Payments Service Providers for Forex and Crypto

The implementation of a robust payments system is a task of immense importance for the smooth functioning of any new business, but in the case of a forex brokerage it becomes even more vital, since no brokerage could properly function or survive without having in place such a payments system and the backing of a reliable payments system provider.

The post below aspires to serve as an initial guide on the basics on the matter of payment systems’ providers, exactly because making the right choice in this regard will enable a forex brokerage to ensure good fluidity, conversion and cost efficiency.

What is payment solution provider

A payment service or solution provider (PSP) serves as an intermediary between a consumer and a supplier and in the case of forex trading it is the channel through which a brokerage can pay to and receive from clients, electronic payments.

In this sense it is a more convenient alternative to a traditional merchant account, since through a PSP the brokerage transactions can be executed in a much simpler manner, generally come with lower associated costs and offer a more extensive list of alternative options that fit the differing needs of the different types of brokerage companies.

However, a brokerage will still need to have a merchant account in which to receive and temporarily store its sales funds, but through the PSP it has the channel that handles the transfer of payments from the moment a customer supplies their banking details to the moment funds are transferred to and from the customer to the forex broker and vice versa.

There are several features one can benefit from through the right PSP partner, chief amongst them being

  • The extra security that can help avoid fraud, especially card fraud The ability to accept payments from different types of cards and alternative electronic payment methods
  • Transparency and better control through the provision of extensive transaction reports The safety of expert technical support readily available to avoid any glitches in the execution of payments.
  • As the forex landscape is varied and diverse, habited by vendors with differing needs, so is the PSP spectrum, including several providers who offer different types of services. Thus, finding the perfect match is a decision that needs careful consideration and ultimately depends on the requirements of each brokerage business.
  • There are many factors to take into account when trying to discern which PSP to choose as a forex brokerage, some of which include the risk profile of the provider, the countries it operates in, its technical aptitude and the kind of service it provides (i.e. if it servers simply as a bridge between a retail website and a merchant account, or if it provides a full-range payment solution based on an in-house merchant account). Naturally then, PSPs come with different price tags for their services and this not only depend on the depth and breadth of the actual services offered, but also on how secure, reliable and well established in the market a PSP is.

Why and How to Find the Best Payment Service Provider

payment solution providers

Besides being a necessary part of doing business as forex brokerage, partnering up with the right PSP could be very beneficial for the overall performance of a brokerage and greatly push it towards success. So, why resort to a PSP? Because with a reliable PSP handing all payment issues efficiently, you can focus on your core business of attracting customers, while at the same time offering such customers much safer management of their data and more effective handling of their payments. Also, you need a PSP because it allows you to accept payments via various methods and channels, including all types of credit and debit cards, direct wire fund transfers and online e-wallets such as PayPal, all from one place. Moreover, the right PSP will also get you better conversion rates, thus boosting your overall commercial performance.

Declined transactions are a commonplace party pooper for brokers in the online forex trading business. It makes little difference if the transaction is declined due to a problem in the prospective client’s bank, their credit card or a legal barrier in their country of residence. The end result is equally bad. The transaction is declined, the customer cannot deposit funds and the lead is lost. This is another reason why you need an established, expert PSP provider, who can ensure the smooth processing of payments. This need is further exacerbated by the fact that forex trading transactions are classified as higher risk and thus fall under tighter scrutiny and controls, that only a truly professional and reliable PSP could help you navigate effectively.

forex transaction declined

The critical role of the right Forex Payment Service Providers (PSP) and Payment Gateways for your brokerage

Whether you set up an independent brokerage or opt for a white label solution, in order for payments to be processed you will need to open a merchant account. Your PSP could arrange this for you, providing you with access to major international banks, through which the funds transfers required for your forex business can then be accommodated.

Such dedicated FX merchant accounts, which are of critical importance for any forex brokerage business, can only be established through third parties with proven track records in this line of business. Banks are wary of taking on new forex brokers as clients due to the inherent high risk involved, both in terms of potential losses to be incurred but also because of the volume of transactions that may be created. This is another reason why you need a reliable PSP by your side, who will get you access to big banks and merchant accounts, and help your brokerage develop into a solid business.

Your PSP will be responsible to ensure that all forex transactions are executed timely and that the process runs smoothly irrespective of the number or volume of transactions that must be processed and executed at each given time. Since a brokerage depends on collecting commission from customer trades, it is important to have by your side a PSP that will keep your flow of customer deposits unhindered, round the clock, on a 24/7 basis.

Also, the right PSP will offer you complete transaction protection and take full care of fraud prevention concerns, thus enabling you to offer higher customer security that will make your offering more appealing to potential customers. Depending on robust settlement and processing systems is at the core of your endeavour to succeed in the forex business, and only a damn good PSP could get you those.

If you feel that finding the right PSP is too daunting a task, you can always consider to partner up with a white label solution provider, who will provide you with an all encompassing, complete turnkey brokerage solution, including the assignment of the right PSPs for your own brokerage. Such a partner can lead you towards the right direction especially if you are a new, aspiring entrepreneur in the wild world of forex brokerages.

 

Alternative payments channels for brokerages

Payment Gateway for Forex Brokers and Crypto Exchanges

As the financial world is constantly changing, this opens up new opportunities for the offering of alternative payments solutions, based on cryptocurrency. In fact, today there is a marked increase in demand both for cryptocurrency payments as well as solutions facilitating this type of payments. The reason users are particularly attracted to this mode of payment, is the fact that they constitute a secure, safe and transparent way to conduct transactions. It is thus not surprising that many forex brokerages have started integrating crypto payment services to their client offering.

How Are Cryptocurrency Payments Enabled?

Cryptocurrency payments are enabled though a cryptocurrency payment gateway, which in simple words is the technology that enables businesses to accept transactions in cryptos such as Bitcoin, Ethereum, Litecoin, Ripple and others.

Through this payment gateway one can send, receive, store, exchange and accept cryptocurrency payments online, safely, securely and cost-effectively. This solution is nowadays used widely by forex brokers, cryptocurrency exchanges, hedge funds, and other online merchants, all of whom want to put at the disposal of their clients this additional, alternative payments method that is secure and comes with lower costs than other methods, such as for example credit card payments.

The crypto payment gateway enables its users to choose between two different payment methods, namely crypto/crypto and crypto/fiat. In the former case, the client pays in their chosen cryptocurrency and the payment is received in the chosen cryptocurrency of the vendor, while in the latter the client pays in cryptocurrency and the vendor receives fiat currency, e.g. dollars, euros or any other, in their account balance.

Benefits of Choosing Cryptocurrency Payments

Besides being simple and straightforward, the most important advantage or benefit when accepting cryptocurrency payments is the ability to serve different account types at much lower fees than those associated with credit and debit card payments. The saving on both sides of the transaction is even greater in the forex brokerage setting, where a great volume of transactions is being executed on a daily basis. This new trend holds great promise and potential and it seems to be here to stay offering a great payment system alternative for customers and brokers alike.

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