Why Can’t I Buy Crypto on PayPal: Common Blockers

Published: 13th June, 2024 | Last Updated: 13th June, 2024

Markos Koemtzopoulos

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

This article will describe possible reasons you cannot buy crypto on PayPal. Common blockers are regional restrictions, account verification problems, limited funds, technical glitches, or a limited range of crypto assets that PayPal supports. This article covers these blockers and provides solutions to help you get started.

This article is part of my series on how to buy crypto.

Common Issues Preventing Crypto Purchases on PayPal

Illustration of a person trying to buy cryptocurrency on a computer with a puzzled expression

Here are some common reasons why you could be prevented from buying crypto on PayPal:

  • Before buying crypto, you must have a verified PayPal account. PayPal users must undergo identity verification and KYC compliance.
  • PayPal only accepts U.S. customers. You can only buy crypto in the United States, excluding Hawaii.
  • Insufficient funds.
  • There is a technical error, and you need to clear your cookies.
  • PayPal only allows you to buy Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and PayPal USD. You can’t buy any other coins.
  • You exceeded the maximum amount that you are allowed to buy. PayPal has limits on daily and weekly cryptocurrency purchases.
  • You are using a business account. You can only buy crypto using a personal PayPal account.

1. Account Verification Problems

Person holding a passport and a utility bill for account verification

Before buying crypto on PayPal, you must verify your account. This step is crucial to accessing the Cryptocurrencies Hub, where you can find assets like Bitcoin and Ethereum.

If you don’t complete the verification, you won’t be able to buy or sell crypto.

Your PayPal identity is built on four pillars, all of which can be found on your PayPal page:

  1. Your name, email address, and phone number
  2. Your physical address
  3. Your date of birth
  4. Your taxpayer identification number

Failing to verify these can leave your account stranded and unable to participate in the bustling digital currency market.

KYC Verification Requirements

The Know Your Customer (KYC) protocol isn’t just a formality; it’s a vital part of ensuring compliance with regulations. To comply with anti-money laundering and measures against terrorist financing, PayPal users must undergo a detailed identity verification process.

To validate your identity, you must present a government-issued photo I.D. and evidence of residency, such as a utility bill.

The easiest way to verify your identity is to use PayPal’s mobile app.

Address Proof Issues

To avoid issues with your address getting approved, ensure your documents are as straightforward as possible and that the details match your account information exactly. This will help confirm your address in PayPal’s records.

2. Regional Restrictions and Regulations

Illustration of a world map with some regions highlighted and restricted

PayPal’s cryptocurrency services are only available to U.S. customers.

These regional restrictions are due to different local laws and global regulations that affect the market.

If you are in Hawaii or outside the U.S., you won’t be able to use PayPal’s crypto services.

Update: at the time of writing, PayPal is allowing residents in select European countries to buy crypto. They have started with Luxemburg, and it remains to be seen which other countries they will support.

Is PayPal crypto available in the U.K.?

At the time of writing, PayPal has issued a notice on its website that cryptocurrency transactions in the United Kingdom are on hold while ensuring they comply with new U.K. regulations by the Financial Conduct Authority (FCA).

3. Insufficient Funds in PayPal Balance or Linked Accounts

If your PayPal balance or linked accounts don’t have enough money, you won’t be able to buy crypto. Ensure you have enough funds in your PayPal or linked bank accounts to avoid issues.

Checking PayPal Balance

Before buying crypto, check your PayPal balance. Look at your dashboard’s ‘Balance Account’ or ‘Finances’ section to see how much money you have. Ensuring you have enough funds can help you avoid transaction failures and ensure a smooth process.

Linking Bank Accounts and Cards

A backup in a linked bank account or card is handy. If your PayPal balance is low, these linked accounts can provide the necessary funds to complete the transaction.

To add these accounts, follow these steps:

  1. Go to the Wallet section of PayPal.
  2. Select the option to link a new funding source. Make sure you select an approved payment method.
  3. With this setup, you’ll be ready to buy crypto without worrying about insufficient funds.

4. Technical Glitches and App Issues

Even the best systems can encounter unexpected problems, and the PayPal app is no different. Users might experience issues like app freezes, unexpected crashes, or confusing error messages during a transaction.

These problems can stop you from successfully buying crypto. Technical issues can also affect the transfer of crypto assets.

Common Technical Errors

Among the common technical errors, the ‘we’re unable to complete this transaction’ message is a frequent problem that can stop you from buying crypto.

This issue is often caused by the buildup of cache and cookies in your browser, which can slow down your progress. Clearing these may help resolve the problem.

If this fails, try contacting customer service. Make sure you check their homepage or your notifications for any messages about maintenance.

5. Limited Crypto Asset Options on PayPal

PayPal only allows you to buy the following crypto asset

  1. Bitcoin
  2. Bitcoin Cash
  3. Litecoin
  4. Ethereum
  5. PYUSD

If you are trying to buy another cryptocurrency, you won’t be able to.

6. Transaction Limits and Security Measures

Knowing the transaction limits and security measures is essential when dealing with crypto on PayPal. These rules help keep your transactions safe and ensure that PayPal follows regulations. Although these limits may seem restrictive, they protect users from fraud and other financial issues.

Daily and Monthly Limits

When using PayPal’s crypto services, be aware of the daily and monthly limits that apply to your transactions. These limits depend on your verification status and your account type. For instance, in the U.S., the U.S. can buy up to $100,000 worth of cryptocurrency weekly.

These limits reset every Friday.

Security Protocols

In rare instances, PayPal may freeze transactions if instructed to by the Securities Exchange Commission or OFAC. If you are on that list, this could be a reason.

7. You are using a business account.

You can only buy crypto using a personal account. Business accounts on PayPal are designed for commercial transactions and do not support cryptocurrency purchases. To buy crypto, you must switch to an individual account.

To do this, log in to your PayPal account, navigate to the settings, and change your account type from business to personal.

Remember that personal accounts are intended for individual use and provide access to PayPal’s cryptocurrency services, including buying, selling, and holding digital assets like Bitcoin and Ethereum.

Alternatives to Buying Crypto on PayPal

Illustration of a person purchasing Bitcoin with PayPal

Using a crypto exchange is better for those who find PayPal’s cryptocurrency options limited and want to avoid its higher fees.

Crypto exchanges are platforms where many digital currencies can be bought and sold. These alternatives offer more freedom and control, allowing you to explore a broader range of cryptocurrencies with the potential for higher returns.

Popular crypto exchanges are

  • Kraken
  • Coinbase
  • Binance
  • Crypto.com

Be aware that PayPal charges very high transaction fees for crypto purchases. Purchasing crypto can cost as much as 1.8%, while sending crypto assets to a different wallet address costs 1%. These fees are exorbitant.

Large cryptocurrency exchanges charge less than 1% on crypto transactions and don’t charge any fees for sending crypto to a digital wallet. The only thing you need to concern yourself with is the network fees paid to the blockchain, which you will need to pay regardless of the platform you use.

When using other platforms, providing the correct wallet address is crucial to ensure the safe transfer of your Crypto Assets.

If you don’t want to use a crypto exchange, you can use a crypto platform such as Robinhood or eToro. These brokerages allow you to invest in crypto assets, stocks, and ETFs. The fees are also way cheaper than those charged on PayPal.

Also, know that many crypto exchanges accept PayPal as a deposit method.

Frequently Asked Questions

Why can’t I purchase cryptocurrencies with PayPal outside the United States?

Due to regional regulations and compliance with local laws, you cannot purchase cryptocurrencies with PayPal outside the United States. This restriction also applies to users in Hawaii.

What should I do if my identity verification on PayPal fails?

If your identity verification on PayPal fails, submit a clear and valid government-issued photo I.D. doI.D.ments and ensure their accuracy. If the issue persists, contact PayPal support for further assistance.

Can I use a credit card to buy crypto on PayPal?

You cannot use a credit card to buy crypto on PayPal, as they do not currently allow this option. Instead, you can use your PayPal balance or link a bank account or debit card.

Are there any transaction limits for buying crypto on PayPal?

Yes, PayPal has transaction limits for buying cryptocurrencies to ensure security and regulatory compliance. Through their Cryptocurrencies Hub, PayPal supports various crypto assets users can buy, sell, and hold. A maximum of USD 100,000 is allowed for weekly purchases in the U.S. U.S. limits aim to safeguard users and transaction integrity.

What are the alternatives for purchasing cryptocurrencies that PayPal does not support?

Consider using dedicated crypto exchanges like Coinbase or other payment methods like credit/debit cards, bank transfers, or peer-to-peer platforms. These options offer access to a broader range of digital assets that PayPal does not support.

Can you put crypto in PayPal?

Yes, you can store crypto on PayPal. You can buy crypto directly from PayPal or send crypto to a PayPal wallet address. However, PayPal is a custodial wallet, meaning you can’t access your private key. If they get hacked, you won’t be able to recover your crypto. For this reason, it is better to send your digital to an external crypto wallet.

Is PayPal good for trading crypto?

PayPal offers convenience if you can’t bother downloading and registering with a crypto exchange. However, the fees are much higher than what you would pay on a crypto exchange.

Why can’t I send crypto on PayPal?

Ensure you have a positive balance and that 72 hours have elapsed since you deposited.

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

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