PayPal was founded in 1999 by a group of developers, one of whom was the current CEO of Tesla, Elon Musk. PayPal quickly became one of the world's popular e-wallet platforms, enabling digital transactions in several countries. It was not long before forex brokers in select jurisdictions began to offer the PayPal payment channel to traders as an option to deposit and withdraw funds. These brokers became known as the PayPal forex brokers.
PayPal is a digital wallet that functions as a payment processor, enabling people to pay for various goods and services online. PayPal also has a digital wallet system that can be used to conduct payments and transfer money electronically.
PayPal has since been sold to eBay. Since this sale, PayPal has expanded the range of possible payments on its platform. One payment channel gaining popularity is the deposit/withdrawal transactions on forex/CFD trading platforms. PayPal offers fast deposits on FX platforms, concluding transactions in minutes. It is also a secure payment method which offers two methods for payments:
A) The PayPal e-wallet allows traders to add funds to their PayPal accounts using cards or bank wires. The PayPal e-wallet can send deposits to the forex brokerage account.
B) The PayPal card processing service allows traders to make payments directly using compatible credit/debit cards. PayPal's modus of operation places a premium on the security of transactions. This is why opening a PayPal account will come with account verification processes that match international KYC/AML standards. Operating a PayPal account requires linkage with the user's bank account. This is another layer of security as a bank does strict KYC/AML checks and conducts periodic customer verifications. Forex brokers also conduct verification of their clients. So before a PayPal payment ever gets to the forex brokerage account, you are looking at three layers of verifications before payments can go through. Security of transactions to brokerage accounts in a market with a $6 trillion turnover is a must, and PayPal offers this.
PayPal also offers a multi-currency platform, enabling users to transact in their own currency. The PayPal site has algorithms that conduct currency conversions, thus eliminating the need to go looking for foreign currency to transact with, as is the case when conducting bank wires. At the last count, PayPal supports 26 currencies on its platform.
As with several other e-wallets, PayPal is a payment processor that enables traders to fund their FX trading accounts using various payment channels. These can be classified into direct and indirect funding channels.
You can fund your trading account directly using PayPal. This can occur in two ways. The first method depends on if the forex broker has the official PayPal payment button on the deposit page. Clicking this button sends the trader to the PayPal payment page, where card details are entered to initiate a card payment. In this manner, PayPal acts as the card processing gateway. When the payment is concluded, PayPal takes the trader's funds and sends them to the brokerage in the trader's name. The broker will then fund the trader's account.
The other method of direct funding involves adding funds to your wallet on the forex broker's website by sending the funds from your PayPal account directly. Usually, a forex broker will provide an option to either deposit with your card on PayPal's card processing network or send the funds from your PayPal digital wallet. This second method will involve a login. When the trader selects the PayPal funding method on the website and clicks on this second option, the page will redirect to the PayPal login page. After a successful login, the payment page displays all the required details. The trader enters the funding amount and clicks the appropriate button to complete the transaction. This second method requires that the trader must have funds in the account.
The decision by PayPal to provide support for Bitcoin, Ethereum, Bitcoin Cash and some other cryptocurrencies has provided an indirect method of funding trading accounts on compliant PayPal forex brokers. If your country is among the supported countries, you can use the PayPal mobile to purchase the supported cryptos using your standard fiat-money method attached to your PayPal account. You may also transfer cryptos from an external wallet to your PayPal crypto wallet, then convert the same to fiat money for onward use in the direct funding method described above. This option is not available globally.
To transfer BTC from your PayPal wallet to an external BTC address (such as that of the PayPal forex broker), do the following:
To take a BTC deposit into the PayPal wallet, follow the process in reverse.
Some advantages of using PayPal as a funding method are already evident from what has been written. But to summarize them, they are as follows:
PayPal continues to stand out among the various e-wallets that serve the forex market. As an FX funding method, it continues to maintain its long-standing tradition of ensuring that all payments made on its platform are genuine payments from the account holders, made in a secure and safe environment. This is backed up by the potential to recover lost funds via a chargeback mechanism.
The brokers listed here are all PayPal forex brokers. They offer direct and indirect funding methods of transacting with PayPal. If you are in a country where PayPal offers full services, you could use these brokers to do your trading business.