FinanceTechnology

Passfolio review: scam or legit, what you need to know, how to use – read before you join

Everything you need to know about the new US Stockbroker Passfolio. Are they scam or legit? is it safe to join? How to register and more.

Financial technology (Fintech) has bridged the gap that once existed between the US stock market and enthusiastic investors who domiciled outside the four walls of the USA. It is now possible to buy stocks from companies like Amazon, Google, Tesla, Nike, etc. listed in the US stock market with just a mobile phone, without having to worry about paying a high amount as commission to a broker.

Nigerians can now gain access to thousands of stocks from both local and foreign companies without actually having to get drown in paperwork. The Passfolio app is one of such Fintech tools that allow investors to key into the US stock exchange.

What is Passfolio?

Passfolio is a San Francisco-based fintech company that provides a digital platform that enables people from over 170 countries of the world to have access to the US stock market. Passfolio can achieve this feat through the help of two of their fully owned subsidiaries – Passfolio Securities and Passfolio Financial.

Passfolio Securities allows the Passfolio app to give access to over 3,800 stocks, REITs, and ETFs in the US stock market without charging any commission for it nor setting a minimum amount to start with. The company is a registered member of the Financial Industry Regulatory Authority (FINRA), and Securities and Exchange Commission (SEC).

Passfolio Financial provides money services and also makes it easy for customers to fund their accounts using cryptocurrencies. When a Passfolio account is to be funded with cryptocurrency, Passfolio Financial will, first of all, convert the cryptocurrencies into dollars and then transfer the dollar proceeds to the registered brokerage account held at Passfolio Securities. From here, the app users can then buy their desired securities.

Passfolio owner: Passfolio was founded in 2018 by David Gobaud.

Passfolio Scam or Legit?

Passfolio is a legit broker-dealer company that is being regulated by top organizations in the US. The company is a registered member of the Financial Industry Regulatory Authority (FINRA), and Securities and Exchange Commission (SEC). These organizations regulate the activities of Passfolio as well as provide additional security to it.

Passfolio is also a registered member of the Securities Investor Protection Corporation (SIPC), which is known to protect the securities customers of its members up to US$500,000 including a claim for cash in the amount of US$250,000.

How Secure Is Passfolio?

Passfolio is safe to invest in. the company has implemented a security measure that is considered to be industry standard. Passfolio does not store the passwords of users as plaintext, rather, they use the BCrypt hashing algorithm to hash the passwords before storing.

Passfolio encrypts private and sensitive information of users such as their social security number before writing them to disk. Communication in apps, websites, and servers are secured with Transport

Layer Security (TLS) protocol. Logging into an account on Passfolio requires multi-factor authentication, this serves to further tighten the security. The mobile app is built to support FaceID, TouchID, or pin code for unlocking

WHAT ARE THE FEATURES OF PASSFOLIO?

Below is the list of the features packed in the Passfolio app:

  • Mobile platforms available:  Android and iOS
  • The minimum amount that can be invested: $0.
  • Documentation Required by Passfolio: Photos of a Government Issued ID and a Utility Bill, Bank Verification Number (BVN), bank Account Information, verified Email Address, and a verified Phone Number.
  • Payment Options: Bank Transfer or use of debit cards such as VISA, MasterCard, and Verve cards issued by Nigerian Banks. They also support Wire Transfers, SafetyPay, ACH, SWIFT, TEDs, TransferWise, SEPA, and USD paper checks. Payment options available will vary based on the location.
  • Holding period: You are allowed to hold as long as you want.
  • Investment monitoring: the Passfolio app allows you to track the returns on your purchased investments.
  • Withdrawals: it takes 1-2 business days for funds to settle in a bank account.
  • Fees:  Passfolio does not charge a commission when trading stock. However, their cryptocurrency partner Gemini charges 0.35% on each transaction on cryptocurrency. The company itself does not charge an additional fee aside from that of Gemini. They do not charge account fees. Creating, maintaining, or even closing a cryptocurrency account with Passfolio is free.

However, all withdrawals done on Passfolio comes with a fee. Paper check cost $3.00, ACH transfer cost $0.25, wire transfer cost $25.00, wire transfer to other countries cost $35.00, TED charges 1.2% as currency conversion fee, and 0.38% IOF + R$2.00.

For deposits, TED charges 1.2% as currency conversion fee and 0.38% as IOF, bank transfer in Nigeria cost a Fixed 0.2% as Fee and another 1.4% (Max ₦2,000).

Passfolio minimum deposit: There is no required minimum deposit at Passfolio. That comes on top of the fact that having an account at Passfolio does not incur any other fees either.

HOW TO REGISTER TO PURCHASE AND SELL STOCKS ON PASSFOLIO

Download the App and Sign Up

To begin buying shares using the Passfolio app, you will need to download the app first. Android phone users can get the app from Playstore by clicking here while iPhone users can get the app from the Apple app store by clicking here.

Information required during sign up includes name, email address, strong password, etc. you are required to be at least 18 years old to own an account.

Fund Your Wallet

You have to fund your wallet before you can buy stocks on the Passfolio app. Your account can be funded through various means since Passfolio is a global app. The funding options available will vary based on location. You can choose from Wire Transfers, SafetyPay, ACH, SWIFT, TEDs, TransferWise, SEPA, and USD paper checks. Nigerians can use bank transfers.

To deposit funds,

  1. Click on the ‘transfer’ tab,
  2. Select ‘deposit’
  3. Choose the account you want to deposit into (either stock account or crypto account)
  4. Choose your preferred payment option and follow the onscreen instructions to complete the process. It may take a day or two for the funds to reflect in your account.

Buy Stocks

After funding your account, you can proceed to buy stocks. To buy stock on Passfolio, do the following

  1. Click the ‘Discover’ tab and search for your desired company. You must have done all your research on your chosen company before this process. The platform allows you to either input the number of shares you want to buy or input your desired investment amount in USD to get a stock equivalent.
  2. Select the stock you want to buy or sell and then click on ‘Trade’.
  3. Type in the amount you are willing to buy or sell either in shares or in dollars.
  4. Confirm your order and that’s all.

How to Withdraw From Your Wallet to Your Account

Once you sell a stock, the cash will be available in your dashboard. This cash can be withdrawn to the local bank account by following these steps:

  1. Click on the ‘transfer’ tab,
  2. Select ‘withdraw’
  3. Choose the account you want to withdraw from (either stock account or crypto account) and specify your withdrawal amount.

It takes 1 to 2 business days for the withdrawal order to be processed after which the funds will be made available in your local bank account.

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Patrick Okon

Patrick Okon is a content developer at InfoGuideNigeria.com. InfoGuide Nigeria is a team of Resource Persons and Consultants led by Ifiokobong Ibanga. Page maintained by Ifiokobong Ibanga. If you need a personal assistance on this topic, kindly contact us.

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