P2P Binance – P2P means Peer-To-Peer. To understand better how P2P works in Binance, we will break down in the simplest manner. Many Binance users prefer using P2P Binance trading as it’s a more cost-effective way to buy cryptocurrencies. This is because they are able to enjoy zero trading fees and avoid paying fees that are chargeable by their credit/debit card or banks.
How P2P Binance Works
If you have travelled before, you know that you’ll need to go to a local currency exchange to exchange for the currency you need to use. When choosing your go-to currency exchange, you’d check for the best exchange rate that they have to offer you before committing your purchase.
P2P Binance trading has a very similar concept. You’re exchanging fiat currency (government-issued currency) on Binance’s P2P Marketplace for the cryptocurrency that you want through another existing Binance User.
Binance considers this Binance User as a seller on their P2P Marketplace for providing cryptocurrency exchange service to you. The seller sets the exchange rate for the cryptocurrency they want to sell to you, and the settlement of payment will be according to what was stipulated on the terms of exchange. Because of the variety of payment methods that can be available, it’s considered highly accessibly for anyone who use P2P Binance.
While you are making the payment for the cryptocurrency that you want from your seller privately, Binance acts as an escrow service a trusted third party, between the seller and the buyer to make sure the transaction is safe & fair.
Accessing P2P Binance
In case you’re unable to find where P2P Trading on Binance App, you can access P2P Binance on with the “More” Button on Binance Home Page.
Trading Safely Via P2P Binance
Here’s what you need to know about trading safely on P2P Binance. There are things that you’d want to look out for when you’re shopping around for a reliable seller to complete your P2P trade.
- Exchange Rate
- Verified Merchant
- Verified User
- Method of Verification
- No. Of Completed Trades
- Completion Rate
- Average Release Time of Funds
- Average Pay Time
- No. Of Positive Feedback
You’d need to make sure that you’ve selected the right currency based on where your country of residence.
In the screenshot above, we’ve selected USDT as an example for this P2P Trade. The intend is to buy some USDT so that we can start trading cryptocurrencies in USDT pairs. (For Example: BTC/USDT, ETH/USDT,MATIC/USDT)
Stable Coins like USDT are digital currencies that is pegged to a “stable” reserve asset like the U.S. with a value ratio of 1:1.
1 USD : 1 USDC
1 USD : 1 USDT
1 USD : 1 BUSD
If you were to click on the seller, you should be able to see more in-depth details on their trade performance, how successful their trades are withthe other buyers and if the buyers were happy with their experience. You can see from the screenshot above that no 2 sellers are the same, and they have the different ratings.
It’s also crucial for you to do your due diligence to make sure that the seller is a reliable one.
Once you’ve chosen your preferred seller, ensure you’ve read the seller’s terms thoroughly before clicking on “Buy” button to initiate your purchase. Know that not all terms are the same for the other seller’s on P2P Binance, the above is just an example for illustration purposes only.
The currency that we’re using is Singapore Dollar, you might be using different currency. So do double-check on the amount state on your end, it should correspond accordingly.
Once you have clicked on the “Buy” button, you should be able to see the Pending Payment Screen.
Word of advice: Alway start a conversation with your Seller before initiating a transfer. Any terms that are unclear to you should be sorted out prior to any transaction so that both parties have a mutual understanding and a smooth transaction.
After which, You’ll need to complete your transaction with your Seller within the stipulated time as shown via the payment method you have selected. Communicate to your seller and send proof of transaction via Chat Inbox and click “Transfer The Fund”
At this point, your seller might conduct a virtual KYC verification to ensure that he/she is transferring to a correct person. KYC verification can something like placing your ID card side by side to your face, via video call or sending a picture of your ID card to the seller.
This verification process can be uncomfortable for some people, but its essential for security reasons. Remember, mask your ID number and other sensitive information except for your name, as they use your name and your face to make the confirmation.
Check Your P2P Wallet
Whenever your (buyer) order is placed, Binance will automatically transfer the funds from the seller’s wallet to your P2P wallet.
This process is fairly quick. We managed to receive our funds in our P2P wallet under 3 minutes as soon as the seller confirmed the transaction. You might receive confirmation SMS from Binance as well.
The final step is to transfer your assets from P2P wallet to your spot wallet so that you can start spot trading or if you prefer, USD-Margin Wallet for Future’s Margin Trades.
Pros and Cons Using P2P Binance
P2P Binance serves over 180 countries with about 150 different payment methods available at zero trading fees. Furthermore, arrangements are made with Binance acting as a secured & trusted third party escrow service between both seller and buyer.
There are downsides that are present for this set up, which is both seller and buyer have to communicate to complete the transaction. This is due to the fact that sellers have different terms when it comes to managing completed transaction according to the type of payment methods provided to the buyers.
P2P Binance is a great alternative where you can trade your crypto assets safely with another peer. However, there are always risks involved, and you should always mitigate those risks to protect yourself.
Our experience using P2P Binance has been a positive one and should you ever decide to invest, remember to do your due diligence and check the terms before initiating any transactions.
Are you looking for other options to purchase your cryptocurrencies? Checkout this article.
Disclaimer: These are not investment advice, restrictions may apply different depending on your country of residence. Proceed with care and at your own discretion.