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Forex Trading Merchant Account

How do Forex Trading Merchant Account Holders Use Customer Blacklisting to Prevent Fraud?

Forex is the most liquid market, which is why forex merchant accounts are always under the threat of financial fraud. The worldwide value of the forex market in 2022 is $2.409 quadrillion, which is approximately $6.6 trillion every day. You can only keep counting the zeros that are yet to add more in the coming years.

The high liquidity and hefty investment are the prime reasons to attract tricky minds to get undue benefit from the market. Hackers are desperate to exploit new ways to steal money.

Disguised as genuine customers, the fraudsters try to steal the money in varied ways. Forex trading merchant account holders have to spot suspicious trading players before they cause any considerable financial loss to the merchant. Along with the acquiring banks, the merchant account providers and the forex business owners use customer blacklisting as a potential tool to get rid of fraud customers.

What is customer blacklisting?

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Customer blacklisting is also known as payment blacklisting. It is a process to track forex traders’ customer accounts that have a suspicious tendency. The account details of such customers are recorded as well for future reference.

When any customer acts awkward, the data is matched to the recorded one. If it matches the data, the concerned investor account is blocked by the merchant and joins the list of suspicious forex accounts. This process takes place during the checkout process, which prevents the other genuine customers from any inconvenience. The list of blacklisted customers circulates between the forex payment gateway, merchant, and payment processor.

A forex customer’s data is checked on the following parameters –

  • IP address
  • Metadata
  • IP country
  • Language
  • User-agent
  • Card BIN
  • Card country
  • Email address
  • Language

The above parameters are generic for all forex high-risk merchant account providers. It is on an individual business entity whether it wants to set all the above factors to check the customer authenticity or only a few of them.


A global merchant’s blacklist community exists that creates and shares a master list of blacklisted customers. Thousands of merchants are members of this community.

Advantages of customer blacklisting

Payment or customer blacklisting is useful, which is why merchants all over the world use it. Let us learn about several benefits of customer blacklisting. The advantages are exploited by the merchants and the international payment gateway providers working for forex brokers.

  • Prevents financial loss for a forex merchant - Prevention of financial loss is among the prime reasons to use the technology as a tool. When a merchant can spot the fraudsters acting as genuine customers, he can take timely action and prevent his business from any possible loss.
  • Ensure safety for forex traders - Of course, no business can exist without its customers. Listing fraud customers not only secures the companies from any monetary loss but also the forex traders. It is easier for the merchants to filter and spot the fake forex players, due to which inconvenience does not happen to the honest users of a trading platform.
  • Automation simplifies tasks - Once the rules and parameters are set, the automatic system blacklists the suspicious customers, reducing the stress on the merchants. The good thing is that this technology works on the known variables, which is why usually nothing unpredictable happens to him.
  • Updated list ensures security in the future - The list of blacklisted customers keeps updating now and then, which makes the process even easier. The merchants need to update their data according to the latest update, and the system will start applying it through automation. The merchant has nothing to worry about.
  • Improved business credibility - Forex traders, always choose a safe platform for trading and research the safest brokers. If a broker displays that it blacklists the fraudsters or hackers right away, the authentic customers sigh in relief. Filtering fraud customers gives the feel of security to the investors and improves the trustworthiness of the trading platform. Every merchant today invests a lot in such safety measures for customer loyalty.

Limitations of payment/customer blacklisting

The fraud detection technology certainly has some enormous benefits for the merchants, but it also has some limitations. Like every technology and tool, payment blocklisting comes with drawbacks. You should know about them as well to get an all-inclusive insight into the significance of this fraud prevention tool. But one thing is sure, with time, these limitations can also be removed while creating a better atmosphere for the forex traders and merchants.

A risk to genuine legitimate orders - According to research, around 40% of denied transactions are legitimate and were rejected mistakenly. What is the reason behind it? The set factors to spot suspicious customers sometimes backfire, and the authentic players get trapped in it. The fake ones are detected through card numbers, email addresses, IP addresses, etc., but the automatic system sometimes stops a payment done by a genuine customer. In simple words, technology is not perfect.

Safety can be broken if the blocklist is not updated - Now and then, the whole payment system has to update the data of blocked customers. Sometimes the payment gateway for forex brokers circulates the list to the merchants and acquirers, or sometimes the merchant does it. In simple words, the data travels across the network, but if the list is not updated, the system cannot track the new fraud transactions.

Fraudsters can fool the system - The hackers are also intelligent and invent new ways to break a safety measure. They may regularly change the details like card number, address, etc., and the system will not be able to detect fake information. With the progress in safety tools, hackers are also updating their ways to break security arrangements. However, today, merchants and customers interact in a transparent atmosphere, and there are fewer reasons to worry. Just like the payment solution industry uses artificial intelligence for good reasons, unethical hackers use the same invention for ill purposes.


Now you can understand how powerful the payment blocklist technology is. Yes, there are some weaknesses, but you really cannot right away reject the idea of implementing customer block listing. For fraud prevention, merchants use many tools such as 3D secure technology, PCI compliance rules, etc. Listing fake customers is also essential to reduce the risk of financial loss to forex merchants. If you are also looking forward to applying the technology, visit paycly.com for the best payment solution and suggestions on the latest safety technology.