With a daily turnover of $6.6 trillion, the foreign exchange market, also known as Forex or FX, is the world’s most traded market. A foreign exchange market operates 24 hours a day, where global currencies are bought and sold electronically.
By exchanging one currency for another, traders speculate on whether one currency will increase in value against another with the ultimate goal of making a profit by buying low and selling high.
The ease of sending money all over the world with Forex trading is one of the reasons why this sector is growing rapidly. However, forex assets are considered highly liquid because of their high trading volumes. Therefore, acquiring banks always classify Forex businesses as high-risk, making it difficult for business owners to open merchant accounts.
Getting started with Forex payments
Based on where you live, you’ll have different requirements to become a Forex merchant. For example, you’ll need a license and a business presence in Europe if you’re a European Forex merchant.
You should present your revenue earnings to the acquiring bank as soon as you can after you secure legal and corporate headquarters. To qualify, you need at least 3 to 6 months’ transaction processing history and a low chargeback rate.
Compared to other industries, Forex is prone to more fraud and chargebacks, and banks are worried you’ll be a liability. Adding two-step authentication such as 3DS2 to your checkout process could help you put your bank’s mind at ease, especially if your processing history is not that extensive.
Partner with a payment provider that offers a straightforward 3DS2 version to make your customers’ experience frictionless and keep your chargeback and fraud rates low.
What can affect your Forex Account eligibility?
FX businesses are often inspected for anti-money laundering (AML) and Know Your Customer (KYC) policies and controls, given the high-risk characteristics we spoke about earlier. The following areas are also habitually reviewed by banks to determine if your FX business is eligible for a merchant account:
Licensing. A license from a local regulatory body shows whether an acquirer is based in the country where they want to open an account or in another jurisdiction. It is, therefore, crucial for any FX business to acquire the right trading license.
Trading volume. As a merchant, it is imperative to keep in mind that merchant acquirers are ultimately motivated by financial considerations, so if you are able to process more transactions per month, your risk levels could be counter-balanced by volume. You may have a higher chance of getting approved.
Accurate transaction records. A detailed trail of recording and reconciling transactions, as well as accurate account keeping, will increase your chances of getting approved for a Forex Merchant Account. Having historical transaction records makes it easier to verify your financial credentials.
Cross-border transactions. A payment gateway that supports multiple currencies and cross-border transactions is a must for your business. As you don’t want downtime at crucial moments, it should also support real-time payments and have maximum possible uptime.
Choosing the right merchant acquirer
Using Trust Payments, you have access to over 50 countries with alternative payment methods, offering over 130 currency processing options as standard.
Our Forex offering has been running since 2018 and has had 3.43 million processed transactions across 136 countries. Our payment gateway is simple to understand, intuitive, fast, and safe – of course, with full payment security and two-factor authentication so that consumers are protected when they pay.
We offer merchants access to 14 settlement currencies, together with flexibility on complex company structures, as we know that a large portion of firms are based offshore and may have intricate ownership structures. Daily settlements allow merchants to keep a healthy flow of deposits and withdrawals (OCT Payouts) daily. This allows for clear record keeping and a comprehensive view of business performance.
Approval ratios are perhaps the most important aspect for Forex merchants when onboarding new payment gateways, as these determine the effectiveness of the payment process. We are principal members of both the Visa and Mastercard schemes, allowing us to process payments globally and giving merchants the benefit of being onboarded without excess red tape.
Lastly, our merchants also benefit from detailed reporting into each processing country, which allows them to be proactive in finding solutions by:
Identifying weak processing geographies for better market decisions;
Seeing a breakdown of individual transaction decline reasons for addressing issues quicker;
Viewing overall transaction volumes to understand the bigger business picture better.
Contact us for the best Forex merchant account and advice and guidance on new services that will suit your needs.