Best Payment Methods for Forex Brokers! Pros and Cons Uncovered

Forex brokers may be quite familiar with the following situation: the efforts of your sales team finally resulted in an investor who was 100% ready to deposit a certain amount, KYC procedures were done properly, and you were sitting in front of your dashboard waiting for the numbers to appear. However, instead of numbers, you ended up with seeing the infamous "Transaction Declined" popping up on your screen.

It is said that this "accident" can happen more than 13 times a day to some brokers. As such, there is a growing phenomenon in the finance world that forex brokers are trying to offer alternative payment methods that are convenient, secure, and hassle-free. Take easyMarkets, an award winning global broker with access to 200+ markets as an example. The firm provides a total of 20 different payment methods for its clients to fund their accounts, which are as follows:

As shown above, on the whole, payment methods can be categorized into three different types — Credit/Debit cards, Bank transfer, and eWallet payments. This article will review the pros and cons of these payment methods forex brokers usually offer from a couple of different perspectives.

Credit/Debit cards

Credit or debit card deposits are usually favoured by both brokers and traders due to the following advantages:

· The processing time of Credit/Debit cards payment is usually within the same working day, enabling instant access to the live markets.

· It is easy to incorporate credit card payment processors and accept all types of card brands due to its global reach.

· Credit/Debit cards payment ensures easy, secure, & cost-effective deposits with highly sophisticated and secure payment portals.

However, there are, of course, some downsides making deposits or withdrawals using credit or debit cards. They are:

· The amount of money clients want to deposit will depend largely on the limits set by brokers' trading bank.

· Some credit cards operate on the traditional credit card payment platform and may involve interest rates, fees, and other costs of transactions while making a Forex deposit.

Bank Transfer

Bank transfers offer a sense of security. Traders who may be depositing large sums of capital may prefer this method. Strengths of this type of payment method are:

· It can be used for settling debts and for making payments to third parties.

· New types of payment systems for Bank transfers can satisfy the ever-growing need for reducing the disparity between the forex broker and the trader.

· A bank transfer does not impose any maximum transaction limit.

· It's easier to satisfy regulatory requirements and meet all Anti-Money Laundering laws through bank transfers.

Disadvantages of Bank Transfer are:

· There is large delay in sending and receiving funds using Bank transfer.

· The cost of Bank transfer transaction is significantly higher than other forms of payments, which can cost as much as 10% or more of the transaction amount.

eWallet Payments

Today, this type of payment is growing in popularity at a fast rate because it has a lot of positive sides including:

· It's easy to use.

· The cost of transactions is low.

· It only takes a short time to complete transactions.

List of the Disadvantages of eWallet Payments:

· It is not fully available worldwide.

· It requires careful management to avoid security risks.

However, in recent years, central banks and regulators around the world have continued to issue strict guidelines for e-wallet license holders. All e-wallet providers are heavily regulated. Additionally, e-wallets require six-digit PIN or biometric authentication such as fingerprint or irises before a transaction can be done. This authentication makes eWallet payment just as safe as bank transfer and cards payment. Moreover, It is estimated that there are over 2 billion smartphone users worldwide! Many of these people keep their smartphones with them wherever they go, making ewallets a really convenient way to pay.

Number of smartphone users worldwide from 2014 to 2020 (Source: Statista)

Due to its growing adoption, flexibility, and low cost, eWallets, though a relatively new idea, are becoming one of the most popular Forex trading deposit methods. A large number of top Forex brokers now offer instant deposits and withdrawals via eWallets. There are a number of well-known eWallet payment methods including Paypal, Moneybookers or Skrill, Neteller, CashU, and Webmoney. To find out more about these and other payment solution providers, please visit Fazzaco's Directory.