PayPal's 72-Hour Lock and Hidden Fees Hinder Ethereum Purchases in Germany

In Germany, buying Ethereum with PayPal is not as straightforward as it seems. PayPal does not trade crypto-assets in the country, but it can be used as a deposit route at a crypto exchange. This means that to buy Ethereum, you first need to deposit euros into the exchange using PayPal, and then use those euros to buy Ethereum.

One of the quirks of this process is that the fee for using PayPal appears only on the final confirmation page. The minimum deposit amount is 1 euro, and the deposit is credited almost instantly, but there is a 72-hour withdrawal lock on the account. This means that for three days after making a deposit, you cannot withdraw your Ethereum.

The 72-hour lock is intended to mitigate chargeback risk, which is the risk that a PayPal payment can be disputed after the fact. If the coins bought could be withdrawn immediately, the exchange would be left without any counter-value in a dispute. This risk is higher for PayPal deposits than for SEPA transfers, which have no lock.

When calculating the cost of buying Ethereum with PayPal, it's essential to consider the spread, which is the distance between the market price and the price displayed to the buyer. This spread can be significant and is not always clearly disclosed.

Using the figures from Kraken, a popular crypto exchange, we can calculate the cost of buying 100 euros' worth of Ethereum via SEPA, debit card, and PayPal. The results show that, via SEPA, the full 100 euros arrive in the exchange account, but via PayPal, the deposit fee is not known beforehand, making it difficult to estimate the actual cost.