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I want to buy some bitcoins. Ideally, I would like to buy them on the MtGox exchange (because the consensus seems to be that this is the most reputable exchange), however I have found the system for transferring USD to MtGox to be very disappointing. I would have liked to be able to add funds with PayPal or directly with a credit card, however both of these are not possible.

My question has two parts:

  1. Is there an easy way to use a credit card to add USD funds to my MtGox account. Liberty Reserve, Dwolla, and Paxum seem to be the financial institutions of choice for MtGox and the rest of the exchanges. Is any of these simple to fund using a credit card, or are they all basically PayPal analogues (which Paxum seems to be) that require a large amount of setup?
  2. If it is not possible for MtGox, is there another, hopefully reputable, exchange that I can use PayPal or a Credit Card to buy bitcoins with?
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Hi You can buy bitcoins withpaypal through giftcards websites like coinmama.com – Yan Apr 20 at 11:05
You should be able to send money by credit card via Western Union to one of the services supported by one of the bitoin exchanges. It's impractical and the fees will probably be high. – Roy May 7 at 11:09

11 Answers

up vote 33 down vote accepted

I did some more digging on bitcoin.it and answered my own question. According to the FAQ and the list of payment methods, the reason that Paypal and Credit Cards are not accepted is to prevent fraud (by doing a fraudulent charge-back). For this reason, none of the exchanges accept these as forms of payment.

In short, you cannot (directly) use these to buy bitcoins at exchanges.

Edit: I did have some luck buying some Bitcoins using Paypal using #bitcoin-otc. It takes a bit of setup and it's a bit more expensive, and you can't buy in significant quantities but it's possible you can find someone willing to sell to unrated users (liked I did).

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Please accept your answer (you can after 48 hours). – ripper234 Jan 2 '12 at 6:03
up vote 22 down vote

PayPal's user agreement prohibits the use of their payment network for buying digital currency.

Here's an approach. With VirWoX you can buy SLL and pay with either credit card or Paypal. Then you can trade your SLL for BTC:

Sporadically you will find inventory on BTCQuick:

And finally, there is the ability to deposit cash at a bank (presuming you are in the U.S.), the need to use something like PayPal has lessened.

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Yes and they have 8% commissions. 5% to buy and 3% to sell. (I don't know why they just don't have 4% either way.) – shoeless joe Dec 27 '11 at 6:02
You can fund bitcoins with ACH (bank) using coinbase.com – chovy Jan 9 at 6:46
up vote 3 down vote

Buying bitcoins for credit card or PayPal is very problematic, but all hope is not yet lost.

Every now and then a new service pops up that thinks it cracked the secret of how to do this sustainably - http://www.mrcoins.org/ seems to be the flavor of the month. Such services usually take a very high fee.

CoinPal was a great service when it ran, and they said they're considering returning with credit card payments. They know what they're doing so they may actually pull it off.

Also, http://www.memorydealers.com/ sell casascius physical bitcoins which you can buy and redeem (or not).

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I strongly recommend not using such services. They are doomed to fail for a very simple reason -- they have to charge high fees, legitimate users are generally not willing to pay high fees, but scammers always are since it's not their money. Thus most users of such services will inevitably be scammers, and the business will collapse -- possibly while holding your money. – David Schwartz♦ Dec 21 '11 at 17:51
@DavidSchwartz - good point. en.wikipedia.org/wiki/The_Market_for_Lemons – ripper234 Dec 21 '11 at 18:35
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@DavidSchwartz: I understand your sentiment but I'll have to disagree. First, because these transactions should complete in a matter of minutes, and the chance the business will collapse with your money in a few minutes is slim. Second, because this doesn't apply to services which know what they're doing - CoinPal with its anti-fraud mechanisms offered reasonable fees and did not have a problem with fraud, only with PayPal freezing. – Meni Rosenfeld Dec 22 '11 at 5:42
They should complete in a matter of minutes. Whether they will when the company is collapsing is another story. CoinPal succeeded for a time because they made PayPal deal with the fraud, which of course is something PayPal is not willing to do. You can only pass your costs on to someone else for so long. The fact is, it costs more to support reversible transactions and that cost will have to be passed on. Honest customers have no reason to pay that fee. Fraudsters have no reason not to. I think this is an inherent problem. – David Schwartz♦ Dec 22 '11 at 5:48
PayPal forwards fraud costs to the merchant, they don't absorb them. CoinPal succeeded and had very few chargebacks because they had heuristics to identify suspicious customers. PayPal froze their account because of their policies, not because of fraud. – Meni Rosenfeld Dec 22 '11 at 11:38
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up vote 1 down vote

btcnow.net Sells via OKPAY which is a Russian PayPal analogue. Like PayPal, it allows you to directly fund a transaction from a credit/debit card.

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up vote 1 down vote

There are some roundabout ways of using PayPal and Credit Cards to acquire Bitcoin. See some examples here: https://ogrr.com/viewtopic.php?f=37&t=592

iTunes (and other) gift certificates, MTGO tickets, virtual items

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up vote 1 down vote

I bought bitcoins with my credit card.

Please try it on https://buybitcoinbycreditcard.com/

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The webpage says: We stock 0.07500000 btc. – Macarse Mar 24 at 20:46
@Chad Have you actually used this site? I am seeing the same thing @Macarse is seeing months later We stock 0.07500000 btc. – styfle Apr 13 at 5:11
up vote 1 down vote

[Update: This exchange method is no longer available.]

a website with the url of http://www.iocoloradocentral.com/ has converted my paypal funds to bitcoins for quite a while now, i have always received the bitcoins :).

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up vote 0 down vote

You cannot turn paypal into bitcoin but you can do it the other way around. Check out this site:

https://www.bitinstant.com/

They accept cash deposits (US only) and are also supposed to speed up the different transfers they allow. For example, from dwolla, paxum or liberty reserve to mtgox or tradehill. I haven't tried it myself though.

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Not really an answer, should have been a comment - the question is about buying, not selling. – ripper234 Dec 31 '11 at 2:46
up vote 0 down vote

I know https://metabank.ru/buy, a Russian exchange service with a good reputation (tracked on various bitcoin-forums).

There, one can

  • buy bitcoins for qiwi, a Russian payment system (where your account is identified with your mobile telephone number, and you can choose to confirm your payments through your mobile phone),
  • and one can pay in qiwi with a VISA/MasterCard (you have to register your card as a payment method beforehand, and validate that you own the card by providing to qiwi the information about a random small amount that has been blocked on your card by qiwi for a short period of time).

Qiwi charges 0.75% for payments with a card, and Metabank charges 4% commission for such an exchange (the exchange rate is the current price at MtGox).

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up vote 0 down vote

You can buy small numbers of Bitcoins with a credit card at http://www.buybitcoinswithacreditcard.com/ (or at least, you could as of March 21, 2013).

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up vote 0 down vote

Virwox Exchange is my favorite. I live in INDIA and we don't have Bitinstant support here so Virwox is the fastest and trustworthy option for me.

They do charge a premium, but you can always get a good price if you wait for a while before buying or selling BTC’s until the BTC exchange rates in the VirWox marketplace are within your target range.

For detailed instructions check here.

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