When it comes to online transactions, many traders think of PayPal first. It is no secret there are significant risks to using one's credit or debit card online. The PayPal e-wallet has built a reputation of a worldwide leader in money transfers.
If you decide to trade binary options, you are obviously involved in transferring funds between accounts. The e-wallets are always recommended as the fastest and securest banking option.
Although the binary options industry is going through a period of consolidation and clean-up, the risk of exposing one's financial data to unregulated brokers is no doubt serious.
With the advent of e-wallet deposit and withdrawal options, binary traders are able to bank with a broker in a safe and secure environment. With a good focus on security, easier options to manage and lower processing fees, deposit and withdrawal options, such as PayPal, Neteller and Skrill, have grown in popularity.
It is not surprising then that binary traders are always on the lookout for PayPal binary brokers. However, using PayPal to fund a trading account is not always an easy task.
PayPal doesn’t work with binary brokers
There are not many binary options brokers that allow PayPal as a funding option. This is rather surprising given, as far as market share is concerned, PayPal beats all other e-wallet payment methods by a strong margin. So obviously, it should make sense that binary brokers offer PayPal payments. But this is not the case.
The main reason why PayPal doesn't work with binary brokers is because the company focuses strongly on security. This means that any risky business is often restricted by PayPal. As you might already know, trading binary options and forex is indeed risky and not suitable for everyone.
Fortunately, or unfortunately, binary options and forex fall into the risky business category. But the fact is many forex brokers do offer PayPal banking. Then, why are binary brokers outcasts?
To set up PayPal as a banking option, brokers need to have strong reputations. One might argue that the CySEC regulated brokers fall into this category. While that may be true, the fact remains that CySEC doesn't quite have a good history of thoroughly implementing regulations.
In addition to regulation, the binary options industry is often in the headlines for the wrong reasons, such as cases of fraud or broker malpractice. While these cases have decreased in recent times, there is no doubt that the risk alert for encouraging binary trading via PayPal is still high.
Over the years, many customers have complained about refused withdrawals at unregulated brokers, which makes the environment extremely unhealthy.
When you combine all the above factors, it makes it much easier to understand why PayPal doesn’t work with many binary brokers. There are inherent risks for all parties involved, especially for the customer if he or she is dealing with an unregulated firm.
Traders want to use PayPal
Traders, and in fact anyone who transacts online, love PayPal for a number of reasons. Being one of the oldest e-wallet payment methods, PayPal has grown and adapted over the years. PayPal offers security unlike any other e-wallet, and the company is spread around the world.
Just about anyone from anywhere can now send and receive money via a PayPal account. This has partly led to the reason why traders want to use the e-wallet. We also need to mention that traders have the privilege of not exposing their actual credit cards or banking info.
Traders love PayPal because it is quick, easy and secure. Due to the low commission costs, one can expect transactions between the e-wallet and the broker’s account to be lower.
More importantly, PayPal has built an image of being on the customer’s side. This means that it is easy to dispute a transaction, and in many cases, depending on the nature of the business, customers can expect to receive a favorable verdict from PayPal.
The transaction history and the entire process has been made so simple that even the most non-savvy of Internet users can create an account with PayPal and get started.
You can actually manage all transactions on your mobile device. The iPhone and Android app make it even easier. In a few clicks, a trader can fund his or her broker account and start trading.
PayPal vs Neteller
When you want to deposit at a binary options broker and PayPal is not an option, the first alternative is probably Neteller. Creating a Neteller account is quick and secure; you can also have a Neteller MasterCard.
There are many advantages to this. For one, binary traders can make use of the benefits of e-wallet options available with Neteller.
After creating an account and making a deposit to Neteller, traders can quickly fund their broker’s account. Deposits and withdrawals via the e-wallet work many times faster than wire transfers. This will offer not just flexibility but also security as you will not disclose credit or debit card information.
Another major plus of using Neteller as a banking option is the fact that some binary brokers also offer seasonal promotions targeted toward e-wallets, such as Neteller (or Skrill). This means that traders can take advantage of deposit bonuses or even lower fees.
The downside is that Neteller has limited operation in a number of countries and is not available all over the world.
PayPal and binary options
The PayPal binary brokers might seem like a good idea, and at times, one can become frustrated not being allowed to use PayPal to fund one’s trading account. This has partly led to some dodgy binary brokers finding a way to offer PayPal deposits. While traders might find this a motivating factor to sign up with that broker, it is not recommended.
The risks of the operation being closed or your best interests not being protected by PayPal are high. Given that binary trading is risky and it is easy to lose money very quickly, PayPal binary brokers are hard to come by.
For someone who is interested in trading binary options and needs an e-wallet method of banking, Neteller is the next best option.