The days when bitcoin was just a cryptocurrency that could only be farmed on a PC are gone or purchased for a trifling portion of money are gone – cryptocurrencies, and especially bitcoin, appear to be a viable investment asset. There are various ways of purchasing bitcoin, all of which have certain pros and cons. Depending on your needs and purposes of your bitcoin purchase, you are able to choose the most suitable payment methods for you. This article will actually help you to make up your mind about what are the best payment methods exactly for you.
Best Payment Methods: Credit/Debit Card
Buying bitcoin with a debit or credit card is the easiest way to invest in cryptocurrencies. Besides, the processing speed of the transaction is fast as well, as the system is able to verify your identity immediately. However, this method works well only when an investor wants to test how cryptocurrency works by investing a relatively small portion of money. Of course, the speediness of the transactions makes purchasing bitcoins via credit/debit cards one of the best payment methods, but also one of the most expansive ones.
The speediness of the process allows the investor to grasp how investing in the cryptocurrencies is carried out, while low anonymity doesn’t harm him. However, purchasing bitcoins with a credit/debit card doesn’t work well when you buy large amounts of cryptocurrencies – astonishing fees is not something wise to start the investments with.
Purchasing bitcoins and other cryptocurrencies via PayPal is another easy method of cryptocurrency purchasing. However, the fees the purchaser bears when buying cryptocurrencies with a PayPal account are even higher than if one would buy via a credit or debit card. So if you tend to invest large sums of money in the bitcoin or other cryptocurrencies, it would be better to do it either via a credit/debit card method or even via cheaper methods (see lower).
Another important aspect of buying bitcoins with a PayPal account is the fact that very few exchanges offer such a payment method. There are three solid reasons that prevent the majority of exchanges for offering this payment method to their customers. First of all, PayPal and bitcoin (as well as other cryptocurrencies) are direct rivals, so it appears to be normal that PayPal’s management doesn’t fancy cryptocurrencies. Secondly, a user who has purchased bitcoins or other cryptocurrencies with a PayPal account is able to carry out a chargeback with ease. At third, it may happen that someone may buy bitcoins with a hacked PayPal account. In the end, PayPal will perform a chargeback upon the order of the account’s real owner, while the exchange will be left with nothing.
Even though there are not many exchanges that allow purchasing bitcoins with PayPal, there is a workaround, which, however, results in the noticeably higher fees. In the first place, you can buy Second Life Lindens (SLL) with your PayPal account at the Virtual World Exchange, which will allow you to convert your SLL into bitcoins later. Yet, the transaction fees may amount to or even exceed 6% of the total sum.
Bank transfer is a method of payment that is commonly accepted almost on every cryptocurrency exchange – it is accepted on the major ones for sure. This payment method, unlike the two presented above, offers really low fees, but that comes at a cost of the transaction’s speed. You can completely minimize the fees you pay via a bank transfer if you use the Wire transfers in the United States or SEPA transfers in Europe.
If you want to maximize your earnings and avoid high fees while the transaction’s speed does not tend to be a problem for you, purchasing cryptocurrencies via bank transfers is likely to be the best payment method for you. Yet, some exchanges have local limitations on purchasing cryptocurrencies via bank transfers. For example, Coinbase, one of the largest exchanges, offers purchasing bitcoins via bank transfers only to the US residents. Likewise, only UK residents can purchase cryptocurrencies through bank transfers at the Bitcoin Magnet. This is one of the best payment methods for buying cryptocurrencies for anyone who wants to avoid paying high fees.
Payoneer and Skrill
Both Payoneer and Skrill are popular financial services, yet their ways of operating are really too different. Let’s begin with Payoneer. In order to use Payoneer, you should have a pre-paid Payoneer card sent to you by this company. Once you have a pre-paid Payoneer card with funds on it, you are able to buy bitcoins with its help on such major exchanges like BTC-e, Bitstamp, Coinbase, Circle and Kraken.
Considering that it appears to be rather hard to perform a chargeback, the sellers of crypcocurrencies are more eager to sell bitcoin and other cryptos to the holders of Payoneer cards than to PayPal users. The fees tend to be from average to high (depending on the exchange), but actually it’s almost same as paying with a simple credit card. This way, Payoneer, one of the best payment methods for bitcoins, is far friendlier towards cryptocurrencies than PayPal.
When it comes to purchasing bitcoin via Skrill, it tends to be more difficult, as you don’t hold an actual debit card as in the case of Payoneer. However, you can buy cryptocurrencies via Skrill on several exchanges. One of the most used exchanges for this purpose is BitPanda, where you can buy bitcoins for Skrill EUR. Such a method allows you to bear low fees and do it with ease and fast, though your privacy won’t be protected.
The other way is also acceptable, but rarely used – buying SLL at the VirWoX and converting them into bitcoins. In such a case, however, you will bear high fees and it’s pretty difficult to do. After all, you can find local sellers at the Local Bitcoins who accept Skrill as a method of payment.
Western Union and MoneyGram
Purchasing bitcoins and other cryptocurrencies via MoneyGram and Western Union, the world’s two largest services of money transfers, is also possible – both services can act as an intermediary between the cash and the bitcoin. Besides, both of the services are available on the major bitcoin exchanges. However, the speed of the transaction is average, while the fees tend to be rather high.
Cash Deposits in Bank Branches
One of the simplest ways to buy bitcoins is going to a local bank and depositing your cash into your account in a certain exchange. However, the transaction fees tend to be average or higher than average. Besides, not all exchanges and banks offer this feature, as well as this payment method is available not in every country, so we would recommend to write about this issue to the support of your exchange at first. The majority of such transactions are carried out in the EUR and USD currencies.
Cash via Instant Money Transfers
If you have cash and you want to purchase bitcoins with it, you can also do it via Instant Money Transfers. Some exchanges (like 247exchange.com) cooperate with money transfer networks. In the case of 247exchange.com, this exchange cooperates with MoneyPolo, the money transfer company that can boast to have more than 400,000 agents around the world. Actually, this method is pretty similar (if not the same) as purchasing bitcoins via MoneyGram and Western Union (just these companies appear to be the largest ones).
Purchasing Bitcoins with Case from Local Sellers
After all, many bitcoin and cryptocurrency exchanges offer an opportunity to buy bitcoins with cash from local sellers. However, you must be aware and check the history of the seller’s successful trades. It would be wiser to avoid any deals with suspicious sellers. After all, buying bitcoins with cash from local sellers allows you to protect your privacy, while the transaction fees are low.
If you are a serious investor with a great deal of funds to invest in and you believe that the market of the cryptocurrencies will keep growing, you may consider cryptocurrency mining as a viable investment alternative. Yet, it requires you to invest a really large sum of money in such an enterprise, and our website will help you to get to know more about the world of cryptocurrencies and how to mine them.
After all, if you are an artist, writer, producer, web developer, or you specialize in any other profession where you can freelance, you are able to sell your work in exchange of cryptocurrencies. There are plenty of pros: no fees and privacy protection tends to be rather high. Yet, you have to deliver a great value and work hard for it. Moreover, fewer and fewer employers are eager to pay with bitcoins as this (and other) cryptocurrency keeps growing.
Which Payment Methods to Choose
At the end, our comparison table allows you to make up your mind regarding which payment method it would be better for you to use for buying bitcoins. It will help you to find out what are the best payment methods for buying cryptocurrencies with ease.
|Payment Method||Ease of Use||Speed||Privacy||Fees||Minimum sum to invest|
|Credit/debit card||Easy||Very fast||Low||High||Low|
|MoneyGram and Western Union||Medium||Average||Average||Average||Low|
|Instant Money Transfers (cash)||Medium||Fast||Good||Average||Low|
|Buying from locals (cash)||Medium||Slow||Very good||Low||Low|
|Mining||Hard||Very Slow||Very good||-||Very high|
Apart from this article about the best payment methods for purchasing cryptocurrencies, we suggest you to have a look at the reviews of the best cryptocurrency exchanges.