Originally published on June 3, 2022 and updated on September 14, 2024

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Paxful is a borderless payments marketplace where anyone can store, swap, move, and earn digital or local currencies with others around the world – even without a bank account. Since our founding in 2015, 14 million users have signed up for a secure Paxful cryptocurrency account, and our marketplace has facilitated over $5 billion in financial transactions. 

Paxful is based in the United States, run by a veteran leadership team, and continues to grow the world’s largest and longest-running peer-to-peer financial marketplace in the world. 

If you’re new to cryptocurrency and want to understand how Paxful works and what it is, this guide will give you all the essential information. It covers what Paxful is, what a Paxful account is, and what Paxful is used for.

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Key takeaways

• Paxful is a peer-to-peer cryptocurrency marketplace where users can buy, sell, and trade local and digital currencies. 
• Paxful offers trading on BTC, ETC, USDT, and USDC using over 300 payment methods in more than 170 countries – without needing a bank account.
• Paxful’s marketplace is built for and by a vibrant community of crypto traders, investors, freelancers, overseas workers, and entrepreneurs. They utilize Paxful for trading, remittances, service payments, and preserving their wealth against inflation.
• Paxful is the world’s largest and longest-running peer-to-peer marketplace – and we’re continuously improving!

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What is Paxful?

Paxful is a global peer-to-peer (P2P) cryptocurrency marketplace that allows users to buy, sell, store, swap, and send various local and digital currencies, including Bitcoin (BTC), Tether (USDT), Ethereum (ETH), and USDC, using over 300 payment methods.

Paxful facilitates direct trades between individual users, distinguishing itself from traditional cryptocurrency markets where trades occur between users and a centralized or decentralized exchange. This removes the requirement for order books, brokerages, or a central authority. 

Who uses Paxful?

Paxful is a versatile platform, catering to a wide range of users with different needs:

• Crypto traders: Traders use Paxful to buy and sell crypto, often attempting to earn on arbitrage—buying low in one market and selling high in another. Paxful’s P2P model provides unique opportunities for traders to find good deals and profit from price differences across different regions and payment methods.
• Retail investors: Retail investors often use Paxful to store their wealth in cryptocurrency, protecting it from inflation or instability in local currencies. With options to swap into stablecoins like USDT, Paxful offers a way to preserve value without the volatility associated with other cryptocurrencies.
• Freelancers: Many freelancers worldwide accept cryptocurrency as payment for their services. Paxful enables them to convert their crypto earnings into local currencies, giving them quick access to their money without needing a traditional bank account.
• Overseas workers: Paxful is a popular choice for those who need to send remittances. It allows workers to send money home to their families, avoiding high fees and delays associated with traditional remittance services.

How does Paxful keep traders safe?

Security is a top priority for Paxful, and the platform has several measures in place to ensure that your trades and funds are protected:

• Independent escrow: Paxful uses an independent, enterprise-grade escrow service to hold the cryptocurrency during a trade. Peer-to-peer traders rely on Paxful to securely custody crypto until both parties have fulfilled their obligations, giving P2P traders a fair trade guarantee.
• Fair disputes: Paxful has a fair and transparent resolution system in case something unexpected happens during a trade. Both parties can submit evidence, and a Paxful moderator will resolve the issue without bias.
• Marketplace moderation: Paxful combines expert talent with the latest technology to offer a safe, secure, and reliable marketplace. Many moderators are former or active P2P traders, so they understand our users’ needs and concerns. Empowered with cutting-edge tools in AI, crypto forensics, and cross-platform analytics, Paxful has a deep, broad, and constant view of everything going on across the platform.
• Wallet security: The Paxful account uses best-in-class security measures to protect your funds. This includes advanced encryption and multi-factor authentication, ensuring your cryptocurrencies are safe from theft or hacks.
• Identity verification: Paxful requires users to verify their identities to maintain a safe and legitimate marketplace. This process helps to prevent fraud and ensures that all users are who they say they are, adding an extra layer of security to every trade.
• User Privacy: Paxful protects users’ privacy and personal information by encrypting sensitive data, following strict verification processes, and limiting data sharing with third parties. Paxful works hard to maintain its flawless record of site and data security and is always improving its processes and tools to stay one step ahead of threats.

What can I use Paxful for?

There are many reasons why people choose Paxful over other platforms:

• Move money quickly: Paxful allows you to send money anytime, with low fees. This makes it a powerful tool for international transactions, remittances, and business payments.
• Save in cryptocurrency: With Paxful, you can protect your wealth from inflation or economic instability in your home country by holding it in cryptocurrency. Stablecoins like USDT offer a way to preserve value without exposure to the volatility of other cryptocurrencies.
• Access financial opportunities: Paxful opens up a world of financial opportunities, especially for those who don’t have access to traditional banking services. You can trade, invest, and manage your finances within the Paxful platform, even without a bank account, from nearly anywhere in the world.
• Earn profits: Whether you’re a trader looking to profit from price differences across markets or a market maker providing liquidity in high-demand trading pairs, Paxful offers numerous ways to earn money beyond asset speculation.

Paxful is more than just a platform to buy and sell Bitcoin. It’s a gateway to financial freedom, offering you the tools to trade, save, and move money on your terms. Whether you’re a seasoned trader or just getting started in crypto, Paxful provides a secure, user-friendly platform to help you achieve your financial goals.

What Paxful is not

To help users and potential users understand what Paxful truly offers, it’s essential to clarify what Paxful is not. There are several things that Paxful is not, including:

• Paxful is not a traditional cryptocurrency exchange. It has no centralized order book or set prices for buying and selling cryptocurrencies, and a portion of every transaction happens off-site via any of 300 payment methods.
• Paxful is not liable for user error. While we go to great lengths to educate and protect our users, all financial trades—especially those in cryptocurrencies—require users to conduct their due diligence and trade responsibly.
• Paxful is not a platform for illegal activities. We have strict policies against money laundering, terrorist financing, and other unlawful activities. We use various tools to find and prevent such activity, and we cooperate with global law and regulatory agencies to root out scammers and other threats to our users.
• Paxful is not a guaranteed profit-making platform. The value of cryptocurrencies can be highly volatile, and trading on Paxful involves risks, just like any other investment or trading activity.
• Paxful is not limited to Bitcoin. While Paxful initially became the go-to marketplace for Bitcoin trading, it is not limited to just Bitcoin. The platform now supports multiple cryptocurrencies besides BTC, including Ethereum or stablecoins like USDT and USDC.
• Paxful is not a financial advisor: While Paxful provides a platform for trading cryptocurrencies, it doesn’t offer investment advice or financial planning services. Always do your own research, and take nothing on Paxful as financial advice.
• Paxful is not a broker: Unlike traditional brokers, Paxful doesn’t act as a middleman between buyers and sellers. Instead, it operates as a peer-to-peer marketplace, connecting individuals directly. This means that users buy and sell cryptocurrencies from each other, not through Paxful itself.

Growing by the rules: Paxful on compliance and regulation

Paxful takes legal and regulatory compliance seriously. The company operates as a US-based, licensed, and regulated business and follows strict rules to protect users and prevent illegal activities.

One key area of focus is anti-money laundering (AML). Paxful has AML policies and procedures to stop criminals from using the platform, which keeps users safe and protects the broader financial community.

The company also uses ID verification processes to enhance security, known as Know Your Customer (KYC). Users must prove their identity before making transactions, which helps prevent fraud and ensures compliance with regulations.

Paxful can restrict accounts if it suspects rule-breaking. This allows for thorough investigations without user interference. Such actions help maintain the platform’s integrity, generally without affecting the user’s ability to withdraw funds, except in known scams or legal investigations.

The company employs seasoned compliance professionals to oversee and develop these efforts. We’re proud to work with a talented Chief Compliance Officer (CCO) who manages regulatory matters, and expert in-house legal counsel.

Support and community

Paxful offers various ways for users to get help and connect with others. Paxful offers a vast self-serve knowledge base where users can find answers to common questions.If users need more help, Paxful offers various ways to contact support, including email, chatbot, and even live chat support. Users can find it by clicking the Paxful icon at the bottom right of the knowledge base page.

Paxful also offers ways for users to connect to find trading partners, discuss marketplace opportunities, and offer feedback: on any of our social and community channels, like Twitter and Telegram.

By using these support tools and joining the community, users can get help and make the most of their Paxful experience.

How does Paxful work?

Here is a simple 5-step summary of a Paxful trade, from signup to successful transaction.

Would you prefer to watch a video instead? Watch a Paxful trader through the full Bitcoin buying process in this how-to video tutorial.

1. Creating an account

The first step to using Paxful is creating an account. This process is straightforward:

• Create a Paxful account in seconds using your phone, the web, or through our app. Verifying your account adds an extra layer of security, and you’ll also get to store your crypto on your Paxful account.

2. Browsing offers

Once your account is set up, you can start browsing offers:

• Select a cryptocurrency: Paxful supports various cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Tether (USDT), and USDC. 
• Filter by payment method: Paxful offers over 300 payment methods, from bank transfers and PayPal to niche local payment methods and cash payments. Select your preferred method to filter the offers.
• Choose an offer: Browse the available offers, paying attention to the exchange rates, payment windows, and the seller’s reputation. When you find an offer that suits your needs, click it for more details.

Here are a few things you should be on the lookout for:

• Price – Shown as a percentage with an arrow either pointing up or down beside it, this is how much you’re buying the Bitcoin compared to the current market price. Additionally, you can also see how much Bitcoin you’re getting on the dollar by looking at the USD value beside the price.
  
• Offer limits – Shown as a range, this refers to how much traders are willing to sell, so make sure that how much you want to spend fits within this range.
  
• Offer description – Shown under the payment method, the offer description gives you a brief idea of how these sellers want to be paid. Make sure that your preferred payment method matches theirs so the trade goes smoothly.
  
• Feedback score – Shown as a green thumbs-up icon and a numerical rating, the feedback score of each trader gives you a brief idea of how reputable they are. If you want to dive deeper into their profile, you can click on their name to see feedback from their previous trades.
  
• Seller availability – Before ever starting a trade, make sure that the seller is available. If they’re inactive, it may take a while for the trade to be completed. You can check this by seeing how recently they were online, shown under their feedback score.
  
• Badges – We’ll be pinning offers from some of our most trusted traders at the top, so be on the lookout for a Featured or Trusted badge on their offers. Additionally, you can filter the offer page to show only trusted traders by turning Paxful Verified Offers Only on.
  

3. Initiating a trade

Once you’ve selected an offer, it’s time to initiate the trade:

• Open a trade: Click the “buy” or “sell” button to open a trade. This will create a chat window between you and the other party, where you can communicate directly.
• Follow the instructions: The seller will provide instructions on how to complete the payment. Follow these carefully, and document the transaction as proof in case of any disputes.

4. Using Escrow for security

One of Paxful’s key features is its institutional grade and independent escrow service, which ensures that both parties fulfill their obligations before the cryptocurrency is released:

• Escrow holds the crypto: When a trade is initiated, the cryptocurrency is automatically moved into Paxful’s secure escrow account, ensuring that the seller cannot back out once payment is made.
• Complete the payment: As the buyer, you must pay within the specified time frame. Once you’ve done this, mark the payment as complete in the trade chat.
• Release the crypto: After verifying that the payment has been received, the seller will release the cryptocurrency from escrow, which will then be transferred to your Paxful account.

5. Completing the trade

Once the cryptocurrency has been released from escrow, the trade is complete:

• Leave honest feedback: Paxful encourages users to comment on their trading experience. This helps build trust within the community and allows other users to make informed decisions.

Access your assets: The cryptocurrency you’ve purchased will be available in your Paxful account, ready to be used or withdrawn to an external wallet.

Creating offers

Creating offers is a way for you to trade on your own terms. You can create buy offers to reach out to those willing to sell their Bitcoin or create sell offers for people who want to buy Bitcoin. 

To create your own offer, head to the homepage and click on Create an Offer at the top. From there, set your initial preferences: cryptocurrency of choice, what type of offer you’d like to create, and your preferred payment method. 

In the next steps, you’ll be able to customize the offer as much as you want. Here’s a breakdown of each field: 

• Market price vs. Fixed price – This option will let you decide if you want to peg the price of your offer based on the market or want it at a fixed rate. 
• Offer Trade Limits – This range refers to how much you’re looking to trade. 
• Offer Margin – This percentage refers to how much you’ll earn during the trade. 
• Offer Time Limit – This time limit refers to how long your trade partner has to complete the payment before the trade expires. 
• Offer Tags – Choose up to three tags to quickly describe your offer. You can click on See all available tags to choose from a list or start typing on the input field. 
• Offer Label – This 25-character phrase refers to the selling point of the offer—what can you say in 25 characters that will make traders choose your offer over others? 
• Offer Terms – This is a short description traders see on the individual offer page that shows them how they need to pay and what makes your offer stand out. Make sure to keep this as clear and concise as possible.
• Trade Instructions – This is a more detailed version of the Offer Terms. On these instructions, make sure to enumerate, in as much detail as possible, everything you need when it comes to the payment of your trade partner. 
• Limitations – Verification, Target Country, Visibility, Minimum Trades Required, Limit for New Users, Limitation by Countries, Proxy/VPN Users, and Working Hours are all ways you can limit the visibility and accessibility of your offer. You can customize these settings as much as you want depending on what type of trader you want to deal with. 

After setting all these up, you can click on Create offer and your offer will be listed—all that’s left to do is for someone to pick your offer. You can even have multiple offers active at the same time, allowing you to buy and sell Bitcoin simultaneously. 

Staying safe while buying Bitcoin

If you’re wondering: is Paxful safe? The answer is yes, buying and selling Bitcoin on Paxful is completely safe. We do everything we can to make sure that you’re in a safe trading environment, enabling security features like escrow services, state-of-the-art blockchain analysis tools, and more. However, you can also do your part in making sure that your money is safe on Paxful. Here are a few general tips: 

• Never trade off-escrow
  Trading off-escrow is against Paxful’s Terms of Service and takes away the protection that Paxful moderators assure you. If you ever encounter someone who tries to take the trade off-escrow, report them immediately.
  
• Never share any personal information
  Giving away your contact or personal information can lead to people attempting to scam you outside of the Paxful website or impersonating you to get access to your accounts.
  
• Know how to identify official Paxful moderators
  Paxful moderators will have specific chat bubbles and signatures to let you know that we’re here to help. If you want to know that you’re dealing with a Paxful moderator, look for a purple chat bubble with a Paxful Moderator badge on the bottom left side. 

• Enable two-factor authentication (2FA)
  Enabling 2FA for all the functions on your account adds an extra layer of protection. This means that you’ll need to sign off on any transactions that go through. Be sure to turn this feature on as soon as you can.
  
• Set security questions
  As soon as you create your account, you should immediately set up security questions. If you haven’t yet, you can always go back into your account settings and set them up. Remember to choose questions and answers that only you know and be sure that you can easily remember them!
  
• Look for trusted traders
  If you’re just starting out, one of the best ways to get the hang of things is to specifically look for trusted traders on the platform. As we mentioned earlier, you can do this by turning on the Paxful Verified Offers Only toggle when you’re looking for an offer.
  
• Keep clear receipts
  Although there aren’t necessarily paper receipts after buying and selling Bitcoin on Paxful, taking clear screenshots of your transaction can make good proof of purchase. In the case of a dispute, having these around will help your case greatly.
  
• Be polite to your trade partners
  Once you start a trade and the live chat pops up, make sure to exercise the right chatting etiquette with your trade partner—polite, professional, and straight to the point. Doing so will ensure that your trade goes as smoothly and efficiently as possible. 

Ready to get started? 

Now that you’ve gone through the ultimate beginner’s guide on Paxful, we believe you’re ready to get started! Head to the webpage, look for an offer you like, and buy crypto today!