Recently, the news said that PayPal would enter the digital currency market, and sure enough, I logged into my U.S. PayPal account recently, and I can indeed buy and sell cryptocurrencies now.
Currently, the digital currency trading feature is known to be available only for U.S. PayPal accounts. PayPal accounts in mainland China and Hong Kong cannot access this feature, and the situation for European PayPal accounts is unclear. The available cryptocurrencies for purchase are Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, with a minimum purchase amount of $20. For those not involved in digital currencies, I will share my experience of registering and using a U.S. PayPal account. Real-name identity verification is required for U.S. PayPal accounts. To unlock all features of U.S. PayPal, you must complete real-name identity verification, which can only be done using an SSN or ITIN. A fully verified PayPal account has the following features:
- Incoming payments can remain in the PayPal balance and can be withdrawn or used for purchases.
- PayPal Cash feature can be activated.
- PayPal Key virtual credit card can be obtained.
- Buy and sell digital currencies.
An SSN, as an identification number for Americans, is generally not easy to obtain, while an ITIN is suitable for non-U.S. residents without an SSN. There are many online tutorials for obtaining an ITIN, but the process can be quite cumbersome and time-consuming, and there's no guarantee of success. Instead of wasting valuable time on this process, it might be better to spend some money to hire a professional accountant to handle it. Here, I recommend a Chinese accountant in the U.S. who provides services such as notarization of Form 1583, U.S. company registration, and ITIN application, and can communicate in Chinese. I have done business with her several times, and the feedback from others has been all five-star reviews. Here is a direct link to her Fiverr store.
As for my experience with registering and using a U.S. PayPal account, my account has been functioning normally for over two years, mainly used for receiving advertising commissions and part-time sales payments. It has been a valuable asset for me. For friends engaged in cross-border business, I highly recommend registering for a U.S. or Hong Kong PayPal account; if maintained well, it is particularly useful. Financial accounts are very sensitive, and if you're not careful during registration and use, you may face risk control or even account suspension. Below are some summarized key points for reference; the registration process is straightforward, so I won't include screenshots.
Key points for registering a U.S. PayPal account:
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A clean and stable U.S. internet environment. It's a big taboo for financial accounts to log in from various locations in a short period, as this may be mistaken for account theft and lead to freezing. Try to maintain a stable login from the same location for a long time. You can purchase a Windows server with a U.S. line from a server provider, such as Ucloud in China. I recommend Kamatera VPS (the better, the more quality IP resources). They provide U.S. data center lines, which are relatively niche, with fewer users, and the IP addresses are relatively clean. New users can try it for free for a month, and after normal use, the price is also reasonable and can be billed hourly. After connecting to the server via remote desktop, open the PayPal website, and the address displayed in the browser's address bar should be https://www.paypal.com/us/ to ensure you are registering a U.S. account. Then just follow the steps to fill out the information. The entire process from registration to later use is done on the Windows server, which is dedicated to maintaining the PayPal account.
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A clean U.S. phone number. Google Voice works, but most other virtual numbers do not. A physical SIM card is best to ensure this number has not been registered with other PayPal accounts. If using a physical U.S. SIM card, try to find a reliable one that can be held long-term and is familiar with the number retention policy. For example, if you register an account using a previously canceled Lycamobile number, you may encounter issues receiving SMS for verification. Either do not enable two-step verification or ensure the phone number is reliable. For account security, it is still recommended to enable two-step verification after registration, and you can also add multiple U.S. numbers to PayPal for extra safety.
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A reliable U.S. address. Based on summarized experience, it is not advisable to randomly find a U.S. address on the map. Instead, use a dedicated U.S. virtual mailbox private address. In one scenario, when shopping on U.S. e-commerce platforms, some merchants have enabled AVS address verification. If you use a forwarding company's address for delivery, and the PayPal account is registered with this address, the Bill Address and Shipping Address will be consistent, which can reduce the chances of order cancellation to some extent. In another scenario, if you encounter PayPal risk control, you can try using a scanned copy of the bill from a U.S. digital bank card obtained through this virtual mailbox or envelopes from EIN or ITIN applications sent here as proof of U.S. address to lift the PayPal risk control.
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A U.S. credit card or bank account. U.S. PayPal has an AVS verification mechanism and can only link to VISA or Mastercard cards with billing addresses located in the U.S. If you do not have a physical U.S. credit card, you can use a U.S. virtual card, which can be linked to PayPal and used for payments without issues. This virtual credit card has a billing address in the U.S. and can be modified, allowing you to set it to the forwarding company or virtual mailbox address used during PayPal registration.
After long-term use, do not casually change the main email address, personal name, or other information, as this can lead to issues. For example, I once encountered a situation where my balance was frozen after changing the main email address. I suspect this is because PayPal considers it a new account after changing the main email, and previous transaction records become invalid. Without a good transaction history, new payments may be restricted and temporarily frozen before they can be withdrawn.
Receiving and withdrawing money with U.S. PayPal:
A U.S. PayPal account does not require mandatory identity verification by uploading identity information by default. Linking a credit card or bank account is also considered a basic form of identity verification. Accounts that have not undergone complete identity verification remain in a pending state when receiving payments and can only withdraw directly to a bank account; they cannot remain in the PayPal balance or be transferred or spent. My approach is to link a checking account from HuaMei Bank Velo, which works fine for receiving PayPal withdrawals through ACH with no fees, generally arriving the next day. Previously, a friend linked a U.S. account assigned by a cross-border payment platform, but it seems that it can no longer be linked; only a traditional bank account works better.
Do not use a PayPal account for foreign trade transactions involving counterfeit goods, as this will definitely lead to risk control, account suspension, and frozen funds. Always use the account legally and compliantly. When receiving payments from strangers, it is recommended to create a PayPal Invoice to request payment. The invoice should use detailed English descriptions of the payment reason to serve as mediation evidence in case of disputes. If you are building an independent e-commerce site to sell virtual goods through PayPal, you can refer to a case where a seller won against a buyer's malicious refund for virtual goods to avoid pitfalls.
If the number of payments received exceeds 200 times or the total amount reaches $20,000 within a year, you will receive a 1099 tax form from the tax bureau, and you will need to file taxes.
Using a virtual card for consumption on U.S. PayPal:
If you have a bank card with a U.S. billing address, that is the best option, as you can link it directly for purchases.
If you do not have a U.S. card but have a U.S. checking account that supports Direct Debit, PayPal can also directly deduct from that account.
Due to a separate verification system for American Express cards, U.S. dollar-denominated American Express credit cards issued in China can be linked to U.S. PayPal accounts, but they may not always work for payments.
Newly issued U.S. virtual credit cards can also be linked to PayPal for consumption for a period, but since virtual cards can be issued in bulk, they may be abused by some users, so long-term successful payments on PayPal cannot be guaranteed.