The Guide To Efficiently Organizing Your Forex Broker’s Payment System

The trading platform offered by a Forex broker is an intricate system capable of a wide range of difficult operations. One of these responsibilities is handling customer deposits of payments. One of the most time-consuming challenges that a startup may encounter is coordinating with payment systems to ensure the proper functioning of this crucial procedure. Let’s speak about the best practices for establishing a payment system for a Forex broker and the factors that must be considered.

Getting down to fundamentals

Get the fundamental ideas out of the way first. From the perspective of a company owner, how do foreign exchange (FX) payments work? Basically, we’re talking about integrations with foreign currency payment systems that handle customers’ deposits and withdrawals. For traders’ ease and to guarantee a sufficient trading turnover on a platform, as well as for the sake of keeping a worldwide corporate presence, robust FX payment solutions are required.

First, there are talks to be had with the payment processor

Most payment processors still see the foreign exchange market as a high-risk industry, which is unfortunate. Many service providers are still influenced by a bias that stems back to when the market was flooded with dishonest businesses. There are two primary justifications given for a negotiation’s unfavorable outcome:

  • A high rate of chargebacks (payment refund requests);
  • There has been a lot of fraudulent activity, such using stolen cards to make purchases.

Impact of Licensing on Your Payments Infrastructure

The kind and level of regulation you operate under might have a significant impact on your engagement with a payment solution provider. For instance, businesses with roots in offshore jurisdictions are increasingly challenged to expand their operations using conventional payment methods. Since they are subject to strict regulations, banks and payment processors are understandably wary of working with brokerage firms that have an offshore license.

Fintech Harbor Consulting’s financial technology lawyer is a ready-made software solution that includes a crypto processing service that may be used as a supplementary payment channel in jurisdictions with stringent regulatory requirements. There are no transaction fees for making deposits or withdrawals, and fiat currency converted from cryptocurrency may be deposited directly into a user’s account.

Protecting Financial Transactions

The broker has almost all responsibility for ensuring transaction channels for deposit and withdrawal, hence substantial resources must be spent in this area. There is a wide variety of tasks involved in ensuring the safety of the brokerage industry’s payment systems right after obtaining a Forex license:

  • Procedures for Know Your Customer and Anti-Money Laundering that ensure transactions are legitimate and related to actual people;
  • The anti-carding system, which may include preventing withdrawal transactions from being processed using any method other than the original card used;
  • Fraud detection in client accounts by keeping an eye out for things like large deposits and withdrawals with no corresponding trading activity, ID mismatches between the trader’s safe and the account using it to make FX trades, and so on.
  • The quantity of the deposit is pegged to the thoroughness of the verification processes, which culminates in documented proof of the source of the money.

Researching the Ideal Clients

Remember why you’re setting up your brokerage firm’s payment systems at the end of the day. Your customers will utilize them, therefore how much you invest in establishing the FX payment channels and how much you waste depends on how well you understand their demands. 

Most customers will assume that you accept major credit cards and maybe even bank transfers on your site. Is it really important to link terminals? Is WebMoney a requirement for the first release of the service? The analysis of your clientele is the key to finding the answers to these inquiries.