Forex Stands for foreign exchange and is a global market where all the world’s currencies are bought, sold, traded, and speculated on. With over $5 trillion of daily trading volume, the foreign exchange market is the world’s largest and most liquid market. It remains open 24 hours a day, 5 days a week, and on most holidays.
The forex market operates with 2 different business models. The first model caters to banks performing currency trading in the interbank market. And, the second one involves currency trading for individuals trading in currencies through brokers or trading platforms in the over-the-counter markets.
Forex merchant account serves forex traders, forex information services, and forex trading platforms. Brokers accepting payments from forex traders require the service from a forex merchant account.
Types of Forex Merchant Processing
Forex businesses accept payments in a variety of formats and currencies. The following forex payment processing categories are widely used:
This payment processing solution is the most coveted for forex brokerages. This is also the first choice of brokers as they offer the fastest way to transfer money for foreign currency trading. However, Visa and MasterCard regulations often cause instability in these solutions.
- Check Processing
Accepting forex payments is becoming the most popular method. All processing of payments and deposits takes place within one company, without any middleman. Visa or MasterCard restrictions are eliminated here.
Also, there is no requirement to categorize payments with Merchant Category Code (MCC). Most of the cheque processing traffic emerges from Canada and the US. Although settlement takes days rather than hours, these processing accounts are easy to maintain with fewer restrictions.
- Cryptocurrency Processing
Although trading with cryptocurrency is becoming popular recently, this is still the least popular payment solution among forex traders. The settlement process using cryptocurrency is complex and also the value of a digital currency is highly unstable.
- Bank Transfer
Wire transfers were used extensively in the past. But they are now losing their popularity. The major cause of this decline is the lengthy process that customers have to follow to transfer money. In addition, bank transfers possess a similar risk as credit card processing does.
Benefits of Forex Payment Processing
There are ample benefits of forex payment processing. Your ideal forex payment processor should provide the lowest rates and faster approvals to let you avail of those benefits.
- Trading in global markets becomes easier as it enables multi-payment processing.
- Accepts all major card brands of different countries through multiple payment methods.
- Provides forex credit card processing gateway.
- Enables the merchants to enjoy an extensive bank network.
- High volume and high ticket processing.
- Improves security with extensive fraud prevention and detection tools.
How to Get a Forex Trading Merchant Account
Applying for a foreign trading payment processing account is similar to any other form of merchant account. Depending on your geographical location, conditions to become a forex merchant will vary. For instance, you will need to have a business presence in some countries or be a regulated foreign exchange.
Once you have fulfilled the basic requirement criteria, you will need to present your financial records to the acquiring bank you will be working with. These records should reflect three to six months of processing history and show that your chargeback rate is reasonably low.
If you do not have any financial records or payment history, you need to show the bank what measures you will take to ensure payment security and keep chargeback low.
The risk of frauds and chargebacks is increasing rapidly in highly profitable businesses and thus, these concerns are quite common in the forex industry. High levels of fraud and chargebacks can prevent acquiring banks from working with you.
So, it is of utmost importance that you promptly eliminate such risks as they occur. For that, choose a payment processor specializing in high-risk merchant accounts. They will be able to understand the problems you face as a forex trader efficiently and as a result, help you solve them much sooner than ordinary forex payment processing account providers.
Documents Required to Apply
Different merchant acquirers will demand their specific list of documents with your account application. But mostly, you have to share the following documents:
- Ownership and other relevant details of the account to which processed fund should be remitted
- Three to six months of bank statements
- Three to six months of statements containing payment processing history
- Legal documents to prove your ownership of the business
- Photo-ID to follow Anti-Money Laundering (AML) and Know Your Customer (KYC) norms
- Address proof (generally, utility bills)
Many forex merchant account providers may ask to submit additional proof of minimum monthly processing values. Chances of getting approved for a foreign payment processing account will increase when you provide orderly documents when asked for.
Benefits of Using High-Risk Merchant Bank
High-risk merchant account providers understand the particular issues, foreign currency traders and brokers may face. Generally, they are highly experienced in dealing with high-risk business affairs.
In addition to this, there are many reasons to choose high-risk merchant banks for foreign exchange payment processing:
- They provide better services at comparatively lower prices than standard merchant acquirers who may increase the price due to higher risk.
- They will be able to process a high volume of international transactions in various global currencies at a faster speed.
- They offer enhanced fraud detection and prevention tools that ensure your data and payments remain safe.
- They can accept multi-channel payments, including online payment gateways.
- Furthermore, they offer an integrated credit card processing system for foreign transactions that is compatible with your current operating system.
How to Choose the Best Forex Merchant Acquirer?
Choosing the best forex merchant acquirer that can understand and solve problems arising in your business is extremely crucial. It can minimize the conflict of interests later in your business. You should be looking for these things while choosing a forex payment processor:
- Check if they have a high-volume processing account.
- If you are operating globally, ensure that they have multi-currency processing.
- 24/7 customer support is a must for globally operating businesses.
- If they offer a chargeback mitigation facility to prevent excessive chargebacks.
- Fraud detection and prevention tools to ensure safety.
- Competitive rates.
There are many factors that you need to keep in mind while selecting a forex merchant account provider. These are basic guidelines that will help you throughout the process. Your primary focus should be on user experience, convenience, and security of payments.
Look for a forex payment processor that offers innovative and quick solutions. They will ensure seamless payment transactions. As there is no sign of forex slowing down in the future, choose the processor that can adapt to changes hassle-free and quickly. Check out our LinkedIn page PayPound.ltd