How is Bitcoin better than PayPal?

Both payment options have a claim to fame: PayPal is a behemoth in the online payments market, and bitcoin is often billed as the currency of the future. Naturally, they’ve attracted a lot of attention as options for international money transfers.

Let’s compare them head-to-head — how they work, what they cost and how quick they are from send to receipt. We’ll also go over a few case studies to decide a winner.

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Let’s go over the bare-bones processes of transferring money through bitcoin platforms and PayPal.

Bitcoin

Very simply, transferring money through bitcoin involves:

• Using your local currency to purchase bitcoin, then
• Selling your bitcoin for the international currency you want.

Your recipient receives your bitcoin transfer in a bitcoin wallet. They need to sell the bitcoin for their local currency. Finally, they need to withdraw the currency to their bank account.

PayPal

Here’s how to transfer money through PayPal:

• Fund your transfer with your PayPal balance, bank account, credit or debit card, or PayPal Credit, then
• Send money to your recipient’s PayPal account.

After your recipient receives the money, they can either keep the funds in their PayPal account or withdraw the money to their bank account.

Bitcoin

To get a feel for the fees you might pay when transferring bitcoin, take a look at what you’ll pay at Coinbase, one of the world’s largest bitcoin platforms.

• Depositing money
• ACH transfer – Free
• Wire transfer – $10 ($25 outgoing)
• Buying bitcoin
• US bank account – 1.49% ($0.15 minimum)
• Coinbase USD wallet – 1.49%
• Credit or debit card – 3.99%
• Payout after selling bitcoin
• US bank account – 1.49% ($0.15 minimum)
• Coinbase USD wallet – 1.49%
• Credit or debit card – 3.99%

In other countries, there may be a small fee to withdraw money from Coinbase to a bank account. However, this fee is usually small — 0.15 euros, for example.

PayPal

These are the fees for sending money to another PayPal account.

• Pay entirely with your PayPal balance or linked bank account
• US and Canada – No fee
• Other countries – $2.99 to $4.99 depending on country
• Pay with credit or debit card or PayPal Credit
• US and Canada – 2.9% + fixed fee of about $0.30
• Other countries – 2.9% + flat fee depending on country + fixed fee based on currency