How to choose a payment provider for your forex website
Monday 4th September 2023
The foreign exchange market, also known as forex or FX, is a complex industry. By dealing with multiple currencies all around the world, along with its rapid pace and volatile nature, there’s a lot to consider when it comes to processing trading transactions.
Just like other industries, forex platforms still need a merchant account and payment gateway to process payments, but it’s not always that simple due to its high-risk classification.
What do we mean by that and how can forex merchants combat this? We’ll cover it all so you can choose a payment provider that helps your business strive.
What's in this article?
What is a forex merchant account?
Reasons forex merchant accounts are classified as high-risk
Secure forex payment processing
Why can it be difficult for forex brokers to find a payment gateway?
Why you should choose Total Processing as your forex payment gateway
What is a forex merchant account?
A forex business will need a high-risk merchant account to increase its acceptance rate. Without one, banks are more likely to decline any transactions you or your customers wish to make. In general, they work the same as a traditional merchant account, but they do have some differences to compensate for the increased risk. This includes higher processing fees and increased protection against fraudulent activity.
Reasons forex merchant accounts are classified as high-risk
Forex merchant accounts are sometimes considered "high risk" because of a few reasons that make them a bit more complex. Let's break it down:
Currency value is up and down: Currency can be so volatile, and this unpredictability can make it harder for banks to predict how much money might come in or go out.
Global nature of forex: Forex trading happens all around the world, involving various countries and regulations. This international aspect can create challenges for banks to keep up with all the rules and keep transactions safe.
Higher chargeback risk: Chargebacks happen when customers dispute a transaction. In forex, because of the nature of trading and currency volatility, customers might change their minds more often, leading to more chargebacks.
Increased risk of fraud: The fast-paced nature of forex can attract some fraudulent activity. This means banks need to be extra cautious to ensure that everything is legit.
Regulation changes: Regulations in the forex industry can shift, making it tough for banks to stay compliant all the time. This uncertainty adds to the "high risk" label.
Customer knowledge varies: Some forex traders are experts, while others are just starting out. This difference in customer knowledge can lead to more mistakes and issues, which banks need to be prepared for.
Unpredictable profits and losses: Forex trading can result in big wins or big losses. This financial uncertainty can affect how consistent the incoming money is for the merchant, which banks consider when assessing risk.
Remember, being labelled "high risk" isn’t a bad thing. It's more about the complexity and challenges involved. Banks might just need to be extra careful and have special safeguards in place to make sure everything goes smoothly for both merchants and customers.
Secure forex payment processing
With the unavoidable nature of forex trading being a risky business, you’ll want to take advantage of the tools available to ensure secure processing, including:
PCI-DSS Level 1 Protection – A secure payment gateway will need to be compliant with this bare minimum security regulation.
Blacklists – Block certain payments to protect yourself from fraudulent activity.
Risk alerts – Receive early warnings for chargebacks so you can act early.
Smart dynamic routing – An acquire agnostic gateway will connect merchants to multiple banks so that any soft declines can be retried with another acquirer.
In-depth reporting – Real-time analytics and customer insights will help you keep on top of transactions and predict behavioural traits.
Why can it be difficult for forex brokers to find a payment gateway?
Finding a payment gateway if you’re in the forex industry can be tricky. You see, forex trading involves dealing with money from all over the world, like changing dollars to euros or sterling. But not all regular payment gateways are set up to handle this.
High-risk specialist, Martin Brindley, said: “Forex merchants need a special kind of payment gateway that can smoothly process all different currencies from around the world. They also need to follow certain rules and regulations to keep everything safe and legit, which can be challenging to stay on top of. That’s why finding the right payment gateway is even more important for high-risk businesses.”
Things to consider when choosing a forex payment gateway
Alternative payment methods and currencies: Ensure the gateway supports global transactions and is flexible to match your international customer’s preferences.
Security measures: Look for strong encryption and risk tools to protect transactions and your bottom line, as well as following regulatory compliance in relevant countries.
Compatibility: Verify if the gateway integrates well with your website or trading platform. You want to ensure that the gateway has the capabilities to scale as your business does.
Transaction speed and cost: Trading can be time-sensitive, so prioritise gateways that process transactions quickly at a low cost.
Customer Support: Reliable customer assistance is invaluable!
With these practical points in mind, you'll be able to choose a payment gateway that suits your forex business needs effectively.
Why you should choose Total Processing as your forex payment gateway
At Total Processing, we specialise in providing payment solutions for high-risk businesses. With a secure payment gateway, access to more than 300 acquires and more than 198 alternative payment methods to choose from, we can offer a bespoke solution and flexible pricing to suit your business model.
Manage your payment solutions, in-depth transaction data and fraud suite all in one unified platform, so you can easily scale your business and increase your acceptance rates.
