Forex, short for Foreign Exchange, is one of the most popular trading platforms nowadays. Forex trading is one of the most lucrative business options for most entrepreneurs since it gives them the opportunity to earn high amounts of returns even with just a small amount of investment.
The Benefits of Diving Into the Forex Industry
Forex is a global market that is incredibly liquid with a huge daily trading volume. Like any case of investments, forex trading is not for the inexperienced traders. However, once you’ve learned the ropes, the forex market will offer you some amazing advantages.
- 24-Hour Market for 5 Days
As we’ve mentioned before, the forex market is global. This means that trading is pretty much continuous as long as there is a market open somewhere around the globe.
The trading starts in the United States when the first major market opens in Australia at 5 pm EST on Sunday. Then, trading will end for the week when the last majoring market, New York, closes at 5 PM on Fridays.
- Transaction Costs Are Low
The cost of transactions is usually built into the price in the forex market and in the form of a spread. Forex firms and brokers pocket the spread as their payment in facilitating trade.
A spread is measured in pips. And for most currencies, pip is the 4th place after the decimal point or it is the 1/100 of a percent. And for trades that involve the Japanese yen, a pip is on the 2nd place after the decimal place or a 1 percent.
For instance, during a forex trade, if an asking price was 1.3246 and the bid price was 1.3244, the spread for the forex transaction is 2 pips. Brokers or forex firms can also charge a commission, either one that is based on the percentage of the transaction amount or a flat fee.
- High Liquidity
This is the ability of an asset to be immediately converted to cash. And in the world of forex, high liquidity means that huge amounts of money can be moved in and out of currencies with usually small spreads— which is the difference between the ask process for potential sellers and the bid prices for potential buyers.
- You Can Use Leverage
Forex firms and brokers usually allow traders to sell and buy in the market using a particular leverage amounts that give them the ability to trade with a higher amount of money that what’s actually in their accounts.
For instance, if you were to trade at 50:1 leverage, you can trade $50 for each $1 that’s in your account. This means that you can control a $50,000 trade using only a $1,000 capital.
- Profit Potential From Falling and Rising Prices
The market has no restrictions or regulations regarding directional trading. This only means that if you think that a currency pair should increase in value in the near future, you can go long or buy it, or if you think that it’s going to decrease, then you can go short or sell it.
Since currencies trade in pairs, you are always actually buying a currency and selling the other regardless of whether you are going short or long.
For instance, you are trading a US dollar/ British pound (USD/GBP) currency pair.
You will buy that pair— buying the dollar and selling the pound— if you think that the value of the 1st currency, called the base currency, will increase in value in comparison to the 2nd pair, called the quote currency.
You will sell that pair— sell the dollar and buy the pound— if you think that the value of the dollar to decrease in value in comparison with the pound.
Different than the stock market, where you will need to borrow shares first before selling it short, the forex market allows you to easily sell a currency that you do not own in which you just need to place a sell order.
These are just some of the amazing benefits of the Forex industry. Now, if you want to try your luck in the Forex business, then you will need the best Forex merchant account.
So, what is a forex merchant account?
A forex merchant account is like any bank account but it is designed specifically to process transactions via forex broker businesses in a timely, safe and secure manner. Forex brokers usually offer online trading and provide their traders with a way to trade through online payment solutions.
By opening a forex merchant account, you can start trading with other traders and even finance their trading accounts. Depending on the form of the forex brokerage license that your business has, it can affect the scope of a forex merchant account. This is because particular transactions might or might not be allowed. You should know that the jurisdiction where you operate your forex broker company will also affect the scope of a forex merchant account.
There are some countries that only permit transactions of payments within a region of a particular country.
The role of a forex merchant account is to allow traders to process monetary transactions as well as funding their trading account via credit and debit card methods in a safe and effective way.
A skilled consultancy firm should help and guide you in choosing the most suitable kind of merchant account in order to meet your firm’s needs. Thus, it is important that you seek the services of an expert and experienced consultant to obtain a forex merchant account.
Expanding Your Forex Merchant Business
The competition between forex brokers has grown increasingly in the past few years. Forex firms have not started extending their traders to almost every possible way in order to obtain business.
And probably one of the most famous way to attract more traders are the acceptance of debit and credit cards. Having a forex credit card processing is a great method to earn your client’s trust and becoming successful in the forex industry
For one, traders are more inclined and convenient for them to deposit money using their credit card than using bank deposits. And when a client uses a credit or debit card as their payment system, it is more protected and offers better security details in addition to the faster depositing of funds.
It is not a surprise that all reputable and leading forex companies accept card payments. Most forex businesses begin to search for a forex brokerage payment solutions after their customer looks for a credit or debit card payment option.
Otherwise, you end up losing valuable customers and will simply go to a different broker that provides them the option of processing credit and debit card payments.
The Advantages of Having a Forex Trading Credit Card Payment Processing
While there are other ways to accept payments for your forex trading company, there are some advantages that you can get from choosing a reliable forex trading payment solution.
- Extensive Bank Network
You can diversify your processing among various acquiring banks. You can mitigate the risk of forex payment processing by reducing your dependency on a single financial institution.
- High Ticket Processing and Volume Processing
You can accommodate your VIP traders quickly and with ease with high ticket processing. Also, you get the right processing capacity that you need in order to manage and expand your business further.
- Multicurrency Processing
As well all know, the forex market is an international trading company. And a reliable forex merchant account allows you to accept payments as well as receive settlements in all major currencies around the world.
- Forex Payment Gateway
With a reliable forex merchant account, you get a card processing gateway that can be integrated with major shopping carts, accounting systems, and CRM. This speedy exchange of processing data can enhance productivity and boost profits.
- Multi-Channel Payments
Some merchant account providers, like iPayTotal, allows you to accept payments in several channels. You can accept payments online, mobile payment, unlimited virtual terminals for MOTO transactions or even upload bulk processing filed for faster processing.
- Multiple Payments Methods and Fraud or Chargeback Management Tools
Merchant account providers including iPayTotal will provide only the best services to their clients. Thus they ensure that their clients can accept all major card brands or the option to add alternative payment methods in several countries.
Also, in order to protect themselves from frauds and manage chargebacks, they also offer customizable protection software and systems to keep their accounts and processing safe and secure.
The Problems In Opening A Forex Merchant Account
While most new forex businesses begin to look for a reliable high-risk merchant account broker or a high-risk payment processing for forex trading when opening their business, they soon realize the problems and frustrating process when opening a merchant account for forex.
Startup forex brokerages are the first to meet a series of challenges and frustrations when obtaining a forex merchant account. Some of the reasons include their lack of license and regulation, startup status and the lack of strong financial documentations.
For most startups, it is a combination of these three or all. Most processors and banks would try to avoid working with new forex firms because of these. In addition, it is also because there is not any performance report as well as the fact that they have a low volume which also means low profits.
Forex merchant without track records increases the risk of the banks or the processor. The banks cannot predict how the company will make or become without any history, thus taking risks when accepting their application.
Also those without regulation and accreditation decreases the chances of banks and processors to be associated with them. But for the startups, accreditations and licenses can be a bit difficult to achieve. This is because most authorities make it costly and lengthy to be a controlled or licensed forex broker. This is done on purpose to weed out any fraudulent brokerage.
Now for the more established forex business, obtaining a merchant account to provide a reliable forex payment processing can also be quite difficult. This is due to the fact that most banks and processors see the forex industry as a high-risk industry and prefer not to associate or do business with them due to the high-risks involved.
So, what makes a forex business a high-risk?
Well, there are several factors that determine a business’s risk category. For one, it is the applicable regulatory environment.
For instance, a forex business should have the proper licenses in the country where they operate. However, there may be some countries that may or may not allow its operation, with or without a license. And accidentally doing business in countries that violate a certain regulation can cause reputational damage not only to the merchant but also to the associated bank or processor as well.
In addition, there is a chance of merchant fraud. There are numerous websites out there that only serve as a front to illegal and restricted operations. Such kind of fraud is specifically widespread among high-risk operations such as the forex industry.
Then there are the ever-present chargeback issues. This comes from unhappy investors as well as the risk of fraud. Traders who lose their money can attempt to dispute a certain transaction by filing a chargeback. In addition, concerns about money laundering cause some banks and processors to shy away from the forex industry.
Most forex firms often struggle to find a stable and reliable forex trading credit card payment solution. Most processors and banks are anxious about accepting hefty ticket transactions and typically keeps funds while canceling the fore merchant account when they learned that the broker is accepting large ticket transactions.
iPayTotal: Your Number One Solution Provider For High-risk Payment Processing
Some merchants will have trouble finding the right card processing for forex trading companies because they are labeled or considered high-risk businesses.
Not to fret, iPayTotal is your best partner providing you a quick and high approval rate for your high-risk forex merchant account.
Reliable Credit Card Processing Solutions
iPayTotal has years and years of experience in processing payments in the Forex industry. We are experienced in issuing payment solutions in the seven major currency pairs in the world as well as in the 3 commodity pairs.
Here at iPaytotal you can accept payments in more than 150 currencies in 185 countries and settle in 23 currencies worldwide.
Multicurrency Processing
Part of the iPayTotal merchant account package is the ability to accept any payment in several currencies. Regardless of where you trade, you should be able to accept payments in the world major currencies such as Euros, British pounds, US dollars and more.
Global Banking Relationships
Signing up with us here at iPayTotal will allow you to receive and send credit card payments on a global scale! We have established strong and reputable relationships with banks across the world in order to make sure that our clients will have multiple options for their payment processing.
Regardless of where in the world your company is located, you can accept credit or debit card payments from just about anyone living anywhere in the world!
Credit Cards Are Not The Only Option
Most forex businesses will want multiple payment options for traders to fund their accounts. And with iPayTotal, we ensure that you have only the best payment solutions and alternatives that you want for your business.
Minimizing Chargebacks and Frauds
One of the main problems of most online businesses today is managing chargeback and fraud. Choosing iPayTotal, we don’t just provide you with the best forex brokerage payment solutions for your business, but we will also provide you with a complete package of fraud filters as well as chargeback management tools that you can customize to meet the demands and requirements of your business.
Now, you can manage and adjust the settings themselves, so you can allow only the legit customers to deposit money into your account and prevent chargebacks in the near future.
