What do you mean by forex?
Forex is nothing but the short form of Foreign Exchange. With the help of forex, foreign currencies can be bought, sold and traded on a global level, in other words forex is the global market for such currency operations. With over $5 trillion in transactions per day forex has become the biggest and maximum liquid trading market globally.
What is forex merchant account?
The merchant account used by forex companies globally for processing and transaction of online payments for their business is the forex merchant account. Forex traders use this account to accept payments through credit/debit cards, as most of the traders provide online trading and these traders find it easy to transact using this account. Also, the license of the forex traders and the company is very much important in approval of your Forex Merchant Account and how the account is affected as there are chances of a few transactions not being permitted.
All in all, main aim of the forex merchant account is that the forex traders should be able to process online card transactions safely and effectively.
The forex merchant account is classified as High Risk Merchant Account, which makes it challenging but not impossible to get approval of such account.
Why is forex merchant account classified as High Risk?
As known to all of us, Forex is a global trading platform hence, Forex involves currencies of various country and no country has any type of jurisdiction of any other countries currency. Some trading platforms are licensed while some are not. Forex Merchant account involves international card transactions. There may be a lot of unhappy investors so there is high probability of chargebacks and the risk for fraud also increases.
Lot of these concerns can be avoided at the time of underwriting of the forex merchant account.
At last the best way of avoiding this problem is to have proper license of forex trading at the time of approval of forex merchant account.