For some reason, plenty of people are still looking for a way to convert Bitcoin to and from PayPal. This is a clear example as to how some people don’t get the concept of Bitcoin to begin with, as digital currency is non-refundable, whereas PayPal is subject to fraud and chargebacks. Plus, PayPal’s Terms of Service does not cover the sale of digital goods, which is – technically speaking – illegal.
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Bitcoin To PayPal Is A Big No-no
In a way, it makes sense for consumers to convert Bitcoin to and from convenient online payment methods, such as PayPal. The reason for this demand is simple: far more merchants and retailers accept PayPal payments, whereas Bitcoin adoption is still in its very early stages.
However, it is important to note that PayPal and Bitcoin operate on two entirely different protocols. PayPal, while very convenient, uses traditional payment methods to let consumers send money all over the world by just using an email address. Bitcoin, on the other hand, does not use credit cards or bank accounts to move money around the world, as Bitcoin is its own currency.
Third-party services providers such as PayPal are in a completely different league compared to Bitcoin. In fact, Bitcoin and PayPal can’t even be compared to one another, as they are vastly different in nearly every aspect. As a result, converting one to the other can be a pain in the rear as there is a good reason for that.
The Risk of Chargebacks And Fraud
Plenty of users have been converting Bitcoin to PayPal funds in the past, and nearly every single transaction has lead to a chargeback by the PayPal, account owner. This is what happens when using credit cards or bank accounts, combined with a third-party service that does not offer any seller protection on digital items.
Whenever somebody issues a PayPal chargeback after buying Bitcoin, they will be given the money back within a certain period of time. As a Bitcoin seller, this puts one in a very awkward position, as they have lost the BTC – which are non-refundable – as well as that fiat currency due to the chargeback. Hence, hardly anyone wants to use PayPal in conjunction with Bitcoin, for obvious reasons.
That being said, there are some options to convert Bitcoin to PayPal, if that is the only option for you. BitWala recently launched a service to convert BTC to PP funds, although they will take a small cut for doing so. Additionally, there is the option of using LocalBitcoins to find PayPal buyers, but the same risks regarding fraud and chargebacks still apply there.
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