debit cards offer one of the most common methods of payment when it comes to buying Bitcoin at exchange sites. It is popular because the use of credit or debit cards happens to be common among online shoppers. Buying bitcoin with Credit or Debit card requires that you fund the card and you are good to go.
What are the pros of buying bitcoin with a credit/debit card?
Credit card/debit card is easy and familiar as it is widely used in online shopping.
You can get instant bitcoin buy if you have verified the card.
What are the cons of buying bitcoin with a credit/debit card?
Buying bitcoin with credit or debit cards attract high fees compared to other payment methods.
It doesn’t guarantee your privacy and anonymity due to the requirement that you must verify your account using an ID.
There are many sites that accept Credit/debit card as payment methods when you want to buy bitcoin. The best thing is to check out the sites and compare fees before committing to buy bitcoin.
Some of the well-known sites include the popular US-based Coinbase, Bitfinex, Coinmama, CEX.IO, and BitPanda.
2. Bank Account /Bank Transfer
The use of bank transfer as a payment method for buying bitcoin is one of the most common and widely used methods globally. Many buyers have bank accounts and, therefore, find it easy to transfer funds to their online accounts for the purpose of purchasing bitcoin.
What are the pros of buying bitcoins using a bank account/transfer?
Offers higher buying limits on most exchanges around the world.
It is slightly cheaper compared to credit/debit card. If your bank doesn’t charge high fees, then you will likely incur less on the purchase.
What are the cons of buying bitcoins using your bank account/transfer?
Less privacy and anonymity due to the requirements of ID verification.
It is usually very slow; bank transfers in some countries can take as many as 5 days to reflect in your online account.
Just like I pointed out with the use of credit/debit card, some of the best sites that allow you to buy bitcoin with a bank account or bank transfers include Coinbase, LocaBitcoins, BitPanda, Paxful, Virwox, and Gemini.
3. Buy Bitcoin with PayPal
Buying bitcoin with PayPal is not as easy and straightforward as it may sound. In fact, there’s no way you could exchange your PayPal funds directly with Bitcoin. It is easier and cheaper to buy bitcoin with a bank account or bank transfer than with PayPal. The main reason why PayPal isn’t a popular option is due to the issue of chargebacks. Bitcoin transactions are irreversible, but PayPal is. So, merchants (including exchanges) are a little reluctant to accept this method of buying bitcoin.
However, this doesn’t mean that it is 100% impossible to purchase Bitcoin with PayPal. The process is quite demanding, but it can be done. Sites like Virwox provide a way for you to get bitcoin using funds from your PayPal account. On Virwox, buy Second Life Lindens which you can then use to buy bitcoin. Read this guide to find out you can buy bitcoin with PayPal.
4. Buy Bitcoin with Cash
If you are looking for the fastest and often most private method of acquiring bitcoin, then go for cash deposits. Sites that offer instant bitcoin buying usually prefer cash deposits. With this method, you can buy and access your bitcoin, all within an hour. It usually does not require verification.
What are the pros of buying bitcoin with cash?
Cash deposits offer more privacy because most transactions do not require the buyer to provide personal information
Buying bitcoin with Cash allows for instant buying
What are the cons of buying bitcoin with cash?
Fees charged can rise up to 15% depending on the site. Most sites set a fee of between 5-10%, which is still high.
Chances of fraudulent transactions are very high; you will need to be extra careful with whoever you deal with on the exchange.
If you are looking for the best sites that offer you a chance to buy bitcoin with cash, then consider the following reputable platforms: localBitcoins, Paxful, BitQuick, and Wall of Coins.
5. Bitcoin ATMs
Bitcoin ATMs work more like normal automated teller machines; the only difference being you may not withdraw bitcoin from the machine. There are several Bitcoin ATMs located in major cities and suburban areas in over 50 countries around the world. You can buy BTC with cash at a Bitcoin ATM.
To access a bitcoin ATM in your location, use Coin ATM Radar.
What are the pros of Bitcoin ATMs?
Provides some degree of privacy and anonymity.
It’s a convenient way to get bitcoin without much struggle.
What are the cons of Bitcoin ATMs?
High fees; up to 15% above normal rates in the market.
There are several different payment methods of buying bitcoin around the world. As an individual, it is for you to decide which method suits you. Remember you can also buy bitcoin using international wire transfer, gift cards and an assortment of other online payment systems like Neteller and OkPay. Lastly, once you have bought your bitcoin, keep it away from online wallets that are prone to hacking.
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