How to Pay for Bitcoin Using Different Payment Methods

While Satoshi Nakamoto might have created one of the greatest technological feats of our time, sometimes buying cryptocurrency can be difficult. Luckily, as a result of Bitcoin’s growing popularity, you can choose from a variety of payment options nowadays when purchasing this multipurpose coin. The options include bank transfers, card purchases, paying with cash, using payment processors like PayPal, and even paying anonymously.

Let’s take a closer look at both the advantages and disadvantages of these paying methods before you choose how to buy Bitcoins.

Buying Bitcoin With Your Bank Account

Linking your bank account with your crypto exchange account has never been easier! The most popular Australian exchanges at the moment allow you to make swift and inexpensive bank transfers via the newest payment services. You can check out our in-depth breakdown of which exchanges we recommend in Australia.

Swyftx, for example, accepts regular bank transfers that take around 3 to 6 hours to process (only during business days) and automated deposit methods using the following payment processors: POLi, PayID, and Osko.

All three of them offer instantaneous online and mobile transfers that notify the exchange when you make the payment so Swyftx can immediately approve your deposit. POLi payments and PayID are also available on other reliable Australian exchanges like CoinSpot and Independent Reserve. On CoinSpot, you can also choose to make a BPAY transfer with an added 0.9% fee.

After depositing, you can very easily create a buy order in the exchange of your choosing and be the proud owner of some Bitcoin in no time!

If you’re using an international cryptocurrency exchange because it has some cryptocurrency that you otherwise can’t buy on an Australian platform, they typically offer wire transfers or SWIFT payments as a substitute for ACH bank transfers. However, you should be aware that they could take up to one week because both the local and the overseas banks have to approve the transaction.

To speed up the process, you can purchase BTC from an Australian exchange and then trade the coins for your target currency on global crypto exchanges.

Buy Bitcoin With Credit Card in Australia

The option to pay via credit or debit card is available for Australian traders on popular crypto brokers such as Coinbase and Coinmama, but not so much on local exchanges. Even though a lot of traders prefer “paying with plastic”, such practical and time-saving purchases incur higher fees than bank transfers, for example.

Coinbase supports Mastercard and VISA debit card payments with a fixed fee of 3.99% per transaction. This is considered as reasonable pricing worldwide. You just need to create an account, link your debit card, and verify your identity. The only drawback is the purchasing limit of around $7,500 per week for these payments.

In comparison, Coinmama allows both credit and debit card payments but incurs a higher 5.00% “momentum” fee because you purchase Bitcoin at a locked rate and get higher limits on these purchases, i.e. you can buy $5,000 worth of BTC per day or $20,000 per month.

Buy Bitcoin With Cash

Did you know you can withdraw Bitcoin to your wallet address from specialized automated teller machines?

In Australia, there are 18 Bitcoin ATMs (or BATMs) where you can deposit cash (or use your card) to buy Bitcoins. This can also be a lifesaver when you’re traveling abroad and lack Internet access. Just don’t forget to search for a local Bitcoin ATM in advance.

Aussie traders can also buy BTC with cash using a decentralized or peer to peer exchange such as LocalBitcoins by making a cash deposit with Australian dollars. You can browse through the local deals to find sellers that accept cash as a payment method and would agree to meet with you in person. Even though you can check the seller’s reputation and trade history, always arrange to meet somewhere in public.

Finally, Australian exchanges such as CoinSpot and CoinJar offer yet another option for those of you looking to buy BTC with cash at a local newsagent. How does this work? On their website, look for “cash payment” or “blueshyft” in payment methods. Once you enter the BTC amount you want to purchase, the exchange will send a QR code to your email address.

Find the nearest “blueshyft” newsagent and show them your QR code. After they scan your code and verify your order, you can pay with cash and have the BTC transferred to your Bitcoin wallet address.

Buy Bitcoin With PayPal

Another widely used payment method is the American-based online provider PayPal that allows traders to make quick online money transfers. The problem is that not a lot of exchanges support this method because there’s a risk of chargeback fraud. Even when they do, it’s usually quite expensive compared to other methods. Another closely searched method is buying Bitcoin with gift cards, but we don’t recommend either of these methods due to their complexity.

However, if you’re so determined to buy Bitcoin with PayPal, you’re more likely to find this option on peer to peer exchanges like Paxful. You can set the search engine to show PayPal offers exclusively, and find one that works best for you.

Kucoin is one of the few centralized exchanges that support PayPal purchases but only up to $10,000. EToro is another great option if you’re interested in speculating on Bitcoin’s price rather than buying the asset itself.

Finally, if the reason why you want to use PayPal when buying BTC is that you have some money left on your PayPal balance that you need to spend, simply link your PayPal account to a credit or debit card and use this payment method instead.

Buy Bitcoin With Another Crypto

You don’t have to look far if you want to trade some cryptocurrencies you own for Bitcoin. The world’s first digital currency features on every single crypto exchange and can be traded against a plethora of different tokens, both popular and under-the-radar ones.

Many people have bought altcoins such as Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), or Zcash but are looking to trade it for Bitcoin, which is very easy in most popular exchanges.

If you are transferring it from another exchange you’ll simply need to click “Withdraw Bitcoin” and you will get a public key that you can put into the exchange you are moving it to.

For Australian traders, we recommend choosing Binance or Bittrex, two popular trading platforms that both support over 100 cryptocurrencies. Binance has over 450 trading pairs, while Bittrex lists around 300.

Before you get started, double-check that the platform has your trading pair. If you own XRP that you want to trade for BTC, look for a BTC/XRP pair. Next, register for an account, deposit the XRP coins, and buy your Bitcoins by setting the pair and entering the amount you want.

You can create a regular market order to buy BTC at the current market rate or limit order that won’t be executed until the coin reaches the price you’ve set.

Buy Bitcoin Anonymously

Nowadays, centralized crypto exchanges have mandatory KYC (personal details such as name, address, and phone number) checks that newly-registered users have to pass before they’re approved to use their account and trade on the platform. This is done to minimize the risk of cyber thefts and hacking attacks.

Still, there are some ways to avoid identity verification procedures if you believe they do traders more harm than good. After all, Bitcoin was created to promote a higher level of privacy in online Bitcoin transactions and decentralization. So, where can one buy Bitcoin anonymously in Australia?

Apart from some Bitcoin ATMs where you don’t have to provide any documentation to buy Bitcoin, most of them require an ID or ask to take your photo.

One trick is to buy BTC with another digital asset as you can usually complete these trades without verifying your identity. However, if you want to deposit fiat currencies to fund your account, you’ll have to provide some documents for identification first.

You can always try decentralized exchanges such as LocalBitcoins where you sign up using your email address, at least for the time being as the exchange is planning to include mandatory KYC checks soon.

Buying Bitcoin OTC (Over-The-Counter)

All of the above-mentioned options for buying Bitcoin are suitable for small to medium purchases, i.e. under $100,000.

If you’re an institutional investor who doesn’t want to “crash” the market by placing an order for large amounts on regular crypto exchanges and doesn’t trust in the strength of their security features, you should use an over the counter broker with high liquidity to be able to execute your order at once, faster than traditional exchanges ever would.

The most popular over the counter brokers at the moment are Circle, ItBit, and Genesis.

How to Store Bitcoin

Bitcoins are digital currencies with no physical form outside the digital space, so you can’t just purchase them and put them in your regular wallet. You need a suitable digital wallet (a cold storage wallet) that instead of BTC coins stores the encrypted private key that gives you access to your BTC balance.

Even though you’ll find plenty of options online, either on crypto exchanges or third-party providers, we at Crypto Head believe that none of them are immune to scams and cyber threats. Instead, we recommend investing in a hardware wallet.

The hardware wallet is like a USB stick, easily portable and ultra-secure. It stores your private key offline and, by remaining disconnected from the Internet, this wallet can’t be affected by any malware.

Our top three recommendations are Ledger Wallet Nano S that supports the most cryptocurrencies, has a reasonable price, and Ledger technology to keep it safe; Ledger Wallet Blue, a more expensive wallet that runs on the same firmware as Nano S but provides an unsurpassed level of technological security, and Trezor, the first Bitcoin hardware wallet that although a bit dated, fares well for the price.

Hardware wallets might be new on the market, but their record has been spotless so far. Even if you lose your wallet somehow, you can still get your coins back if you keep the recovery phrase generated during the activation process.

Frequently Asked Questions