Ethereum is a form of money but to get your hands on it, you need to exchange it for fiat money. Think of it like going to a foreign country. You first need to exchange your dollars, Euros or Yens for that country’s currency. Exchanging fiat money for a cryptocurrency is not a complicated process. However, it depends on your country’s financial system. If the payment modes in your country are slow and expensive, the process of buying any cryptocurrency will be equally slow and expensive.
Fast payment modes will result in a fast and easy buying process. If you are looking for reliable payments methods for buying Ethereum, then take a look at the following options.
When some people think of cryptocurrencies, they associate them with illegal activities and the dark web. Therefore, they cannot imagine using a bank transfer to purchase these digital assets. However, it is very much possible. All you need to do is to transfer the funds to the seller, who will then send you the ether coins as soon as the payment gets processed. However, a bank transfer is a slow method of purchasing altcoins because you have to wait for one to two days for the funds to be processed.
This is the most common payment method for most online transactions involving fiat money. Unfortunately, most cryptocurrency exchanges and vendors do not accept credit card payments. The reason behind this is the issue of chargebacks. A malicious buyer might pay for ether tokens or other coins using his credit card and then demand a refund from the credit card company with the false claim that they never got what they paid for.
Cryptocurrency transactions, on the other hand, are irreversible. This means that the buyer would get free coins. Credit cards also pose the risk that someone might use a stolen card to pay for the cryptocurrency. Despite all this, there are exchanges that accept credit cards. However, these exchanges sell their ether at a significantly higher price.
This is another popular mode of making online payments although not accepted by most cryptocurrency exchanges. The reason behind this is similar to that of credit cards: chargebacks. Like credit cards, exchanges that accept PayPal payments tend to charge more for Ethereum and other cryptocurrencies.
Other payment channels
There are other online payment platforms such as Sofort, iDEal, Skrill, and so on. The list of online payment providers is endless. Different payment methods are accepted on different exchanges. You will need to research whether a given exchange accepts your preferred payment channel or not.
Ethereum private payment channels
These channels allow the buyer to pay the seller directly, without going through an exchange. They include payment methods like hard cash, Paysafecard, and Western Union. Some exchanges, such as LocalBitcoins, connect people in the same geographical region. They can then decide on their own private payment channels. Paying for ether coins through private channels is usually cheaper than the other payment methods.
So far, you have set up a digital wallet and decide on your preferred mode of payment. Now you can go ahead and purchase your crypto coins. The question is, where and how do you buy them? There are several ways of purchasing Ethereum and other cryptocurrencies. The most common include:
These are a great option for people who intend to frequently purchase large amounts of cryptocurrencies and want fairly good prices. Exchange platforms perform the role of an escrow. They hold both cryptocurrencies and fiat money. You can either sell or buy on an exchange platform. The processing of orders and trades is handled by the exchange engine.
The main advantage of exchange platforms is that they usually have minimal spread and transaction fees. The disadvantage is that creating an account with an exchange platform can be a complicated process and may require you to disclose information that can be used to identify you. They are not a very good option for those who want to remain totally anonymous. You will also have to trust the exchange platform with your money.
Brokers and direct commercial exchanges
These work in the same way as the money exchanges in airports. The only difference is that these are online. Their business is the buying and selling of cryptocurrencies. Purchasing Ethereum through direct commercial exchanges is a fairly simple and straightforward process. Simply go the exchange’s website, choose your preferred mode of payment, enter your wallet address, make the payment, and receive your coins.
Some of the exchanges, such as Coinbase and Circle, will even help you create a digital wallet in case you don’t have one. Commercial exchanges provide one of the simplest and fastest ways of purchasing cryptocurrencies. Many also allow you to pay using PayPal and credit card. However, you will have to pay an extra fee for the privilege of using these payment methods.
These are online platforms where cryptocurrency buyers and sellers meet, interact, and trade. The main advantage of P2P marketplaces is that their transaction fees are relatively low. Cryptocurrency prices are determined by market liquidity. This makes it possible for buyers to buy cryptocurrencies such as ether at fairly low prices.
A good example of a P2P marketplace is LocalBitcoins, which is a very popular worldwide platform for Bitcoin buyers and sellers. LocalBitcoins connects buyers and sellers in the same geographical location and allows the buyer and seller to decide on a mode of payment of their choice.
Gift cards and vouchers
Vouchers and gift cards are an easy way to anonymously buy any digital asset. All you need to do is visit a shop in person and buy the voucher, which has a specific code on it. From there, you will visit a given website and enter the code from the voucher and your digital wallet address. This will transfer the specified amount of Ethereum, bitcoin or any other crypto coins to your wallet. The downside of using vouchers is that the exchange rates are considerably high.
If you are looking for anonymity, this is the best way of purchasing Ethereum. It is also very easy. Cryptocurrency ATMs look like the regular ATMs you are used to. However, they are not linked to a bank. Instead, they are connected to the internet.
To purchase coins from a cryptocurrency ATM, all you have to do is indicate the number of crypto coins you want, enter your wallet address, and feed the ATM with some hard cash, equivalent to the number of cryptocurrency coins you want. The coins will be immediately sent to your wallet. With some ATMs, you will even get a paper receipt. The only disadvantage of cryptocurrency coins is that they have some of the highest exchange rates and transaction fees.
There are several payment methods and ways of buying Ethereum. Each method has its own advantages and disadvantages. For instance, PayPal is simple to buy coins with but the double spending setback makes it costly. Credit and debit cards reveal your identity. So, make sure to go for the method that appeals to you. Stay up to date with our blog.