Paypal is cracking down on Forex

Paypal is cracking down on Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term

Paypal is one of the leading online payment processing companies, allowing you to send and receive money securely all over the world. This solution is particularly successful with private individuals transferring money one to another, and with small and medium sized businesses who prefer the easy billing service that Paypal delivers.

Paypal recently started to crack down on forex and it is rumored that it has stopped receiving account opening requests from new brokers and that it will soon start shutting down the service to existing brokers as well.

Reading Paypal's own Use Policy you can see that Forex is prohibited as an activity, yet until now, much like the Chinese government, Paypal turned a blind eye towards it.

Specifically it prohibits the following activities:

3. relate to transactions that (f), are associated with the sale of traveler’s checks or money orders,

(h) involve currency exchanges or check cashing businesses

6. involve gambling, gaming and/or any other activity with an entry fee and a prize

(some brokers offer a deposit bonus which can be considered as an entry fee)

While it doesn't sound too horrible for the North American or European audiences this move would come as a major blow for residents of developing countries and offshore brokers. In several countries this payment method is as popular as Visa or MasterCard and is certainly much cheaper.

I have no idea what the reason behind this decision is but I can speculate that this is due to prospective anti Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term requirements that are being made more stringent by regulators worldwide in a forex market that was until recently completely wild.

Another reason might be the amount of chargebacks that occur with this payment method, mostly in developing countries, which is a costly procedure both for Paypal and Forex brokers.

https://www.paypal.com/us/cgi-bin/webscr?cmd=p/gen/ua/use/index_frame-outside

Paypal is one of the leading online payment processing companies, allowing you to send and receive money securely all over the world. This solution is particularly successful with private individuals transferring money one to another, and with small and medium sized businesses who prefer the easy billing service that Paypal delivers.

Paypal recently started to crack down on forex and it is rumored that it has stopped receiving account opening requests from new brokers and that it will soon start shutting down the service to existing brokers as well.

Reading Paypal's own Use Policy you can see that Forex is prohibited as an activity, yet until now, much like the Chinese government, Paypal turned a blind eye towards it.

Specifically it prohibits the following activities:

3. relate to transactions that (f), are associated with the sale of traveler’s checks or money orders,

(h) involve currency exchanges or check cashing businesses

6. involve gambling, gaming and/or any other activity with an entry fee and a prize (some brokers offer a deposit bonus which can be considered as an entry fee)

While it doesn't sound too horrible for the North American or European audiences this move would come as a major blow for residents of developing countries and offshore brokers. In several countries this payment method is as popular as Visa or MasterCard and is certainly much cheaper.

I have no idea what the reason behind this decision is but I can speculate that this is due to prospective anti money laundering requirements that are being made more stringent by regulators worldwide in a forex market that was until recently completely wild.

Another reason might be the amount of chargebacks that occur with this payment method, mostly in developing countries, which is a costly procedure both for Paypal and Forex brokers.