Oanda
Oanda offers one of the lowest-cost solutions available for FX traders. The primary reason they are able to offer spreads as low as 0.9 pips on the EUR/USD at times--and consistently as low as 1.2 to 1.5 pips--is that they are not paying introducing brokers to generate business for them.
Marketing
Rather than using brokers or online advertising, they primarily generate business via their popularity as a general currency conversion site. If you visit a major search engine, such as Google, and search for terms like "currency conversion," one or two of Oanda's pages will be in the top five unpaid results. This means that Oanda's site receives thousands upon thousands of hits daily from people simply searching for information related to exchanging one currency for another. It also means a free stream of leads that Oanda can potentially convert into currency trading clients, which are of course substantially more profitable.
Platform
Oanda's platform is Java-based, which many view to be less secure than a Windows-based, downloadable platform. It can be unstable at times, particularly when launched via a web browser such as Internet Explorer or Mozilla Firefox. However, they offer a platform plugin that is more reliable and stable.
Dealing
Oanda seems to pride itself on offering one price to all customers. Because one can trade any size between 1 unit (literally 1 EUR/USD) up to 10 million units (10,000,000 EUR/USD) on most instruments in Oanda's platform, smaller traders are at an advantage. whereas large traders normally have pricing power and the ability negotiate with a broker for a better deal, Oanda offers the same low spreads to "mini" clients or "micro" mini clients as they offer to large traders with over 1 million USD balances.
Execution on Oanda's live platform is exceptional, with fills occurring quickly and at the price requested over 99% of the time. Note: this is based on a sample size of over 1000 trades, the largest of which was under 500K units.
There are two primary flaws to Oanda's dealing practices. One is that because it is 100% internet-based, it is not possible to deal by phone. This discourages many clients--particularly large ones--who are taught to have "redundant systems" meaning alternative dealing options in the event of an internet outage or a lost connection.
Another issue is that on occasion--perhaps 5 times a year as a rough estimate--Oanda's entire platform, and often their entire FX trading website, will be down for upwards of 10 minutes. The longest down-time observed has been roughly 120 minutes, during the early New York session. This means that as a precaution, clients should always have a back-up dealing option, even if they rarely intend to use it, so that risk can be minimized in the event of downtime on Oanda's platform.