PayPal is one of the most popular online payment methods serving more than 200 million active accounts worldwide and partnering with more than 7 million businesses. The service provider is licensed in Luxembourg as a credit institution. The main supervisory body monitoring the company is the Commission de Surveillance du Secteur Financier (CSSF). The company is also regulated by the Financial Conduct Authority in the United Kingdom (FCA).
The Payment solution provider will charge fees when receiving commercial transaction payments, converting currencies, processing a chargeback, withdrawing funds (for some countries), and using optional services like Mass Pay and PayPal Credit. International personal transactions at PayPal are charged with a 5% commission of the transaction amount. The minimum fee is 0.99 British pounds and the maximum fee is 2.99 British pounds. Receiving the payment is free. Withdrawals from PayPal balance are also commissionable depending on the withdrawal method. For Bank account withdrawals there are no withdrawal fees for eligible countries. For the US bank accounts, 3% withdrawal fees apply. Card withdrawals come with a commission of around 2.50 USD and it will vary according to the base currency of the PayPal account. The conversion fee at PayPal is 3.00% above the base exchange rate.
The major drawback of the system is that PayPal does not operate in quite a few countries on Asian and African continents. The countries where PayPal services are not available are Afghanistan, Bangladesh, Central African Republic, North Koreა, Ghana, Iran, Iraq, Myanmar, Pakistan, Sudan, Syria, Timor-Leste, and Zimbabwe.
PayPal is a common payment method used in the Forex trading industry, as well. PayPal processes over 10 million transactions daily which exceeds the transaction volume of the majority of the online payment systems. The swift execution of the transactions is what attracts numerous Forex PayPal brokers and traders to use PayPal payment services. At the moment, Forex traders are using PayPal payment system services in more than 150 countries.
As we already mentioned, PayPal is operating in more than 200 countries, covering most areas worldwide. Considering that, it will be no surprise that there is quite a big number of Forex brokers that accept PayPal as one of their main payment methods. Below, you can see the list of some of the most reputable brokerage companies available on the internet nowadays.
CySEC, FCA, ASIC
MT4, MT5, WebTrader
CySEC, CBI, FSA, FFAJ, BVI FSC, FSCA, FSRA
MT4, MT5, WebTrader, AvaTradeGO
Swedish FSA, Finansinspektionen
cTrader, MetaTrader 4, MetaTrader 5
SVGFSA, FCA, DFSA, FSCA, FSA
From 30% to 100%
Risk Warning: YOUR CAPITAL MIGHT BE AT RISK
FCA, CySEC, FSA
MT4, MT5, WebTerminal
ASIC, CySEC, FSA, BVI
WebTrader, MT4, TradingView
FCA, CySEC, DIFC, CIMA
WebTrader, MT4, MT5, IRESS
ASIC, SCB, CMA, CySEC, FCA, BaFin and DFSA
MT4, MT5, cTrader, TradingView
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
PayPal was established in 1988 in the United States. In 2002, it was bought by eBay and in 2007 it received a banking license from the Luxembourg government. Therefore, it shifted its headquarters and center of the EU operations there. However, one of the main headquarters still remains in California – 2211 North First Street, San Jose. The CEO of PayPal is Daniel Schulman. But, the company does not represent a wholly-owned subsidiary of eBay anymore since it split off from eBay in 2015. Afterward, the company began aggressive expansion as it acquired digital money transfer company Xoom Corporation and iZettle payment processor company in 2018, while recently also purchasing Honey Science Corp.
PayPal is regulated by the Financial Conduct Authority (FCA) in the United Kingdom which remains as one of the most influential financial regulators both in the European Union and outside. In the United States, PayPal is registered and authorized as a money transmitter on a state-by-state basis. After 2008, PayPal also holds a Luxembourg banking license and is authorized by the Commission de Surveillance du Secteur Financier (CSSF). In Singapore, PayPal holds approval from the Monetary Authority of Singapore (MAS). It also is regulated in Australia as an authorized deposit-taking institution (ADI).
PayPal offers both Buyer and Seller Protections guaranteeing the refunds in case transaction information mismatch with the intended purpose of the payment. The client funds at PayPal are legally termed electronic money and electronic money is equivalent to cash. It is a wise alternative to transferring physical money around the world. With its 30-year heritage, PayPal now is one of the leading Forex e-wallets that allows traders to easily transfer their funds from banking account directly to the trading balance. PayPal further allows you to send and receive funds in more than 22 currencies.
In the past, PayPal was mostly used for online services like buying products from online stores, paying customers and producers from overseas, etc. However, as the financial market started to develop, the payment system found yet another useful implementation. Now PayPal is known not only as of the safest payment method in general but also as the greatest way to make deposits and withdrawals. Thus, you may now notice that there are hundreds of CFD broker PayPal partners today.
Moreover, unlike some other payment systems, PayPal does not limit citizens outside of the USA to use its services. Thus, it is available for larger masses. All in all, the payment method provided by the company is regarded as the best on the market at the moment and that can be justified by a number of factors that will be discussed in detail shortly in the article.
As there are many options available nowadays, brokers need to evaluate the pros and cons of going with one payment system or another. Notably, as PayPal is the most used one, we analyzed what exact advantages does PayPal offers to Forex brokers and traders respectively and what are the limitations of PayPal in Forex trading.
Even though PayPal is easy to use, it might be a real struggle for Forex brokers PayPal to sign up with it. As it has a list of strict rules and policies the FX broker needs to obey before applying for PayPal service provision. Notably, those restrictions and requirements are targeted towards the international Anti-Money Laundering laws. Thus, if you see that the broker states to provide a PayPal Forex trading account, you can immediately understand that those guys are safe and reliable to trade with.
PayPal is not only the most reliable payment system but is also one of the most affordable ones. As it charges Forex traders with only 3%-5% of commissions. Furthermore, the maximum fee charged by PayPal cannot exceed 2.99 British pounds. The users are not charged for receiving the money on their accounts. Moreover, there also are some brokers that would make a refund for your PayPal fees on deposits, so as a result, you would be able to trade without actually paying any additional charges. For major banks, there are no withdrawal fees, as well, however, the fee might vary according to the residence country of a user. If you have at least $5 on your account, you can immediately start using their services.
While using PayPal to charge your trading account with money, you do not need to share your banking account details with the Forex broker. What this means is that all your private information is actually kept a secret between you and the payment system. The speed of transactions is the highest available on the market. Meaning that it rarely takes more than 24 hours for the money to be withdrawn or deposited on accounts of the Forex brokers with the PayPal payment option. Most of the time payments through PayPal take less than 30 minutes.
PayPal dedicates extra time and attention to its customers, therefore, clients have an opportunity to seek assistance at any time of the day or week. The platform has various contact information provided for the clients that include social networks, direct phone calls, toll-free numbers, e-mail resolutions, live chat assistance, and a call-back function. The assistance is available in more than 25 languages so that clients do not have to worry about language barriers.
Even though it seems like PayPal might be a perfect option for any Forex trader who wishes to withdraw or deposit money on his/her broker Paypal trading account, that is not entirely like that. Yes, PayPal is still the best option available in the current market. However, there are some aspects worth your attention.
That is actually the main issue associated with the PayPal payment system. As it does not enable its users to make any chargeback unless the transactions were made as payments for physical goods. And as Forex transactions are intangible, you won’t be able to transfer your money back to any of the accounts.
Many users complain about account verification issues. Since PayPal is extra careful with identity theft and related crimes, the platform is requesting several checks throughout the process of registration and verification of the account. The payment system will request your personal details and Individual Tax ID/Social Security number. It may ask for additional supporting documents to verify the data that you provide.
Despite the fact that PayPal is a supported payment method in around 200 countries, it still comes with several restrictions. For instance, in over 50 countries PayPal users can only withdraw money to US bank accounts and not the local ones. In other 50 countries, PayPal does not allow bank account withdrawals, at all. PayPal does not offer its services to residents of the following countries: Afghanistan, Bangladesh, Cameroon, Central African Republic, Cote D’Ivoire (Ivory Coast), Democratic People’s Republic of Korea (North Korea), Equatorial Guinea, Gabon, Ghana, Haiti, Iran, Iraq, Lebanon, Liberia, Libya, Monaco, Moldova, Montenegro, Myanmar, Pakistan, Paraguay, Saint Lucia, South Sudan, Sudan, Syria, Timor-Leste, Uzbekistan, and Zimbabwe.
Registering with PayPal is as easy as it gets. Similarly, Forex brokers with PayPal withdrawal options are usually easy to navigate across, as well. You shall not face any severe inconveniences while trying to deposit your money in the trading account or withdraw it to your bank account. However, first, you need to understand how the PayPal system actually works. The merchants, or retailers if you will, that are providing PayPal as an option for payment provision, are installing the online PayPal pages through POS outlets mainly. That’s what actually makes it so unique and different from any other payment method, as it is entirely online and you will find numerous stock brokers that accept PayPal, as well.
In order to ensure that the PayPal trading account won’t run low, the users, as well as Forex traders, are connecting it to their bank accounts. As you can only receive transfers from other holders of the PayPal account, you need to check with one of the members of the PayPal brokers list if they are offering the payments to be entirely made with your PayPal account. Notably, if the broker has it as the only existent way of payment creation, then you do not need to worry.
When it comes to withdrawals, things are really easy and understandable as well. The funds from your trading accounts will be charged to the payment method that was indicated initially. But you need to keep in mind that due to the modern Anti-Money Laundering laws, the funds might be transferred to the original payment method that was used to fund your Forex trading account. We present you with the step-by-step guide on how to register with PayPal and deposit funds on your broker’s platform.
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