What Affects the Choice of Deposit Methods in Forex Trading?
It should be something very simple and fast, you want to fund your account, so you get some money to the broker. So why can you just pay with whatever web money account you have and fund your account.
Well for a payment method to actually be able to work in this industry it needs the following.
- Acceptability: if only a few people or even a few brokers work with this payment method then it simply will not work. It needs to be recognized around the industry as a viable solution.
- Security: The payment method should guarantee security of the funds, especially in the process of movement. This sounds like an AC but is actually most of the time the issue, as moving money from country to country has become harder and harder as the banks do not really want to let go of their money. The payment method must have several layers of security to secure the payment details and identification data of users.
- Legality: The payment method must be legal. The issue of identification of all users of a payment system using a Know Your Customer (KYC) process is now a global standard. Tis was not always the case and now with cryptocurrencies entering the picture we enter a new are
What Influences Your options when selecting Forex Deposit Method?
Some traders have all the options available to them where as other only are able to select one or maybe 2 options, why is this ?
Why is one trader able to choose and the other is not. Well this depends on the following factors
- Country of Origin
- Security Issues
- Ease of transactions
- How Much is Being Deposited
- Chargebacks and refunds
- Deposit methods history and reputation in domestic country.
Every country has its own set of rules as how much traders are able to transfer to their trading account, and the differences here can be huge, not only are these differences per country but sometimes even per state.,
For example, in Canada there is a huge difference between British Columbia and surrounding states, simply because of the local government. And for country this is not different. People from Argentina it is very hard t impossible to transfer the funds but across the border in Uruguay this is very simple and fast. This makes that people close to be border will skip their neighboring country to fund an account.
At the same time not, every country has open access to global financial systems. Some countries are under international sanctions (North Korea), while some are known hotbeds for terrorism and drug peddling and therefore are restricted from having access to payment systems where it may be difficult to provide continuous tracking of who owns the money.
So, there is really a huge difference between countries and for those that live in the country with harder restrictions there are no other alternatives available then the payment methods offered by the broker for that country, most of the time this is just wire transfer and maybe credit card.
Some payment methods tend to have better security than other payment methods. For instance, the use of bank wires ensures that money is routed through bank accounts where proper KYC documentation has been collected and the identities of those operating the accounts are known.
Some of the brokers put their own restrictions on the methods in accordance to the country. in countries where there is a lot of credit card fraud it is simply too risky for them to offer this solution to their traders and thus will allow only the bank transfer for reasons written above.
Chargebacks and Refunds:
Refunds and chargebacks are becoming a very important consideration for forex traders who live in countries where the use of credit cards is very common.
If there is an issue, then this country has better measures in place to deal with it and the banks are better prepared. So if someone then uses your card without your permission it will be easier (I did not say easy) to get a chargeback and refund for unauthorized transactions.
If a trader needs to make repeat deposits, the credit card and digital wallet systems are the preferred payment methods. If this trader needs to do this through the bank every time, then the amount of work to get the money to their account makes it almost not worth it.
Online wallets simply will speed up the process and make it for repeat payments a much better solution.
Ease of Transactions:
The world has gone Mobile and so also the forex and cryptocurrency broker. it is easy and fast to make all these transactions through the phone and some payment methods actually see this as their flagship service for example Skrill)
Reputation of the Payment method.
As we can see in some countries there is a local payment method that everyone knows and trust and since people are habitual animals they would love to stick with these methods. Still in the end the bank should be willing to transfer the funds to these methods and all too often they are not willing to do this because of questionable reputation of the payment method.
So even if it is available in your country it does not mean that you can for sure use it
Different forex & Cryptocurrency trading platforms offer their clients different deposit methods. The good platforms usually have more than one way in which individuals can deposit money into their accounts. Some of the most common methods through which different platforms allow deposits include:
deposit with visa
Deposit with Mastercard
Deposit with Amex
Deposit with Neteller
Deposit with Webmoney
Deposit with Moneybookers / Skrill
Deposit with CashU
Deposit with Clickandbuy
Deposit with Carte Bleue
Deposit with ACH E-check
Deposit with Alertpay
there are many more options but these are the most common ones.
Brokers Deposit Methods | Bank Wire Transfers.
Bank wire transfers involve the direct movement of money from one bank account to the trading account without actually handling the money. It is one of the easiest modes of transfers that exist in the market. The fact that bank transfers can be done remotely makes this one of the safest transfer modes. In addition, the banks keep a record of the transaction, which can come in handy when a problem arises.
Bank transfers can also be domestic or international depending on the platform and what it allows. In this way, you can make international transfers with only a few clicks of the button.
Brokers Deposit Methods | Credit Cards.
There are various credit cards in the market that allow their clients to make deposits into their trading account. Credit cards such as Visa, American Express and MasterCard are especially popular among Forex traders. This is because these cards have a larger worldwide appeal that makes them easy to use, not only in depositing, but also in the transfer and withdrawal of money. In addition, a larger majority of the American public have access to these cards, providing the perfect platform for depositing money. In the Forex market, virtually all the brokers accept the use of credit cards.
Brokers Deposit Methods | Electronic wallets.
These are websites that allow you to make transactions on different platforms. Under this category we have websites such as WebMoney, Moneybookers and PayPal. They work in much the same way as your wallet, only they and electronic and can be accessed by getting online. Electronic wallets are increasingly becoming popular since they provide transactional advantages much like the banks do. You can also use other electronic money transfer services such as Western Union; however, the use of Western Union has to be with a legitimate broker. The platforms are designed to make transacting easy for the traders in the market and the use of these different depositing methods only increases its allure among its user.
Brokers Deposit Methods | Wire transfer.
This is often classified as a separate deposit method that allows you to move money through different institutions. Wire transfer allows you to operate between the electronic wallets, credit cards and bank accounts seamlessly. For instance, you can transfer money from a PayPal account to a bank account and back to a trading account without much fuss.
However, it is important to note that most of the operators will charge you for wire transfers. As such, you should be ready to cover the cost of such a transfer.
These options are usually preferred since they are more secure and easy to access, making the platforms easy to use. Different platforms will often provide different deposit options, you should choose a platform that makes your work easier.
has now also a new options through cryptocurrencies, where you are able to to deposit to your account through Bitcoin or other cryptocurrencies.