Electronic trading giant IG has announced it will no longer support PayPal as a payment method for its clients in the UK. The decision was confirmed through IG’s Community forum, where a company representative provided insights into the rationale behind this move.

The representative noted that the decision follows discussions with the UK’s Financial Conduct Authority (FCA). These discussions centered around the FCA’s concerns regarding consumer duty and whether the use of e-wallets like PayPal is in the best interest of clients.

"After evaluating the feedback from the FCA, we have decided to adjust our payment methods. Rest assured, we have alternative options available for both funding and withdrawing from your account," the IG spokesperson stated.

In addition to the regulatory concerns, IG also cited the high costs associated with PayPal transactions and the potential risks related to chargebacks as contributing factors in their decision to discontinue this payment option.

The FCA has been increasingly active in scrutinizing financial services firms to ensure they meet consumer protection standards, which likely influenced IG’s choice to remove PayPal as a payment option. The FCA’s concerns likely revolve around ensuring that payment methods used by clients are both secure and in their best financial interest, avoiding any potential pitfalls associated with e-wallet services.

While IG customers in the UK will no longer have the convenience of using PayPal, the broker has assured its clients that alternative methods for funding and withdrawing from their accounts are available. The company has not specified what these alternatives are, but it is expected that traditional methods such as bank transfers, credit, and debit cards will continue to be supported.

This decision marks a significant shift for IG, reflecting the growing importance of regulatory compliance in the financial services industry. Clients who previously relied on PayPal will need to adjust to the new payment methods as IG moves forward with its updated approach to managing client funds.