Forex or Foreign Exchange is a growing trading market and industry, and more and more individuals are entering the game. The reason it’s growing is simple and two-fold.
With the advance of numerous Forex trading platforms, it’s becoming more accessible and lucrative for individuals to participate. And, more money is constantly added to the world supply. Currency is money, and as the amount of money grows, there’s more to trade with. And to make trading easier, you need a forex merchant account.
Why Banks Won’t Open Forex Merchant Accounts?The problem is that your regular bank won’t be of much help when you try to open a Forex merchant account with them. Forex trading is considered a high-risk industry, which means that banks typically won’t let individuals and small businesses get an account for it.
Forex exists on two levels. The first and original level is the interbank level, where large financial institutions trade their currency reserves in enormous transactions. They make up the vast majority of the $5 trillion daily trading volume that Forex is often said to have (for comparison, Nasdaq, one of the biggest central stock exchanges in the world sees $180-250 billion in daily trading volume).
The second level is the over-the-counter trading between individuals and smaller businesses (smaller than the big banks, that is). This is where everybody else trades. The issue is that it’s decentralized, barely regulated, and volatile. While this makes it highly lucrative, it also makes trading very high risk because of the potentially high losses. And that means that banks consider it a high-risk industry and won’t open a Forex merchant account for you.
What Can You Do To Get Forex Merchant Account Instead?So now that you understand why your bank is unlikely to be of much use to you when looking for a Forex merchant account, let’s look at what else you could do. You could try your luck with an electronic wallet, or with using a whole range of them.
Unfortunately, though, they consider Forex high risk the same as the banks. Also, they often have caps on how much you can transfer back and forth which may be prohibitive when you try to do some serious Forex trading.
And some of them are notorious for not just shutting down accounts with no warning, but also freezing your money for unknown periods of time, until you manage to prove to them that the money is legally yours (i.e. it didn’t come from fraudulent activity).
Your best option? Go to High-risk payments gateway providers that offer high-risk merchant accounts. A high-risk merchant account is designed for high-risk industries like Forex. It doesn’t get shut down because the transactions are somehow out of the ordinary. With it, you can rest assured that you always have access to your funds and that the trades will keep flowing with no interruption.