Wondering if Paxful is legit or a scam? Check out this in-depth Paxful review to get the answers and so much more.
PRODUCT NAME: Paxful
Price: Free to sign up
Owners: Ray & Artur
Our Recommendation: Even though Paxful is legit, Bitcoin trading is risky and sometimes shady. A safe way of making money online is by building your own business.
An Overview – What is Paxful?
Paxful is an exchange platform where you can buy, sell and trade Bitcoins. You can check out Wiki if you wanted a brief history of how the Bitcoin system came about. Paxful is owned by Ray and Artur and based in Wilmington, Delaware.
Like all other Bitcoin systems and platforms, every transaction on Paxful is peer-to-peer. This means the whole buying, selling and trading of Bitcoins process happens directly between the buyer and the seller. Most platforms (not only Bitcoin platforms) that operate using this sort of direct transaction model leaves room for a lot of flaws. I can tell this from my recent experience with another platform, Flippa. I listed a website for an auction recently, bids came in but the top bidder when the auction ended failed to pay up.
The platforms provide you with an avenue to let people know you what you are selling and let potential buyers signal their interest, but want nothing to do with negotiations between the two parties. All you are required to do to keep your account is pay the 1% transaction fee.
While Paxful is not a scam in itself, there are a lot of scam sellers and buyers within the platform. One individual could create multiple accounts and pose as different sellers. This is extremely rife on Paxful.
This is not necessarily a huge slight on the program, as it is typically what you would get on most BitCoin websites anyway.
What are Bitcoins?
Bitcoins are digital assets or currencies. These are a digital equivalent of hard currencies like Dollars, Pounds, etc. A lot of platforms online these days let you conduct transactions using Bitcoins instead of real currency.
How Does Paxful Work?
The whole process is simple. You conduct a search of the Bitcoin value you would like to purchase. A list of potential sellers come up. When you see an offer you like, you contact the seller through the live chat available on Paxful. It is through this means that both buyer and seller will discuss how much bitcoin you want to purchase and the method of payment.
Once payment is concluded, you click “mark as paid” and you will now wait for them to transfer the Bitcoins to your Paxful wallet. Once that is done, you can now do whatever you want with your Bitcoins. You can pay for services straight from your Paxful wallet or you can transfer funds to a Bitcoin wallet on your phone and conduct transactions from there. It is totally up to you.
The only possible difficult part is at the payment stage. You can only experience difficulties when you run into dishonest sellers or dishonest buyers if you are a seller. As long as “mark as paid” has been clicked, Paxful must get their 1% transaction fee regardless of if payment was actually made.
Failure to pay this 1% transaction fee on the stated deadline could lead to suspension of your account, and they claim they could take possible legal action. I really doubt this though, as they barely have any information on its members.
Payment Methods on Paxful
There are a plethora of ways you could conduct payments on Paxful – way too many to mention in this post! However, we will summarize the payment methods into 4 huge methods:
(1) Payment Processors
Here I am talking about services like Paypal, Payza, SolidTrustPay, etc. I suggest that whenever you are discussing form of payment with a seller, you insist on making payments through Paypal when you want to buy Bitcoins. I have not had any experience with the other payment processors but I can vouch for Paypal. Paying through Paypal drastically reduces your chances of being scammed on Paxful, because you can cancel payments and get refunds in some cases using Paypal.
(2) Gift Cards
This is the preferred method of most sellers I have come across on Paxful. From my research, I discovered this is the most convenient way for buyers to get scammed, so I don’t encourage you make payments using gift cards.
How this works is the seller tries to convince you to purchase the gift card with cash, not card. Why do you think they do this? So you will not have the option of calling your bank to cancel the transaction. After purchasing the gift card, you will have to scan the card and the receipt and then send it to the seller.
If the seller is trying to scam you, they would say they cannot continue with the transaction because it looks suspicious. If they don’t reject you outrightly, they will try to sell you a lower value of bitcoins that you initially started negotiating for. At this stage, they already have your gift card information and could very quickly take away your money.
If the seller is legit, he will acknowledge receipt of the payment and fund your wallet with the Bitcoins you paid for.
(3) Cash Deposits
This involves getting the seller’s name and bank account number and depositing the money straight into their bank accounts. Since it is a transaction between banks, I would say this might be a fairly safe option. Sellers willing to involve banks are mostly legit anyway. There is also an option of paying through MoneyGram, Western Union, etc.
(4) Credit Cards and Debit Cards
I find this very risky for sellers. The high chance buyers could use stolen or maxed out cards to make payment makes the fact that they transfer the bitcoins instantly very weird. In some way, they try to compensate for this risk by charging a little bit more than they would charge otherwise.
For buyers, you have the luxury of paying with your debit and credit cards albeit for a slightly higher fee. However, I still would not feel comfortable giving my credit card details to somebody I cannot verify. Most sellers fund your BitCoin wallet instantly.
- The company is legit and is in fact, one of the most popular Bitcoin exchange platforms around.
- The owners are real people who you can verify
- They are free to join
- They have some training
- They have a forum
- Many duplicate sellers
- Direct transaction between seller and buyer leaves a lot of room for scamming
Paxful Training & Tools
This is simply an exchange platform involving trading bitcoins for money. Hence, there is no huge need for a lot of training. However, they do provide a backpack guide page featuring a video and text walkthrough of the basics like how to fund your wallet, how to contact a vendor, etc.
How about Support?
There is a forum where you can ask questions and even post complaints about vendors. I have seen people call out a couple of vendors by calling them scams.
At least, they have a platform where you can speak out. This is something a lot of platforms do not have.
Now to the Elephant in the Room…
Is Paxful a Scam?
My answer is NO. The program itself is nowhere close to being a scam in my opinion. To me, this is just like asking if eBay or Flippa or Craigslist is a scam. The programs themselves are not scams.
However, asking “are there scams on Paxful?” is another thing entirely. My answer is yes, there are. But like every other platform that provides an avenue for people to join and sell stuff, there is a limit to how much the company can do to zero scamming down. It is up to the buyer to do his due diligence first before heading into a transaction.
I found a couple of negative reviews from people who I’m sure just jumped into doing business with just any seller they found. Obviously, they got scammed.
Paxful is legit. If you are interested in dealing with BitCoins, you can go ahead and sign up for Paxful. There are just as many scams on Paxful as you would find in any other platforms like it. Just be careful who you deal with and if your gut tells you not to follow through with a vendor or buyer, don’t go ahead with it.
If you are simply looking for a way to make money online, I have a something better for you. How about building your own business around anything whatsoever that you love? Check out my top recommendation to learn how to build a successful online business around your current passion and interest.
PRODUCT NAME: Paxful
Price: Free to sign up
Owners: Ray & Artur
I hope you enjoyed reading my Paxful review.
If you have any questions or thoughts you would like to share, please leave them in the comments below. I will be more than happy to help you out. Cheers 🙂