Western Union is not considered to be a common or popular method of payment for funding a Forex trading account. Ultimately, several FX brokers frown upon the mode of the transaction as it’s hard to ascertain the source of funds, and even if they do, it is not possible to adhere to the strict anti-money laundering rules that Forex Brokers are supposed to follow. Nevertheless, there are a handful of Western Union Forex brokers that allow their clients to deposit and withdraw trading funds using Western Union.
Western Union Payments In Detail
Western Union is the oldest international payment processor that initiated its operations way back in the 19th century. The company offered a way of sending payments through telegrams, which quickly caught on and led to the company being a giant powerhouse in international money transactions. However, with the invention of the computers, the internet, and online payment channels, the company has moved away from its roots by allowing their customers to transfer money to international destinations through their online payment portal.
The basic premise of a Western Union payment is that a sender approaches a Western Union outlet to send money to a different destination. Western Union outlets can either be physical offices or affiliates such as banks and other financial organizations. Since 2000, Western Union had been seen moving their entire service portfolio to an online medium, and as of today, users can send money to any location in the world by simply making the payment through the official Western Union website.
Regardless of an improved Western Union online payment processor, receivers are still required to collect their money physically from the representative offices. Of course, there is an option of sending the money to a bank account, but nowadays, you don’t need the services of a third party to initiate international wire transfers. Therefore, the online aspect of money transfer loses its value. Western Union also incurs a hefty transaction fee, which makes e-wallets such as Skrill and Paypal seem extremely viable.
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The Problems Associated With Funding A FX Trading Account Using Western Union Money Transfer
Western Union consistently receives a lot of negative feedback from several Governments and international organizations due to their relative lack of security while transferring money. Western Union is used extensively by scammers and terrorist organizations for money laundering and other illegal activities. The nature of Western Union transfer helps the sender and receiver to remain anonymous, even if the company keeps a track record of the financial transaction by retaining the identifying documents of both parties of a transaction. Forged documents and a lack of proper verification procedures do tend to inhibit the company from deterring financial malpractice.
Once the money is sent through Western Union, there is no way that a sender can reverse the process, which essentially means that the receiver always gets his fund. There isn’t any chargeback option that is usually available with other money transfers such as credit card, PayPal, or wires, which prevents the sender from exercising any control over his payment. This is a significant problem while making payments to Forex brokers, as it is close to impossible to track the money after it’s been received by the broker. The broker has the discretion of holding on to funds or adding it to a trading account minus all the fees incurred for the transaction. Since any major regulatory agencies do not support Western Union as a preferred mode of payment, it is also difficult for a trader to initiate any legal proceedings against a broker for any misuse of funds originating out of a Western Union transfer.
Where Can I Find A Western Union Forex Broker?
Western Union payment option is only available with a select few FX brokers, which narrows down the choice significantly. Most regulated Forex brokers tend to stay away from Western Union as it becomes difficult for a broker to follow the strict anti-money laundering regulations enforced by their regulatory authority. Some regulated brokers do circumvent the regulations by setting up their brokerage in a tax haven that has a relatively lower number of restrictions when it comes to accepting payments from traders. While some of these brokers have an excellent reputation in the industry, it would be advisable for traders to exercise caution before choosing Western Union as their desired mode of payment. The following list of Forex brokers accepts Western Union as a payment option:
There are a few precautions that can help you to stay away from non-regulated and potentially scam Forex brokers that accept Western Union payments:
Perform an extended research of the Forex broker and take note of their regulation.
Get in touch with the broker and seek information related to the duration required for completing a Western Union payment. Get it in writing.
Pay special attention to their withdrawal policies, and ensure that they allow withdrawals via Western Union. Although most brokers send withdrawals to the same payment method that was used to fund the account, some brokers may have other conflicting policies.
Always have a clear idea about the fees of transaction incurred by the broker and make sure that they stick to it.
Read through existing customer reviews to acquire a fair idea about the overall reliability of the broker.
When Should I Choose Western Union?
Western Union is a great alternative if you don’t have access to online payment wallets or credit cards, as Western Union allows you to make payments at their local offices. Some traders use Western Union specifically to ensure that they do not reveal the card or banking information to the broker. The anonymity aspect of Western Union is certainly an added advantage if you consider the amount of online scam that we witness on a daily basis.
You can denominate your preferred currency at the Western Union office and determine the currency exchange rates beforehand. This allows you to save money by avoiding the hassle of converting from your local currency to other currencies from the broker and incurring substantial exchange fees. However, the cost of transaction for a Western Union payment is inherently high, which should deter traders from choosing this option.