Payment Methods

Which is the best payment method to get bitcoins?

There are so many different payment options when purchasing bitcoin. To keep things simple, I will compare the most used methods: Credit Card, Bank Transfer, Cash, and PayPal. To get a quick glance at the advantages/disadvantages of each look over the following table. More detailed information is available below.

Payment Method

Average Fees

Anonymity

Speed to Purchase

Overall Difficulty

Credit Card

High

Not great

Very fast

Easy

Bank Transfer (SEPA/wire)

Very low

Not great

Slow

Easy/Medium

PayPal

Very high

Good

Fast

Medium

Cash

Low

Excellent

Slow

Medium

Work for it

No fees

Good

Slow

Hard

Bank Transfer vs Credit Card

For buying large amounts of bitcoin, you should choose to buy with a bank transfer on a reputable exchange. Fees are always lowest when you choose to transfer funds directly via SEPA (Europe) or Wire (US). Alternatively credit card purchases will provide you with bitcoins in a much faster time span. This is because deposits are verified instantly so the exchange can immediately release the cryptocurrency to you. The downside is that credit card transactions entail larger fees, which make it inconvenient for getting many bitcoins.

PayPal vs Credit Card

What makes people want to transfer PayPal to bitcoin and vice versa? The simple fact that it’s instant and quite convenient. It also allows people to use their favorite payment processor. Most importantly, using PayPal is great for small amounts. However, it’s far cheaper to use other payment methods (credit card, bank transfer) for larger transactions. Credit card purchases are the simplest way. Fees are high, but generally not as high as when buying with PayPal.

Cash (in-person) vs Buying Online

There are two accepted ways to buy bitcoin with cash:

  1. Using a Bitcoin ATM – you put cash in, it sends bitcoins to your specified address
  2. Meeting a person and swapping your cash for their bitcoins

Generally speaking, buying bitcoins with cash will guarantee the highest levels of anonymity. Fees are higher than buying by bank transfer, but at least you will keep your ID secret and no one has to know who you are. Some people choose cash because they prefer to stay private. However, large transactions become quite inconvenient (and dangerous/risky) when using cash. Another downside is that you usually have to go to physical location to meet someone, rather than just being able to do it all online. Please note that not all bitcoin ATMs are anonymous. Some do require ID submission.

Why so much identity verification… and which sites don’t require this?

Yes, I know this identity verification craze really sucks! Back in 2013 I don’t remember any sites asking for my passport copies and photos of home electricity bills. Now in 2017 virtually every bitcoin exchange is obliged by law to do full KYC (know your customer). This is to prevent cyber-crime and money laundering… and some say the government worries that you might be gaining too much economic freedom.

Just realize that this is the new age where your ID is scattered all over the internet. For this reason I would recommend choosing the safest sites only. If you really need to stay anonymous when buying, this is possible but the cost per bitcoin will be significantly higher.

Here are the best places to get bitcoin without having to submit ID:

  • Use the LocalBitcoins site (although some sellers now require a copy of your ID) to buy with cash or bank transfer (less anonymous than cash).
  • The Buysomebitcoins site lets you buy with no ID verification using a Visa/Mastercard. Commissions are lowered if you submit ID.
  • Using WeSellCrypto will allow you to buy small amounts (~15 usd) with PayPal as they don’t bother checking your ID unless you do larger transactions.
  • Find a Bitcoin ATM near you on this World Map. Some ATMs do require ID.
  • Advanced users only: use Bitsquare (a decentralized bitcoin exchange) to trade with others relatively anonymously.

What characteristics qualify a good bitcoin exchange?

Commissions & Fees

No one likes to get over-charged. Paying the cheapest fees is always important. Some exchanges are very transparent about how much you will pay to deposit, buy, sell, store, and withdraw. However, other places are more discreet about how they extract fees from your hard earned money. Most sites make their revenue by having a small margin on the buy/sell rate. Do look into this before you deposit money anywhere.

Payment Methods

I’m yet to find a site that accepts all four of the most-used payment methods:

  • Bank transfer
  • Credit card (Visa, Mastercard, AmEx)
  • PayPal
  • Cash

Most places will accept either one or two. Do check out the reviews of each site below for more information.

Ease of Use

It is really important to start off simple. Don’t try use a decentralized exchange like Bitsquare if this is your first day on bitcoin. Choose a site which accommodates beginners. There are a couple of good choices listed below. Some of the best sites are actually very easy to use, but also offer more advanced features for experts.

Security

If you are new to bitcoin, you may have heard mainstream media reports about how “bitcoin was hacked” or something similar. Thankfully you have gotten this far & ignored the prophecies of incompetent journalists. What actually happens is that bitcoin exchanges do themselves get hacked. This has nothing to do with bitcoin the protocol – which remains incredibly secure and has never been compromised since its creation.

Some indicators that an exchange is following security best practices are:

  • they provide proof of coins in cold storage.
  • the exchange offers and encourages customers to use two-factor authentication
  • the operators resist and reason with regulator demands on how the exchange should be run.

Some indicators that an exchange may have been compromised are

  • a long & persistent backlog of bitcoin withdrawls (users waiting days to receive withdrawls)
  • an increasingly large difference in the quoted price of bitcoin compared to other exchanges
  • media allegations of theft. Coindesk is a reputable source for bitcoin news.
  • silence from operators who may stop responding to community questions/allegations

Rest assured, most people simply withdraw their coins to an offline wallet once purchased. That way you no longer need to worry about how safe the exchange is, because you now have sole control over the private keys.

Customer Service

It’s good to research each site’s customer service records before depositing. Some places are really fast to respond to customer queries, while others may take days to get back to you. Keep in mind that you will necessarily be interacting with support at some stage as most sites now require ID vetting. This stage usually involves several emails, so it’s important that the site has employed enough agents to respond to users in time.

As exchanges get more sophisticated and secure, some have developed account-flagging systems which may temporarily freeze users’ funds. Flags can be set off for a variety of reasons, but usually get sorted once you reach out to a customer support representative.

Community interaction

This aspect should be given more weight. After all, the bitcoin community is a thriving eco-system. Exchanges don’t exist in a void, and those that are reaping all reward without giving something back really don’t deserve your custom. Good examples of community interaction include:

  • participating & solving queries on bitcoin forums, notably the /r/bitcoin sub-Reddit. Localbitcoins & CEX are very active in this area.
  • contributing to bitcoin-events, hackathons, and sponsoring cryptocurrency education initiatives. Coinbase had a cool bitcoin app competition/hackathon last year.
  • being as open-source as possible. Sharing and taking innovation from the community. Poloniex, the largest cryptocurrency exchange, has a lot of open-sourced front-end code & a great API (a public interface for programmers to build their own apps on top).
  • remaining positive & professional. Bitcoin has a lot of scandal, emotion, & controversy. Those that refrain from slander get my appraisal. US-based exchange Gemini has played their cards right by staying neutral throughout the block-size debate (an extended disagreement within the community over how the bitcoin code should evolve).

Quick comparison of the best places to get bitcoin

Below is a table that summarizes the best places to buy bitcoin. Special emphasis has been put on clearly indicating available payment methods, fees, ease-of-use, and reputation. Some sites have multiple ways to deposit money (i usually prefer these), while others focus on one. Reputation is a overall view of feedback I have read about each site. Be sure to research reviews yourself too. The fee column gives a very brief idea of how high commissions and hidden costs are on each exchange. This should help you in making a decision about with site to use.

Where to Buy and Sell Bitcoin

Best Web Sites to Buy Bitcoin and Cryptocurrency

RankWebsiteLocation and CurrencyEase of UseSecurityBuying OptionsFees
1etoroLondon, UK
USD
MediumExcellentDeposit Fees: Yes
Withdrawal Fees: Yes
Trading Fees: variable
2S.F., USA
USD, EUR, GBP
EasyExcellentCredit Card, Debit Card, Bank TransferDeposit Fees: Yes
Withdrawal Fees: Yes
Trading Fees: 1% fixed
3Limassol,
Cyprus

USD, EUR
EasyExcellent
4Las Vegas, USA
180+ crypto pairs
AdvancedGood
5Local
all currencies
EasyExcellent
6London, UK
USD, EUR, GBP, RUB
MediumGood
7S.F.,
USA

USD, EUR, CAD, JPY
AdvancedExcellentBank Transfer, CryptocurrencyDeposit Fees: Yes
Withdrawal Fees: Yes
Trading Fees:0.0 - 0.26%
8Luxembourg
USD, EUR
EasyGoodCredit Card, Bank TransferDeposit Fees: No
Withdrawal Fees: Yes
Trading Fees:0.1 - 0.25%
9Hong-Kong
USD
MediumGoodBank Transfer plus various cryptocurrenciesDeposit Fees: No
Withdrawal Fees: Yes
Trading Fees:Variable
10Delaware, USA
USD
MediumGoodPayPAl, Debit Card, Amazon Gift
11
12
13
14
15
16
17
18
19

Exchange

About

Based

 

Coinbase operates one of the most popular wallets and is an simple way to buy bitcoin. $10 bonus on sign up.

USA

BUY BITCOIN

 

Localbitcoins matches buyers and sellers online and in-person, locally worldwide.

Local to Your Location

BUY BITCOIN

 

Cex.io claims to be one of the fastest ways you can buy bitcoin.

USA

BUY BITCOIN

 

Coinmama allow purchases with credit and debit cards for verified users.

Israel

BUY BITCOIN

 

Paxful enables you to buy from paypal, and you can use Amazon gift cards too.

USA

BUY BITCOIN

 

Bitit.io you can Bitcoin in 50 countries, with a credit card or cash.

France

BUY BITCOIN

Site

PayPal

Credit

Card

Bank

Transfer

Cash

Reputation

Fees

Site

PayPal

Credit

Card

Bank

Transfer

Cash

Reputation

Fees

Coinbase

No

Yes

Yes

No

Excellent

Average

Localbitcoins

Yes

No

Yes

Yes

Good

Average

Bitstamp

No

Yes

Yes

No

Okay

Average

Kraken

No

No

Yes

No

Excellent

Good

Cex

No

Yes

Yes

No

Good

Good

Bitcoin.de

No

No

Yes

No

Okay

Good

Coinatmradar

No

No

No

Yes

n/a

High

Xcoins

Yes

Yes

No

No

Okay

High

Wesellcrypto

Yes

No

No

No

Okay

High

Paxful

Yes

Yes

No

Yes

Okay

High

Coinmama

No

Yes

No

Yes

Okay

High

Good sites to get bitcoin with a credit card

The first thing to consider before asking where to get btc with a credit card, is that this service has only existed very recently. People find it quite incredible – why did no one offer card deposits before? Simply because credit card transactions were partially reversible by the bank. So these exchanges had to first gain lots of trust and goodwill before banks would allow them to operate over the SWIFT network. Using a card to buy btc means confirmation waiting time has been significantly reduced.

The following list of sites accept credit cards:

Coinbase.com

Visit Website

Coinbase really is a great site for multiple reasons, but most importantly because it’s intuitive. The user interface is so appealing and simple to use. Coinbase is also one of the most secure exchanges site and has over 18 million happy users per month. Card purchases are real simple and fees remain very competitive. The best part is that all user wallets are insured. Expert users can even activate a super-advanced & secure mutli-signature wallet. This guarantees that in the event Coinbase were to go offline then these users could still move their coins.

While you may wish for a no verification process, like all exchanges Coinbase do require ID submission before you can finalize an order. Should you want to trade like a professional: use GDAX for larger volume transactions and cheaper fees. Where are they located? Based out of San Francisco, they allow you to buy with USD, Euros, GBP. Be sure to read up their information page which will help you get started.

Cex.io

Visit Website

CEX is an integral part of my guide, because they offer a diverse range of services.  They have a worldwide coverage, multiple payment options, and 24/7 support are accompanied by time-proven platform stability that guarantees safety of assets and data. They now have over 500 000 users and accept Euro, US Dollar, and Russian Ruble. Wire transfer and SEPA payments are also accepted. CEX have a Level 2 PCI DSS data security clearance meaning that this site is extremely trustworthy with users data and money.

Coinmama.com

Visit Website

Coinmama is rapidly gaining popularity as the best place to buy btc online. With its well-acclaimed acceptance of Mastercard & VISA, Coinmama has attracted quite a large user base among those asking how to get bitcoins with a debit card, or credit card. The sign-up process is easy and once validated you will be able to purchase immediately. Withdrawing is just as fast. The ease of use here makes it an excellent choice.

Best places to get bitcoins with PayPal.

Localbitcoins.com

Visit Website

Localbitcoins have recently added the option for buyers and sellers to exchange bitcoins for PayPal. I think this is a pretty sweet feature. Due to the fear of reversible transactions and charge-backs, not many sites offer the use of this payment processor.

Most Localbitcoin sellers will allow purchases ranging between 10 usd to 1500 usd in PayPal. The big downside is that they require you to have community reputation (previous purchase history). Sellers do this in-order to minimize the risk that bad-actors reverse the PayPal transaction while keeping the bitcoins.

Paxful.com

Visit Website

Paxful is located in Delaware, USA. This site is obligatory in any tutorial on how to invest bitcoin, simply because they offer a really wide range of features. Not only can you go from paypal to bitcoin on Paxful, but you can also use Amazon gift cards too (and others such as OneVanilla, Walmart, Bestbuy, and Gamestop). Google Wallet is also accepted by vendors here.

You will find that it is all about finding a vendor that is ready to trade with you. Yes, it is true that other sites offer an easier process, but where else can you exchange virtually anything for the most popular cryptocurrency in existence? Check out Paxful’s instructions and read up the FAQ. I do prefer LocalBitcoins to Paxful – especially so now that the former accepts PayPal.

Wesellcrypto.com

Wesellcrypto used to be a popular platform for buying Dogecoin with PayPal. The operators realized that this payment method was so demanded that maybe they should also try it for bitcoin. The site has 100 thousand unique visits per month and growing by 10% each quarter. PayPal to bitcoin purchases can be done without ID verification for small amounts under 15 usd. Larger amounts require various stages of vetting depending on the weekly quantity. Fees are approximately on par with the competition. While the site owner remains discrete, users review are mostly positive, and I would still recommend this site a great alternative. 

Xcoins.io

Xcoins are a really trustworthy option. They have just moved into new offices (former Google building) in downtown Santa Monica, USA. The platform uses an innovative feature of lending bitcoins on peer to peer basis. This enables instant transactions and makes Xcoins the fastest of all sites to get BTC with PayPal. I have had a few opportunities to interact with support and they are very swift to respond and fix issues. In terms of popularity, Xcoins are definitely easier to use than WeSellCrypto and have twice the amount of traffic.

Good places to get bitcoin with cash

Let’s face it, some of us prefer to buy bitcoin anonymously, while others simply like to meetup in person and engage in some digital currency related conversation. When buying with cash this is all possible. It is always recommended to meet in a public place and double-check the seller’s review status. It is also possible to use a bitcion ATM to buy with cash. To find the nearest location to you, use CoinATMradar for an impressively interactive and very detailed ATM map.

The following list of sites enable & facilitate cash transactions:

Localbitcoins.com

Visit Website

Localbitcoins have recently added the option for buyers and sellers to exchange bitcoins for PayPal. I think this is a pretty sweet feature. Due to the fear of reversible transactions and charge-backs, not many sites offer the use of this payment processor.

Most Localbitcoin sellers will allow purchases ranging between 10 usd to 1500 usd in PayPal. The big downside is that they require you to have community reputation (previous purchase history). Sellers do this in-order to minimize the risk that bad-actors reverse the PayPal transaction while keeping the bitcoins.

Coinmama.com

Visit Website

Coinmama, based in the Virgin Islands, accepts both credit card and cash. This is the best place to use cash if you are familiar with using Werstern Union or MoneyGram. Due to their location and deposit methods, this is another excellent site to keep things as private as possible. This goes without saying, the website is nicely designed and works perfectly on a mobile browser as well as desktop. Customer support is truly amazing and live chat with agents is always possible. I strongly believe that Coinmama will rise to become a very popular option. I find that this is the easiest way to go about things. Why be on the darknet to stay private? Just use the right services. 

Coinatmradar.com

Coinatmradar is not an exchange. Rather, it is an interactive world map of over 1154 bitcoin ATMs over 58 countries. You may like to check the map and see if there is an ATM somewhere near you.

BitcoinATMs usually only accept cash in exchange for bitcoin. However some machines will go both ways and sell you cash in exchange for bitcoins. The ATMs look slightly different than traditional bank machines. These are generally smaller and more colorful.

Good places to get bitcoin with a bank transfer (SEPA/wire)

Looking for the fastest way? Using a bank transfer may not be for you. However for those seeking to acquire large amounts, this is by far the best way to proceed. Why? Because fees are so much lower. Expect waiting times of between 48 to 72 hours for SEPA and wire transfers.

Note: I recommend Coinbase for bank transfer purchases (they also accept this deposit method) as it is really beginner-friendly (far more than the sites below).

Coinbase.com

Visit Website

Coinbase really is a great site for multiple reasons, but most importantly because it’s intuitive. The user interface is so appealing and simple to use. Coinbase is also one of the most secure exchanges site and has over 18 million happy users per month. Card purchases are real simple and fees remain very competitive. The best part is that all user wallets are insured. Expert users can even activate a super-advanced & secure mutli-signature wallet. This guarantees that in the event Coinbase were to go offline then these users could still move their coins.

While you may wish for a no verification process, like all exchanges Coinbase do require ID submission before you can finalize an order. Should you want to trade like a professional: use GDAX for larger volume transactions and cheaper fees. Where are they located? Based out of San Francisco, they allow you to buy with USD, Euros, GBP. Be sure to read up their information page which will help you get started.

Kraken.com

For those looking to buy bitcoin stock, Kraken operates a professional exchange which has passed all of the highest security audits in this space. Operating out of San Francisco, USA since 2011 – this site is optimised for serious buyers wanting to actively trade BTC (Kraken uses the official “XBT” currency code). More and more Cryptocoin markets are up and running too.

Kraken offers the best service for a bank transfer (wire SEPA) deposits. For the time being this is the only deposit method available. Deposit currencies include euros, US dollars, and KRW (Korean Won). It is super cheap to deposit, withdraw, and trade on Kraken. Daily volumes are always high, and an excellent fee transparency guarantees low commissions and that you get the cheapest coins. Rumour has it that Kraken could add leveraged trading (yes – short selling) sometime soon.

Bitcoin.de

Bitcoin.de have built themselves quite a solid following and reputation in the European market. Based in Germany, this site is really easy to use and a great choice for people looking to purchase bitcoin in small to average amounts. Similarly to other p2p platforms, these guys have an escrow service. Liquidity is not as large as on Bitfinex for example, but safety and a user-friendly experience make it fine for beginners & newcomers. Fees are currently at 1 percent of selling price. Deposit currency is in EUR, by SEPA bank transfer.

Conclusion

Hopefully the above list of sites serves as a good reference for your endeavor. For purchasing large amounts of BTC I would recommend using Kraken (USD EUR CAD GBP JPY) or Coinbase simply because these sites both have high volume trading. To purchase smaller amounts there are more options, which means finding the best site is slightly more time-intensive. All the same, sites like Localbitcoins, or Wesellcrypto are great for getting smaller amounts online. As you have seen, it is relatively easy to learn by testing a couple of different places and then deciding the most appropriate service for your needs. Once you know how to purchase bitcoin online with the best site then the process becomes more straightforward. The learning curve is not that steep anymore!

Should you have some extra time, I highly advise taking a moment to read the history of bitcoin. You may also like to take a look at the price history charts to have an idea of the important exchange rate evolution since Satoshi Nakamoto created it in late 2008. As a final note, I really recommend taking an active interest in the technology behind cryptocurrency, being the single most important innovation since the internet was invented. There is some great discussion on the /r/bitcoin subreddit.

You can read more about bitcoin on wikipedia.