How to Secure a Suitable Forex Merchant Account
A Forex merchant account is a must-have for a Forex brokerage service or Forex trading platform. Foreign exchange (Forex) is a market that involves the global buying, selling, trading, and speculation of foreign currencies. With more than 5 million transactions in a day, it is the most liquid market. Playing the Forex market allows a large number of people to make money each passing second.
One mode of operation in this sector is over the counter, where Forex brokers and trading platforms enable investors to trade currencies. Another option is where banks do the trading. A Forex merchant has to handle large deposit volumes through debit cards and credit cards. For this reason, a Forex merchant account is required for payment processing. Find out the basics of acquiring Forex merchant accounts in this guide.
Forex Merchant Account – What it is and How Does it Work?
Before you start looking up merchant accounts for your Forex business, you should know what to expect. Forex merchant accounts are holding accounts from credit card processors. It allows a merchant account to accept debit and credit cards. Individuals using Forex services want to be able to transfer funds conveniently, safely, and reliably. A merchant account makes this possible. The right merchant account makes it easy for a Forex merchant to accept payments and transfer payouts to the same credit card, which is what most Forex traders look for. Additionally, merchant accounts allow a Forex merchant to handle the large transaction volumes associated with the industry.
Who needs a Forex processing service, though? Forex trading platforms, Forex informational services, and Forex traders have to invest in Forex merchant accounts for successful operations. The type of business determines the most suitable merchant account. A Forex merchant has to find merchant services that specialize in the industry. Thanks to the size of the market, a Forex merchant won’t have trouble finding a suitable merchant account.
Why Is Forex Considered High Risk Industry
Although Forex businesses have enough choices for merchant accounts, they still have to deal with the fact that the sector comes with a high risk for acquiring banks. Payment processing companies have to consider several aspects when offering merchant accounts. One is the leverage risk. Lucrative ventures see sizable volumes of cash, which has its advantages due to the high returns generated. However, large transfer volumes also mean sizable potential losses for acquiring banks and, consequently, a high risk. Processors have to consider the liquidity risk that Forex merchants come with. The market experiences low liquidity during off-peak, like on weekends or bank holidays.
A common element that contributes to the high risk of accepting credit cards is increased chargeback rates. Merchant services have to consider the number of card disputes that a merchant account generates. Dissatisfied investors can reverse their card payments, leaving your merchant account with a chargeback. Fraud and money laundering are other reasons acquiring banks attach a high risk to Forex merchant accounts. This market involves various foreign currencies, meaning that no single jurisdiction applies. So, criminal elements have plenty of opportunities to take advantage.
Is it easy to get a Forex merchant account
Acquiring merchant accounts for Forex trading is simple given their high risk. Foreign exchange is one of the most in-demand markets in the world. The evolution of payment solutions fueled the industry’s growth. Traders went from cheques, local deposits, and wire transfers to debit cards, credit cards, and e-wallets. Now, the sector has numerous payment processing offerings from which to choose.
Most processors allow the online application of Forex merchant accounts online. If you have the requirements, a merchant account application takes a few minutes. Because of the high risk of this industry, approval for merchant accounts takes anywhere between 5 business days and two weeks. The requirements depend on the Forex merchant. For example, the payment processing minimum for an informational services merchant account is lower than for a trading platform merchant account. Some of the supporting documents required for merchant accounts are:
- A valid ID for the Forex merchant
- Printed Voided Check or bank letter from the processing bank
- Recent business bank statements
- 3-6 months of payment processing history
Legal Requirements for Forex Merchants
Before looking for a payment gateway for your Forex credit card transactions, you should be aware of the compliance standards to meet. Regulations for Forex trading vary across regions, with some being stricter than others. For example, the National Futures Association requires Forex brokers to have a locked capital of $20 million. In comparison, a Forex merchant in Europe requires between $100,000 and $500,000. For this reason, a majority of Forex merchant accounts are for Europe-based ventures.
A Forex merchant must hold a valid license to be approved for payment processing. Brokers, trading platforms, and informational services should ensure that they satisfy all regulations if they are to find quality processing solutions. A Forex merchant in the UK, for instance, can’t be approved without a license from the Financial Conduct Authority.
The pricing for merchant accounts depends on a specific applicant. Hence, the better your compliance, the more favorable the rates. As a high-risk merchant, a Forex business can pay almost twice as much as a low-risk account. However, a Forex merchant can reduce the cost of an account by maintaining a low chargeback rate, a high monthly volume, and actionable fraud prevention measures. Balancing the risk for payment processors gives a high-risk merchant some negotiating power.
What to look for when choosing a payment processor for your Forex Business
The payment processing company you choose influences how you accept payments and, thus, how your business runs. Therefore, concentrate on merchant services with experience in foreign exchange. A suitable firm should be able to tailor processing solutions to match individual account Forex merchant requirements. For one, it must enable you to support as many currencies as your business demands. Multi-channel payments are other solutions that a Forex merchant might be looking for. Virtual terminals, mobile payment processing, and bulk processing solutions are some of the offerings you can expect. A Forex merchant also needs to accept payments from different credit card brands.
Seamless integration is another aspect to look for in a Forex credit card payment gateway. Whether you run Forex informational services, a trading platform, or a brokerage firm, your website consists of various tools. A merchant account should work with CRM applications, shopping carts, and accounting systems, among others. Merchant services implement various security measures to facilitate safe Forex credit card transactions. So, find out beforehand if a provider is PCI compliant, has anti-fraud tools and card brand security services. Take the time to compare rates from multiple companies. Look for merchant accounts that save you money.
Top Online Gambling Merchant Processors
Forex merchants have a vast selection of payment processing alternatives from which to pick. Given the popularity of the market and despite its high risk, processors are willing to work with Forex merchants. Therefore, merchants have the luxury of comparing several providers before settling in the one that best fulfills their needs. Businesses with medium to high turnover should consider obtaining multiple merchant accounts, such that if one gives notice, there is a backup in place. Forex merchant account processors package offerings differently, hence the recommendation to look at several before making a decision. Here are some leading alternatives:
Securionpay
A merchant account with SecurionPay guarantees that you can make direct payouts to debit and credit cards. The processor supports 160 currencies worldwide, making it a viable option for a large-scale operation. For mobile payments, a merchant gets to offer simple, 30-second transactions, a 1-click user experience and in-app checkout that is compatible with every device. SecurionPay offers Forex merchant accounts at competitive rates that vary with your business model and processing volume. The provider has a seamless application process.
Allied Wallet
For comprehensive merchant account solutions, you can trust Allied Wallet. The processor accepts over 100 currencies across 196 countries. Merchant accounts come with secure day transfers thanks to the company’s PCI Level 1 compliance. A Forex merchant gets the ability to monitor transactions with Allied Wallet’s reporting system. Additionally, your business can capitalize on the expansive network of banking relationships the provider has worldwide. Your merchant account integration takes as little as 12 hours. You can decrease declined payments courtesy of the Fraud Scrub technology. The filtering systems can be customized to suit your business needs.
Instabill
This payment processor boasts a high approval rating for Forex merchant accounts. Therefore, it’s ideal for first-time applicants. Instabill is equipped to handle processing requirements for large-volume merchants. Multi-currency processing solutions ensure that your clients can deposit and withdraw through all the major currencies. Instabill studies your account needs, then partners you with the best acquiring bank. A merchant doesn’t have to pay account setup fees. Instabill also promises low-cost payment processing that corresponds to your account requirements. Merchant accounts have fraud protection protocols to help reduce risks as much as possible.