The forex industry is among the most active markets in the world.
According to Bloomberg, daily currency trading volumes had risen from 2016’s $5.1 trillion to $6.6 trillion on average in April 2019. And it’s no surprise.
The forex market presents an excellent opportunity for both individual and institutional traders to make (potential) profits on currency trades.
But to do so, forex traders need a payment gateway solution that allows them to deposit and withdraw funds rapidly with reasonable transaction fees.
What Is a Forex Payment Gateway?
A forex payment gateway serves as a bridge between the currency trading platform and its users.
Forex merchants integrate the payment gateway directly into their platforms, allowing brokers to accept transactions from their clients.
While traders use the forex payment system to fund their accounts and withdraw money, the gateway transfers the sum collected from the users (e.g., trading fees) to the broker’s merchant account.
In exchange for the service, the forex payment gateway deducts a percentage-based or a fixed fee (or both) from each transaction before distributing the funds to the merchant.
Why Is it Difficult for Forex Brokers to Find a Payment Gateway?
When they first try to open a merchant account at a traditional payment gateway solution, forex businesses often find themselves with a rejected application.
But what is the reason behind this phenomenon?
Since forex brokers experience massive trading activity on their platforms, they process large volumes of transactions every day, which drives up the businesses’ chargeback rates.
As a result, payment processors have categorized forex service providers as high-risk businesses, meaning that brokers will likely face rejected applications at traditional gateway solutions.
Alternatively, forex brokers can open a merchant account at a dedicated payment gateway solution specializing in high-risk industries. However, these services often take advantage of the situation by charging excessive fees and holding customer funds for longer periods.
Fortunately, there’s a third option.
E-wallet solutions like STICPAY feature advanced security and anti-fraud features with strict KYC/AML monitoring, allowing them to offer payment gateway services to licensed businesses even in some high-risk industries like forex.
However, it’s crucial to highlight that the above-mentioned payment solution only approves merchants that strictly comply with the regulatory laws of all nations they do business in.
What Should Merchants Consider When Choosing a Forex Payment Gateway?
Before choosing a payment gateway solution, forex businesses have to take multiple factors into account, such as:
- Speed: Forex traders have to act fast to discover opportunities and make a profit on currency movements. For that reason, merchants have to choose a payment gateway that processes customer transactions quickly. To keep cash levels high, foreign exchange businesses also need a provider that doesn’t hold merchant payments for longer periods.
- Fees: Since forex brokers make a profit from price spreads and other trading fees, a cost-efficient payment gateway is crucial to keep their business profitable.
- Currency exchange: High currency conversion costs can discourage traders from using brokerage platforms. For that reason, it’s essential to select a forex payment gateway solution that offers decent exchange rates. In an even better case, the service provides multi-currency accounts for both merchants and their customers to keep currency conversion costs at a minimum.
- Payment methods: While some customers prefer speed, others are willing to sacrifice time in exchange for saving money on deposits and withdrawals. For that reason, it’s crucial to offer multiple payment methods for traders and choose a gateway solution accordingly.
- Security: Since the forex industry faces increased risks of chargebacks and fraud, merchants need a gateway solution that keeps their customer funds secure.
How to Integrate a Forex Payment Gateway?
To set up a payment gateway, forex brokers have to first register for a merchant account at a service provider.
After a successful verification process, the forex payment gateway solution can be integrated via an application programming interface (API) directly to their platforms.
For easy setup, forex merchants can use the API documentation of the service provider.
STICPAY: a Convenient Forex Payment Gateway Solution for Businesses
As a forex broker, you could apply for a merchant account at traditional payment gateway solutions.
However, they will decline your application.
Since high-risk processors charge massive fees and feature slow transfer speeds, forex merchants often find themselves without a decent payment gateway solution.
Fortunately, there is a solution to your problems.
STICPAY, the award-winning e-wallet platform, offers a payment gateway service for companies in low-risk industries. Apart from that, STICPAY also features high-risk merchant solutions for licensed forex businesses that comply with the appropriate regulatory laws.
With a presence in over 190 countries, STICPAY offers multiple payment methods for traders to fund and withdraw money from their accounts, including:
- Visa
- MasterCard
- UnionPay China
- Bank wire
- Cryptocurrencies (Bitcoin, Litecoin, Ethereum)
Besides international transfers, STICPAY has partnered with financial institutions in seven APAC nations, including the Philippines, Japan, Indonesia, Malaysia, Singapore, China, and South Korea.
As a result, instead of waiting multiple days for payments to process and paying expensive fees for international transactions, citizens of the above nations can benefit from fast and cost-efficient transfers via STICPAY’s local bank wire solution.
Furthermore, due to the increased consumer demand, STICPAY plans to expand its coverage for the service to multiple countries and regions in the near future.
STICPAY supports 29 national currencies and 19 languages and offers competitive fees for merchants and their customers. While the company charges 1.8% for processing cryptocurrency transactions, it only costs forex businesses 2.5% + $0.3 to accept fiat payments from their clients.
STICPAY takes the safety of its clients seriously. For that reason, the e-wallet service features advanced anti-fraud and security measures — including storing client funds in segregated accounts with uninterrupted access -, with strict KYC and AML checks on both merchants and end-users to protect their funds.
Furthermore, since all funds on STICPAY are secure and indemnified, merchants only face limited risks of chargebacks.
There is also a 24-hour customer support service available for merchants and clients to answer their queries.
Merchants only need to register and pass the mandatory KYC and AML checks to get a merchant ID, open multiple currency accounts, and start accepting payments from their customers.
Set Up a Forex Payment Gateway With STICPAY
It only takes a few minutes for merchants to get started with STICPAY.
After creating an account and submitting the necessary documents, STICPAY’s customer success team will take a look to verify their accounts.
Upon successful verification, forex businesses can integrate STICPAY’s payment gateway solution via their merchant IDs and an open API connection.
Ready to get started?
Register a merchant account with STICPAY now!
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Originally published at https://www.sticpay.com on November 18, 2020.
