Why can‘t I use PayPal with Steam?

As a fellow gamer, I know how frustrating it can be when a payment method doesn‘t work on Steam. I‘ve been there! So why exactly are there issues using PayPal balances on Steam purchases? Let me break it down for you.

The Technical Limitations

Steam cannot process direct payments from bank accounts linked to your PayPal balance. When you go to check out on Steam with PayPal, it tries to pull funds from those bank accounts by default. And Steam isn‘t set up to accept those kinds of payments.

Instead, Steam‘s infrastructure is designed around processing credit card payments or Steam wallet funds. So the platform gets confused when PayPal sends it bank account info rather than credit card details during checkout.

High Digital Goods Chargeback Rates

This problem persists in part due to the high fraud and chargeback rates associated with digital goods transactions. Chargeback rates on intangible purchases can be over 90% higher than physical goods.

So PayPal and merchants like Steam put extra verification checks in place on these transactions to minimize risk. But it also blocks many legitimate purchases in the process.

PayPal Balance Limitations

PayPal also seems to implement some limitations specifically around account balances:

• Restricting certain digital goods or large purchases from balances
• Freezing payments it deems higher risk until bank account ownership is re-verified

As fellow gamers, we get caught in the crossfire here. These policies aim to stop fraud, but also make our lives difficult!

Solutions and Workarounds

So what options do we have? Here are the main ways to integrate PayPal with Steam that avoid these balance restrictions:

PayPal Credit Cards

Linking a PayPal debit or credit card, including virtual ones like PayPal Key, instead of straight bank transfers.

Steam Gift Cards

Using PayPal to buy Steam wallet gift cards and redemption codes to add funds.

Friends & Family

Sending PayPal payments to a friend who gifts games or wallet funds to your Steam account after.

I walk through exactly how to do these further down.

How to Use PayPal on Steam Step-by-Step

If linking a bank account directly with PayPal isn‘t working to fund Steam purchases, try these methods instead:

PayPal Credit/Debit Cards

PayPal allows you to generate virtual credit cards to use almost anywhere online.

1. Link an eligible credit/debit card to PayPal, even virtually via PayPal Key.
2. Use that linked "Credit Card" option when checking out on Steam.
3. Bypasses balance restrictions and allows easy 1-step checkout.

Downsides: Needs a backup funding source, but a great option if you have a eligible card.

Steam Gift Cards

When purchased as a gift for yourself, wallet codes let you turn PayPal funds into Steam credits.

1. Buy a Steam digital code via PayPal from retailers like Amazon, Walmart etc.
2. Redeem code under Games Menu > Activate a Product on Steam
3. Wallet funds appear and bypass restrictions

Easy source of codes, but need to buy ahead instead of 1-step checkout.

Friends & Family

Have a friend with Steam? Send them PayPal funds to gift you games or wallet codes.

1. Use PayPal balance to pay a friend you trust
2. They gift game or funds to your Steam account
3. A bit awkward, but avoids restrictions

Reliant on others, but works great within a gamer friend group!

The Case for More Payment Options

While PayPal and Steam‘s restrictive policies aim to combat payment fraud, they also hurt consumers in the process.

As a passionate gamer, I believe we need to collectively call on merchants like Steam to expand secure payment options. That includes:

• Direct bank account verification
• Prepaid/gift card top up abilities
• Additional digital wallet support

Tools exist to authenticate customer IDs and bank account ownership behind-the-scenes today. I urge Steam to implement options like Plaid to securely enable PayPal balance and other payments while still preventing fraud.

Because ultimately, more payment choice allows more great indie games to get funded while letting us play even more. And that’s a future any gamer can get behind!

Let me know your thoughts in the comments. And if you found this post helpful, don’t hesitate to share among fellow PayPal/Steam users in need!