Paxful – P2P Platform Review

UPDATE: Bitcoin Marketplace Paxful shut down amid legal battle between co-founders. CEO Ray Youssef confirmed that a lawsuit filed by a Paxful co-founder is a key reason behind the closure.

Rather than operating as an exchange or traditional centralized trading platform, Paxful brings something very useful and friendly to the DeFi and P2P sector. Their peer-to-peer marketplace is famous for enabling more than 360 different payment options to ensure that nobody is excluded from their service. Paxful has more than five years of successful operations and is widely used in Africa, South America and other emerging markets. Essentially, Paxful, is a peer-to-peer digital asset trading platform for connecting buyers and sellers of cryptocurrency.

Like Amazon, Etsy, and eBay, users are encouraged to be both merchants and buyers, giving them a chance to list their Bitcoin or purchase it from others using some non-traditional methods (like gift cards or sending cash in the post). We will explore some of these 360+ options in the next section.

The positives

Let’s start solely with the payment options available:

• There are now 9 different bank transfer options
• 162 online wallets, like ApplePay, PayPal and Alipay
• 124 different gift cards; simply trade in the value directly for Bitcoin
• 18 cash payment options are available, such as Western Union, MoneyGram, or by going to your bank to make a deposit
• Impressively, 20 different debit and credit cards are accepted, including American Express
• Assets are even tradeable on Paxful, in the form of cars, gold, or game items
• Finally, there are 30 different cryptocurrencies that can be used to purchase BTC on Paxful, which are:
  • Ethereum
  • Litecoin
  • Tether
  • Ripple
  • Tron
  • Bitcoin Cash
  • Bilira
  • Bitcoin Gold
  • Bitgold
  • BitShares
  • BRZ
  • Credits
  • Dogecoin
  • Eos
  • Ethereum Classic
  • IOTA
  • Namecoin
  • Nano
  • NEM
  • NGNT
  • Paxos Standard
  • Peercoin
  • Qtum
  • Ripple
  • Siacoin
  • Steem Coin
  • Stellar Lumens
  • Stratis
  • TrueUSD
  • VeChain
  • Waves Coin
• Paxful has more than 4.5 million registered users, with a top reputation. Whilst they can’t guarantee sellers are honest and respectful, they do encourage users to review sellers to increase transparency and weed out the bad guys
• Paxful is a great platform for African users, as many Africans are unbanked. In 2019, Paxful stated that 45% of its users were based in Africa, so it’s very positive to see a company making it more accessible and democratic for people to get access to Bitcoin. In Nigeria, users can use their BVN code, a biometric ID, to increase their access levels on this platform.

The negatives

• For now, the platform is Bitcoin and USDT only, so users who want to purchase altcoins will have to go elsewhere
• The platform is the host, and the host is only partially responsible for the behaviour or integrity of the sellers or merchants on the platform. Users have to be wary that some people, as is the case in the crypto world, have malevolent ideas and seek to run scams to separate you from your Bitcoin or money
• If you move discussions with a seller away from the platform, Paxful can no longer protect you.

How does it work?

The merchants list their Bitcoins for sale, with the amount, the price, and the payment methods accepted. Buyers then visit the site, choose their payment method of choice, input how much Bitcoin they want to buy, and click ‘search for offers’. It’s very quick and simple. When the results come up, click on the one that you want to proceed with and hit ‘buy’. You’ll then move through the payment process, with the Bitcoin held in escrow so that the seller cannot scam you. If you fail to pay during the required timeframe, the Bitcoin will go back to the owner. 

Some information about fees

Fortunately for buyers on Paxful, the fees are swallowed up by the sellers, to the tune of:

• Bank Transfers: 0.5%
• Credit and Debit Cards: 1%
• Crypto: 1%
• Online Wallets: 1%
• Cash: 1%
• Gift Cards: 3% and 5% for iTunes and Google Play respectively

To avoid fraudulent behaviour, the platform has purchase limits in place:

• Level 1: email and phone verification – limit $1.5K (lifetime)
• Level 2: ID verification + level 1 – limit $10K (lifetime)
• Level 3: Address verification + level 1+2 – limit $10K per trade.
• Level 4: Enhanced due diligence + level 1, 2 and 3 requirements – limits removed

The final say

Paxful gives us reason to smile. The 360+ payment methods might seem overboard at first, but when you realise the mission is to make BTC more accessible around the world as a method of sending value, especially in developing markets, then it becomes more than just a one-stop Bitcoin shop. It’s easy to use too, with a well-designed app and huge potential to become a household name around the world. Sign up on Paxful and join the peer-to-peer revolution.