The Forex industry is considered to be the most liquid market in the world and it is worth $1.93 quadrillion. About 4 million traders trade using this platform in more than 170 currencies. Over the years, technology has impacted immensely when it comes to the development of foreign exchange industry. Being a high risk business, a faster and safer payment processing mechanism is required for Forex.
Forex is a virtual market which is used for buying and selling of different currencies. Here different currencies are traded as the market determines their price. The determined price is called Foreign Exchange rate. Forex do not have any centralized location and it operates over the electronic medium.
For Forex, which deals in converting the currency of one country into another’s, an efficient and quick processing mechanism is required.
The Popular Mediums used in the Market
- Debit and Credit Cards
- Bank Wires
- Digital Wallets, like PayPal, Skrill and others.
What are the Standards that need to be met by a Payment Processing Mechanism?
Before choosing a payment processing system for Forex trading, it needs to be made sure that the following standards are met
- Security: There has to be multiple layers of security in order to prevent scams and frauds. Various important details like users data identification, payment details, the amount traded needs to be secured.
- Acceptability: The payment processing mechanism which is being used should be accepted globally. The method of payment used should be accepted by brokers and traders from all over the globe
- Customer Care Service: It needs to be made sure that the payment processing system has an efficient customer care department, which can be accessed during any point in time.
- Legality: It is important to make sure that the payment gateway used is legal and has been authorized by the regulatory bodies.
- Time Efficient: It is important to choose a method of payment which do not take much of a time for completing the transaction.
Risks Involved In Forex Trading
Here are some of the risks which are involved in the process of trading in the Forex market.
- Average Transaction Amount is quite High: As it deals in international transactions, the transactions carried out in Forex are quite expensive
- Risk of Fluctuation: The trend of currency fluctuation is quite common and frequent, which makes it a very risky platform.
- High Chargebacks: Due to the fact that high volume of transaction is carried out throughout the globe, the level and volume of chargebacks in Forex is quite high.
In order to run and operate a Forex business in a smooth and efficient manner, it is very important for the traders to select a proper Forex payment solution. Security is one of the most important aspect that needs to be taken into consideration while selecting a payment gateway. However, other factors like acceptability, smooth and efficient processing and others are also needed to be taken into account by the traders.