Forex merchants report the following benefits from electronic check processing:
In the past couple of years, Forex merchants had to meander their way through increasingly restrictive regulations imposed by the National Futures Association (NFA). The debacle caused by the Swiss franc spike in January 2015 dealt a painful blow to an industry that still had to come to terms with a historic low in terms of assets value just a month prior.
According to the statistics provided by the US Commodity Futures Trading Commissions, the US retail FX client assets dropped to an unprecedented $551 million during the month of December 2014. The numbers released for the second quarter of 2015 confirm the same trend.
The inherent volatility of forex trading combined with progressively stricter regulations turned the US market into a difficult business environment for forex brokers. One of the significant rule changes that took place last year was the enforcement of a ban on the use of credit cards in funding forex trading accounts.
After a detailed analysis of the business practices of forex dealers, the NFA noticed that many inexperienced traders recklessly used their credit cards and frequently lost money that had been borrowed on interest from a bank. The change is supposed to discourage this type of risky behavior which is potentially catastrophic in terms of personal finances. The ban has been applied solely for credit cards; debit cards are still allowed.
As it frequently happens in business, changes in card processing made it more important than ever for the Forex industry to offer additional payment options to customers.
ACH payments & echecks are the most obvious choice. In fact, GAIN Capital started the trend when they announced in October, 2014, that they will make ACH payments available to traders, as a means to compensate for the credit card ban.
The switch from credit card to ACH comes naturally in the context of the unquestionable popularity and reliability of the ACH network. In addition echecks can be processed through bank-to-bank transfer based on Check 21 technology which allow for extremely fast clearing of transactions.
The ease and accessibility of the payment process explains why customers are inclined to ACH and echecks more and more. Given the fact that companies in the Forex firms are often declined by payment processors due to the risk associated with the industry, it stands to reason that they should seek to reduce their dependence on elusive card payments.
E checks are a familiar and trusted method of payment for US customers. Accept echeck payments from customers to fund trading accounts. Payout customers with ACH credits. Gain a competitive advantage in the marketplace.
Are you a Forex merchant that wants to accept electronic check payments?