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Forex Trade Industry and Payment Gateway

The world's currencies trade on the forex market, also known as currency exchange. The daily trading volume exceeds $5 trillion. The industry is dynamic, and the majority of merchant account providers consider it high risk.

Forex trading Risk

Currency trading is both risky and difficult. The interbank market is regulated to varying degrees, and forex instruments aren't standardised. Forex trading is almost entirely unregulated in some parts of the world.

The interbank market is made up of banks from all over the world dealing with one another. Banks must assess and recognise sovereign and credit risk, and they have put in place internal procedures to ensure that they are as secure as possible. This type of regulation is enforced by the banking industry to protect each participating bank.

The market pricing system is focused on supply and demand since the market is created by each of the participating banks making offers and bids for a specific currency. Rogue traders have a tough time influencing the price of a currency because the system has such big exchange flows. This scheme aids in market transparency for investors who have access to interbank trading.

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The majority of small retail forex traders work with unregulated forex brokers/dealers who can (and do) re-quote rates and even trade against their own customers. There may be some government and industry legislation in place depending on where the dealer is located, but these safeguards are inconsistent around the world.

Why is it considered a high-risk activity to process foreign exchange payments?

Trading or exchanging currencies in Forex carries its own set of risks, as currency values can fluctuate due to a variety of external factors. Until issuing an account, merchant accounts and Forex payment gateway providers can evaluate potential risk vs. profits. You should expect to pay slightly higher merchant account fees due to the high-risk nature of the industry.

Being classified as a high-risk merchant account will make securing a suitable account for card processing difficult. It's possible that certain mainstream vendors would reject your application outright. We work with high-risk brokers who have experience placing forex merchants; as a result of their knowledge, your application will be packaged correctly and is more likely to be approved.

The Most Common Forex Currencies in the World

The Forex market now includes over 170 different currencies from all over the world. The United States Dollar is the most widely traded currency on the planet. The US Dollar, also known as the "greenback," is used in nearly 73% of global transactions.

  1. The Euro is the second most exchanged currency, accounting for 39.7% of all transactions.
  2. The third most exchanged currency is the Japanese Yen (JPY), which accounts for 25.7 percent of all trades.
  3. With 20.7 percent of all trades, the British Pound (GBP) is the fourth most exchanged currency.
  4. The Australian Dollar (AUD) is the fifth most widely traded currency, accounting for 11.48 percent of all transactions.
  5. With 8.0 percent of all trades, the Canadian Dollar (CAD) is the sixth most exchanged currency.
  6. The Swiss Franc (CHF) is the world's seventh most exchanged currency, accounting for 7.0 percent of all transactions.
  7. With 5.7 percent of all trades, the New Zealand Dollar (NZD) is the eighth most traded currency.

Statistics on the Foreign Exchange Market

The Global Foreign Exchange Market's Size and Regular Turnover

The Forex market is the world's largest financial market, outnumbering the equity, bond, and commodity markets combined. The daily volume of the forex market has increased from US$ 1.2 trillion in 2001 to US$ 6.6 trillion in 2019. The total value of the global Forex trading market is $2,409,000,000,000 (or $2.4 quadrillion).

The only sector that is open 24 hours a day is Forex (except for weekends). The Forex market is three times the size of the futures market, and 35 times the size of the stock market.

Processing of credit cards in foreign currencies

As previously stated, the risk vs. income of Forex traders is determined by three key factors:

  1. If you don't have a licence approved by the FCA (Financial Conduct Authority), you won't be eligible to apply for a merchant account.
  2. If you are a well-established business, transaction statements can be useful when applying for Forex payment processing with a new provider; this will also affect future rates and negotiations.
  3. The higher the monthly amount of card transactions to balance the risk, the more favourable your application would be.

Payment gateways for forex

Forex trading and brokering are used by a large number of ecommerce stores, with regular trade totaling trillions of dollars. Here are some things to consider when looking for the best payment gateway to help Forex payment processing.

Safety is paramount

Payment gateway providers function as a safety net, securing the customers' credit card information and ensuring that transactions are not intercepted.

Anti-fraud measures

Fraud is all too popular in high-risk industries. Working with the right payment gateway company will help you keep the possibility of fraud to a minimum.

Production of international payments

It should go without saying, but you'll need a payment gateway that can accept payments in multiple currencies.

Payments made quickly

Finding a payment solution for payment gateway that can keep up with your fast-paced market! You don't want to be down at the most crucial and lucrative times.

Our experts will assist you in determining a more appropriate payment processing solution. Merchant account providers are constantly balancing their risk, because if they have too many of a certain sort or risk bracket, they can pull away from that industry.

The PayCly consults with industry experts on all aspects of foreign exchange payment processing.

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