You can’t trade with money you don’t have, so you have to think about how you are going to get your money to the Forex broker before you can go short or long. Below are the top 3 fund transfer solutions accepted by Forex brokers, and more less common alternatives.
This is among the top payment system used for fund transfers in the Forex industry, and you will find most Forex brokers accepting Skrill for depositing and withdrawing funds. In structure, Skrill operates like any other payment service provider, for example, PayPal.
It has its headquarters in the UK and is also regulated by the FCA. The parent company is the Paysafe Group, which is the parent company of Neteller, which bought Skrill for €1.1 billion in 2015 from CVC Capital Partners. It was created in 2001, 3 years after PayPal, and although it isn’t as big, Skrill is still a favourite among Forex traders.
What sets Skrill apart from PayPal is that it is less restrictive, allowing clients to upload and withdraw funds to their skrill account from numerous countries. For example, PayPal only recently got into the African market, yet Skrill had been active there earlier.
They also offer a prepaid MasterCard which can be used for withdrawals at any ATM in the world. The prepaid card is linked to your Skrill account, and you can easily withdraw funds without having to do so through the bank.
A subsidiary of the Paysafe Group, Neteller is the biggest rival to Skrill, and just as popular among Forex traders. Just like Skrill, it too is favoured because of their non-restrictive policies and also their prepaid card Net+. This card is also MasterCard branded, allowing holders to make withdrawals in many areas around the world.
Compared to Skrill, though, Neteller does not have as much annual revenue, and this is because of their forced exit out of the US market. Now, with both subsidiaries being owned by the same parent company, most of their services are similar and it is possible to transfer funds from one to the other system, although at a fee.
This is the easiest way to fund or withdraw from your Forex account because we all have either a credit or debit card. Whether you have a Visa or MasterCard, you can use your card to make transactions. Besides the fact that it is widely available, transactions are instantly processed, just as you would experience when paying for products.
Use of these cards has the advantage of reduced costs, since both Neteller, Skrill and other payment service providers charge a fee. By using your credit/debit card, you can bypass this fee, although your bank may deduct some fees of their own. On the other hand, this system is not perfect. For one, there are still several brokers who don’t accept credit/debit cards for transactions, so, the system is not as widespread as Skrill and Neteller.
Then, there is also the obvious risk of credit card theft. The good news is that the Forex brokers that do accept cards have put in a measure to curb this. When you first request to use your credit/debit card for fund transfers, you will be asked to send an image of the card and enter the card number. Subsequent transactions will not require re-entry of this information, keeping your card data safe. Therefore, you only have to be really careful that first time you make the request.
Besides the above top 3 fund transfer systems by Forex traders, you can also use:
- Bank transfers – transactions may take longer, but they can handle more than most payment service providers
- Bitcoin – this has only recently become common, and more brokers are embracing the cryptocurrency
- WebMoney, FasaPay, etc. – these are all payment service providers with their own unique services which may appeal to specific people. Nevertheless, the service is still the same