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PayPal is an electronic payment, storage, and money transfer method that is operated by PayPal Holdings, Inc., which was owned by eBay Inc. from 2002 to 2014. It is currently one of the most popular online services for money transfers.

Basic accounts are anonymous and are based on the customer’s email address. But the credit card is required to add funds to the balance or to send payments to other customers.

Therefore is a convenient electronic payment system to use with some of the Forex brokers. Because all payments are instant, you can use your credit card without exposing it to anyone and there is a sufficient number of various brokers that accept it for funding purposes. Unfortunately, it does not allow residents of many countries to use its platform, therefore making its use pointless for the forex traders based in such countries.


With over a quarter of a billion active accounts, definitely it is the world’s largest digital wallet. It was launched back in 1998 as Confinity before merging with Elon Musk’s x.com. This company was renamed Paypal in 2001 and went public the following year. Since then it has evolved with mobile and web technology, making its options for transferring money even easier. In the EU, Paypal is registered and licensed in Luxembourg, having moved from the UK in 2007.

Paypal was not developed with trading in mind but, as its ubiquity has grown, so has the inevitability of traders wanting to trade with it. This had led to more and more brokerages accepting it.

Advantages of PayPal

There are strong advantages to trading with brokers who accept it:

  • Transferring funds with Paypal is recognized as being fast, reliable, and secure
  • It is easy to use, either on a desktop or through their app
  • Making deposits and withdrawals with it is generally very quick and certainly faster than bank transfers
  • Paypal accounts are easily linked to multiple credit cards, debit cards and bank accounts
  • It is recognized worldwide as a major eWallet
  • Paypal’s strong anti-money laundering restrictions give traders security and potentially enhance the reputation of brokers using it.
  • High maximum transfer and withdrawal ($60,000)
  • For forex traders, Paypal works in 56 different currencies
  • Free to open an account
  • No charges for unused account

Disadvantages of PayPal

However, trading with Paypal does have its disadvantages:

  • Charges on every trading transaction
  • FX fees (foreign transfer fees) are high at 4.5%
  • High transfer fees of between 4-12%
  • Although increasing, trading brokers that accept it are still relatively uncommon.
  • Chargebacks only apply to tangible/physical goods, meaning forex and CFD traders, etc. aren’t eligible.

Speed of Payments

As long as there is money in your account, or in the bank account linked to the Paypal account, funds for or from trading are generally transferred, if not instantly, then very quickly.


There are claims that trading with Paypal is actually safer than using your debit or credit card. Paypal stores your data in a ‘vault’, meaning that the other end of the transaction doesn’t receive any of your card or account details. In short, your privacy is assured.

Deposits and Withdrawals

The vast majority of traders, including all of those in the UK and US, are able to deposit and withdraw money to and from their Paypal account.

However, some countries (currently including Israel and Ukraine) are ‘send only’. This means that traders with accounts in those countries can make deposits in their Paypal accounts and send money to others, but not withdraw money from Paypal to their account. This would make its trading in such countries difficult.

Fees or Costs

Accounts are free to open. New traders will probably already have an account for their online shopping.

Unlike other common trading digital wallets, such as Skrill or Neteller, there is no charge if your account is unused for a period of time.

The fees for sending and receiving money are generally the same as other digital wallets, but there are instances where it is slightly less and slightly more. Any form of receiving trading money through Paypal will incur a charge; the transfer fee which can rise as high as 12%.

Withdrawing money from your Paypal account to your bank is free unless you wish for a cheque to be issued.

Is Paypal a good choice for Traders?

Although not the most common, it is generally a good choice for traders although traders should factor in the potential of high transfer fees.

Paypal is becoming more and more integral to how we move money around so we expect brokers to continue to take it up as a payment method.

Traders dealing with larger amounts of money should bear in mind that Paypal has a maximum of £10,000 for any single transaction.

Frequently Asked Questions

Are There Any Bonuses?

No. Paypal simply acts as a middle-man between bank and broker. Any deposits held for a long period in accounts don’t even accrue interest.

What Countries Can Use PayPal?

There are currently 203 countries and regions that use it, including all major developed economies.

Any Location-Specific Information?

Paypal is country-specific. This means that users in any given country can only link to a bank account they have in that country. The one exception is the USA: US Paypal account holders can link to bank accounts in other countries.

It charges up to four separate fees for cross-border transfers (all prices and percentages relate to the UK)

  • A small, fixed amount per transaction (currently 20p, varies for different countries)
  • A percentage of the transaction amount:
    • Up to £1500 per month (3.4%)
    • Up to £6000 per month (2.9%)
    • Up to £15000 per month (2.4%)
    • Over £15000 per month (1.9%)
  • Currency conversion fee, currently 2.5% above the Base Exchange Rate
  • Potential fees for using debit or credit cards rather than Paypal balance (this is on a transaction-by-transaction basis)

Forex brokers that accept PayPal

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