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Guide To Forex High-Risk Merchant Accounts ms payment logos

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Forex High-Risk Merchant Accounts & Best Payment Processing Solutions

The foreign exchange trading industry is considered high-risk when applying for merchant accounts for several reasons including the high numbers of chargebacks, the complexity of international regulations, fluctuating currency values, and the potential for money laundering.

In this guide, we will explain how you can overcome these challenges to find and successfully apply for a high-risk Forex merchant account. 

As experts in card processing and merchant accounts for high-risk businesses, we can advise on the best solution for your business if you complete our short form here

Why Are Forex Trading Businesses Considered High Risk?

Businesses that deal in Forex are generally regarded as high-risk because of the volatile nature of international currency markets. 

Beyond constant price fluctuations and tight margin calls, there are several other reasons why it’s difficult to get accepted for a foreign exchange payment processing account:

  • No clear regulations: Since Forex brokers deal across global currency markets, there is no unified set of rules or even a regulatory body to govern trading on an international level. This makes it difficult to determine the relevant jurisdiction when disputes arise. Banks are often reluctant to operate in any area that lacks a robust regulatory framework.
  • High amount of chargebacks: In common with other industries that are deemed ‘high-risk’, Forex merchant account holders are often subject to chargebacks. Forex dealers and brokers frequently handle payments ranging beyond £1,000, elevating the cost and risk level associated with any chargebacks that occur.
  • Money laundering concerns: This is a major issue within Forex and other over-the-counter (OTC) markets. Some merchant acquirers (the banks that process card payments on behalf of businesses) are reluctant to offer their services to foreign exchange traders, brokers and platform providers because of this. Failing to maintain the right policies and procedures could lead to a Forex business and even their bank becoming subject to sanctions for facilitating financial crime.

Despite these roadblocks, it is possible to get approved for a Forex trading merchant account. 

Although banks are still likely to class Forex businesses as high-risk, their concerns can usually be addressed provided that the applicant is properly licenced and has effective anti-money laundering (AML) and Know Your Customer (KYC) policies in place. 

Factors Affecting Eligibility For A Forex Merchant Account

When reviewing applications for Forex business high-risk merchant accounts, banks and payment processors are likely to weigh up risks of opening an account with the income that Forex trading activity can generate.

When making an assessment, merchant acquirers will usually consider the following factors:

  • Licence Status: This shows whether the applicant is authorised by the Financial Conduct Authority (FCA) or another regulatory body if they operate from outside the UK. Foreign exchange brokerages usually cannot apply for a merchant account unless they have acquired the right licence.
  • Transaction Statements: Well-established businesses stand a better chance of getting approved by Forex payment processing providers since it is usually easier for them to prove their financial credentials with historical transaction records. Accurate and well-kept accounts can significantly improve your chances of getting accepted.
  • Trading Volume: Merchant acquirers are ultimately driven by financial concerns, so higher volumes of monthly card transactions can help balance risk levels and improve your chances of getting approved.

What Types of Forex Merchant Accounts Are There?

Forex businesses are used to accepting payments in a variety of formats and an even greater selection of currencies. Time is of the essence when placing trades in a market that’s constantly changing.  

Credit and debit card payments offer the fastest and most convenient way to fund a trading account, which is why online payment systems for Forex are so popular.

The following are some of the most widely used types of Forex merchant accounts:

  • Credit Card Processing Accounts: Forex brokers often seek credit and debit card payment processing solutions as they offer the fastest way to move money for foreign currency trading purposes. Unfortunately, the regulations imposed by Visa and Mastercard can make it difficult to maintain a Forex credit card processing merchant account.
  • Cheque Processing Accounts: Cheque payments are a popular alternative to credit and debit card Forex transactions. Although settlement times are measured in days rather than hours, comparably fewer restrictions mean that these merchant accounts can be easier to maintain.
  • Cryptocurrency Processing Accounts: Although cryptocurrency trading is becoming more popular, few Forex traders use digital currencies as a preferred method of transferring money. The process of completing a transaction using cryptocurrency is far more complex than simply paying with a card, and the value of a digital currency is unstable.
  • Bank Transfer: Wire transfers were widely used in the past but they’re now seen as inconvenient because of the many forms that customers must complete when trying to make a deposit. The risks are comparable to credit card processing but transactions can take hours or days to complete.

How to Obtain a Forex Trading Merchant Account

Applying for a foreign exchange payment processing account is not all that different from applying for any other form of merchant account. Despite this, there are some things you can do to ensure that your application is in order and to improve your chances of getting accepted.

What You Need to Get Started

The eligibility criteria for opening a Forex trading merchant account vary depending on where your business is located. 

Forex merchants and brokers applying for a European payment processing account must have a genuine business presence – for instance, by establishing a legal and corporate headquarters within Europe.

Once you’ve met the basic acceptance criteria and regulatory hurdles, you’ll need to provide financial records. These should include three to six months of transaction processing history, and show that you have a reasonably low chargeback rate.

If you’re unable to provide financial records or a payment processing history, it’s important to show the bank what steps you will take to ensure payment security and limit chargebacks. This might include using non-intrusive 2-factor authentication (2FA) systems that still allow customers to make speedy payments.

Documentation Required to Apply

Different merchant acquirers will request their specific list of documents in support of your account application but you will typically be required to provide:

  • Ownership details for the account to which processed funds should be remitted
  • Three months of bank statements
  • Three to six months of statements showing payment processing history
  • Corporate documents to establish ownership of your business
  • Photo-ID (often in several forms) to satisfy AML and KYC checks
  • Utility bills to provide proof of address
  • Domain registration information (for online Forex payment processing)

International Forex merchant acquirers may require additional documentary proof of minimum monthly processing values. 

Providing comprehensive and well-kept records could improve your chances of getting approved for a foreign exchange payment processing account.

Should my Forex Exchange Business Have a Licence Before Applying for a Merchant Account?

Yes, merchant acquirers do not usually accept applications from Forex businesses that do not have the correct licences in place for their territory or jurisdiction. You should therefore ensure that your business is fully licenced and compliant with local laws before making a Forex merchant account application.

Working with a payment processor that understands the Forex industry and specialises in providing high-risk merchant accounts can also improve your chances of getting approved. 

We can help you to find and apply for an account with specialist merchant acquirers and payment gateway providers that have experience with the unique challenges Forex businesses face – so contact our team for help and support.

What to Look for in a Forex Payment Gateway Provider

An online payment gateway is a must-have for any Forex broker or dealer wishing to operate on the internet. They offer Forex credit card processing and make it easier to take payments quickly and efficiently.

Not all payment gateways are made equal, and so Forex businesses should look out for the following when trying to choose a merchant services provider:

  • Strong Security Measures: Customers prioritise the safety and security of their financial details when completing transactions online. The best Forex payment processing providers offer a suite of security measures to keep your customers’ money and personal information safe.  
  • Fraud Prevention Measures: Forex has historically struggled to overcome issues with fraud and financial crime. Working with the right online payment gateway provider could help you prevent fraud and reduce risks for customers transacting with your business.
  • International Payment Processing Capabilities: Forex traders can’t escape from the need to deal in multiple currencies. It is important to find a payment gateway that can be configured to accept payments in a variety of international currencies.

Find out more about online payment systems by reading our dedicated payment gateway page here.

Benefits of Using a High-Risk Merchant Bank for Forex Payment Processing

Not only do high-risk merchant account providers understand the unique issues faced by foreign currency traders and brokers, but they are also likely to be experienced in underwriting applications for higher-risk activities.

Beyond this, there are many reasons why a high-risk merchant bank could be your best option for foreign exchange payment processing:

  • Lower rates than standard merchant acquirers who may increase prices in line with higher risk levels.
  • The ability to process high volumes of international transactions using many different global currencies.
  • Enhanced fraud detection and prevention tools to keep you and your customers safe.
  • The capabilities to accept multi-channel payments including from online payment gateways and virtual terminals.
  • Integrated credit card processing systems for Forex transactions, working with your existing website, CRM, and accounting systems to provide a slick payments solution.

How to Choose the Best Forex Merchant Acquirer for Your Business

We’re experts at finding and securing Forex merchant accounts and payment solutions for brokers, dealers, and other currency exchange businesses. 

Through specialist knowledge and a network of connections, we match our clients with some of the most competitive merchant services providers and ensure that their unique needs are met.

If you’re not sure how to choose the best Forex high-risk merchant account or have recently had your account terminated, contact us for impartial advice and quotes for new services that will suit you.

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