Skrill was one of the first e-wallet services that facilitate internet-to-internet bank transfers. It launched in 2001, and since then, it has gained a reputation as one of the industry's core services. Whilst the basic service at its core is to offer a transfer service between Skrill users. It has grown to offer so much more. But with more services comes more risk, leading many to question how safe Skrill is. Here we're going to cover just what you can do with Skrill and the security in place at each stage of use. See our overview of how safe Skrill is as a service below.
Skrill is an incredibly safe service to use. There are more and more security measures in place to protect your money and information at every step. It's even monitored by the Financial Conduct Authority in the UK under the Electronic Money Regulations Act 2011.
Safety and Skrill
Let's start with the basic security measures in place for your Skrill account. As we've already mentioned, the company, formerly known as Moneybookers until 2011, is monitored by relevant government-appointed bodies. This alone is a good sign because it means that there are certainly policies in place to protect your money, even if the other security measures somehow fail.
One of the first things that Skrill prompts you to do is set up two-factor authentication. This is a service that uses a second app or your phone number or email address to verify who you are. Once this is set up, you can rest assured that no one else will be able to log into your account without access to the secondary service. If, for example, someone on a different device attempted to get into your Skrill account, they'd need to use the two-factor authentication to prove they were you. It's highly unlikely that this will ever happen.
Even without two-factor authentication, Skrill forces you to create a 6-digit passcode. This works in the same way as it does on your phone, but it's specific to your Skrill account. This is an initial step before two-factor authentication, making accessing your account that much harder for hackers or thieves.
Skrill never contacts you by email. This is because many scammers use phishing emails to mimic banks to obtain sensitive information and get into people's accounts. You can be safe knowing that you'll never get a legitimate email from Skrill, and delete everything that claims to be.
When you open a Skrill account, you need to verify your identity. You must do this to increase your account's limits, or you may as well use an actual bank. You'll need to do this with a government-issued form of ID, such as a driving license. Skrill uses this to verify who you are. It will check to see if you've reported any stolen ID and prevent scammers from creating a fake account in a heartbeat.
Finally, the Skrill website uses encryption software to prevent anyone from accessing your personal data. Banks widely use this software because it is so secure, so you should never feel unsafe when entering personal data into the system.
When to Use Skrill
No matter how safe Skrill is to use, it's no good to you if you can't use it. Thankfully the company has done a lot of work to become one of the most commonly used transfer services online. While it's commonly used in online gambling, it's also recommended by eBay and Facebook and is seen even in forex trading.
At the time of writing, it's estimated that around 120,000 online gateways use Skrill. This isn't a niche service. It's a commonplace. It's also much more useful than Paypal when it comes to purchasing cryptocurrency.
You may also use Skrill to transfer money to friends or family. There's no need to have the money paid into your account by work or anything like that. Instead, you can connect any of your other bank accounts or cards to transfer funds. This is similar to how Cash-App lets you deposit cash into your account in their system. However, you can make a transfer straight from your debit card into someone else's account if you need to.
The supported services on Skrill are as follows:
- Debit and Credit Cards
- Bank Transfers
- Bitcoin and Bitcoin Cash
Why do Some People Think Skrill is a Scam?
With all of this security in place and the ease of use, you'd have thought that Skrill was as reputable as can be. However, some believe it's more of a scam than a service. This stems from the fees that Skrill charges on almost all account activity. We've broken down all of Skrill's fees and what they mean for you in the following.
Fees on Deposits
There's a flat 1% deposit fee with Skrill. This means that if you deposit $500 into your account, Skrill will take $5. The amount is taken from the money you're depositing. So if you need $500 in your account, you'll need to deposit around $508 to ensure that at least $500 is in there after Skrill has taken their fee.
To many, this might seem misleading. If you're making a deposit, you expect all of the cash to be moved and the fee to be taken from your bank separately. Unfortunately, this is just something you need to learn while using Skrill.
Fees on Withdrawals
All withdrawals from your Skrill account are charged the currency equivalent of 5.50 Euros. At the time of writing, this is £4.99 or $6.51. Thankfully this fee is set, but it does make attempting to withdraw anything around $5 pointless. You may need to wait until you have a large sum to withdraw all at once, incurring the minimum fee.
Compared to a service such as Paypal, this is extortionate. To withdraw funds to a bank account on Paypal is free. With Skrill, you're paying through the nose. Once again, this is a prime example of why people think Skrill is a scam.
Fees on Transfers
All transfers on Skrill incur a charge of 1.45%. On $400, this would be $5.80 in the base fee alone. However, there's a little more to this than meets the eye.
If you're transferring money to someone who uses a different currency, Skrill will charge an additional 3.99%. In the end, you may end up paying as much as a 5.44% transfer fee. Skrill will inform you of this, but it doesn't make the sting any less expensive.
To use Paypal as a comparison again, you'll be charged a single variable fee. Paypal can be expensive to use when transferring between currencies as well. But you'll be looking at a fee of between 3% and 4% rather than upwards of 5%.
Let's round things off here. Skrill isn't a scam at all. It's an e-transfer service that many users don't understand properly. If you read the fine print of any monetary service, you're going to find sneaky fees that you don't like. That's how banks work.
The important thing to remember here is that Skrill isn't your bank. They're accessing your bank. This is an intermediary service, so they need to get their money from somewhere, the same as Paypal. That's why they charge so much in fees.
If you're thinking about using Skrill, you need to assess what you'll use it for. If, for example, you need it for Forex trading, then it's a great service. You'll be dealing with large amounts of money, but you won't be transferring between currencies within Skrill itself. This makes the fees you'll incur minimal because you'll only withdraw money when you need it.
However, if you're hoping to use Skrill as a service to transfer money regularly, maybe think again. Paypal offers everything that they do, and they'll charge you much fewer and lower fees. With that said, this doesn't make Skrill any less safe. It's simply a reflection of the charges they apply and how that affects their customers.