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.
Source: Reddit
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Why do you say you can’t sell digital goods and services through PayPal. Me and a gazillion other digital product vendors sell digital products and accept PayPal. Look at click bank and jvzoo, both huge digital product vendors using PayPal. The thing is they should be accepting bitcoin
It is safer if it a Business doing it, but it is VERY unsafe to do it with individuals. Scamming PP to BTC is crazy easy. the person with the BTC will take on all the risk. Best practice is to do in person trades in cash or use vetted service with bank transfers.
not sure what what you mean by business is very unsafe to do it with individuals. I do plenty of business on craigslist with no 3rd party, direct with individuals and its never been unsafe. Using all forms of payment: cash, bitcoin, paypal, chase quickpay. I’d prefer cash or bitcoin, no 3rd party and no fees
Just saying people need to know they should take steps to make it a safe transaction, like getting the persons info, meeting in person, etc. I assume you do that. but some people just do realize that it is easy to reverse PP transactions and use that to scam people.
ok, so your concern is that you that paypal and btc won’t work because paypal reverses charges and btc has no reversal. this is true, however, they can use something like ripple with a distributed ledger. Also, once they have a pool of btc in their paypal money market funds they will move it around however they want. And people will get scammed just like with paypal. the thing is paypal is a 3rd party source – the seller doesn’t know, nor care how you paid through paypal – btc, cc, bank, etc… they just know paypal – so if you deposit $500 btc into your paypal, its in paypal and used like paypal, not like btc… one reason why 3rd parties and btc is just stupid – I only want paypal to figure it out so btc goes sky high – I would never deposit my btc to paypal to fund my account or pay for anything! it’s a joke if you know how btc actually works – however, guys who got in early and have hundreds or thousands of btc, wouldn’t mind depositing it to their pp account and spending it normally… just my thoughts 🙂
ya. I use a exchange to move funds in and out of BTC. and use BTC with its own eco system.
good thats the way to do it 🙂
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