As the trading industry has shifted from offline to online, affiliates have become a major factor in the broker world.  A lot of good business leads can come from affiliates and they are good for networking so they are definitely a valued resource.  However, affiliate fraud (any illegitimate activity, automatic or manual, by an affiliate or mock-affiliate) has brokers drowning in chargebacks and paying commission to people who have not only not brought him leads but also imposed fines and time consuming bureaucratic hardships upon his business.  As some affiliates are concerned only with their commissions, they often don’t care to differentiate between fraud and solid sales.  Also, fraudsters can register as affiliates and send 100% fraud to merchants and since affiliates can design their own nicknames, fraudsters can come back again and again with different names.   

It can be difficult to distinguish the affiliates that bring quality leads from the affiliates that bring only fraud, so any broker that works with a payment processor should have at his disposal an affiliate program that can allow a more thorough analysis of fraud patterns.  Such a program can give brokers insight into which affiliates aid in their profits by targeting where affiliate problems arise and how to eliminate them.  Brokers should also be able to receive a detailed, customized analysis of their affiliates and their traffic, categorizing and rating them from most profitable to least.  That way, brokers will be able to knowingly determine who can continue to be an affiliate and who can not.

If you’re a Forex broker, then you have to deal with chargebacks every day.  No matter whether your traders use wire transfers or credit cards, a chargeback is always something that you need to think about and be prepared for. 

As a wire transfer can never be used as proof of a withdrawal, it is recommended never to make a wire or credit back onto a credit card for the entire withdrawal.  First, you should refund the original deposit – as many as there are – and only after that, credit the balance difference. 

*This piece of advice is relevant only for those brokers whose traders make their original deposits on a credit card.

Who?

Any broker who wants to store trader’s credit card information or legally build a credit card database

What?

Aside from being a set of requirements assembled to ensure payment data security, it is also a way for brokers to guarantee that their trader’s credit card information is stored and transferred in a secure and protected way.

When?

The minute a broker decides he/she wants to build and maintain a secure network and protect cardholder data.

Where?

This initiative is on a global scale, affecting credit card companies and payment professionals all over the world. For a list of PCI DSS certified businesses, see here: https://www.pcisecuritystandards.org/participation/member_list.html

Why?

To increase trader loyalty by showing commitment to keeping their information secure
To protect a business from potential fines
To enhance a broker’s reputation
To maintain current and future bank relationships

Make sure your online payment solution doesn’t do this to you.

The online market is universal, yet just as you feel most comfortable with what is closest to home, so do traders.  As not all traders want to use their credit cards, brokers need to be able to provide alternative payment methods for fund deposits.  What to do? 

APMs (Alternative Payment Methods) such as online and offline bank transfers are the answer.  Each country has different APMs so it is important to be connected with as many as possible.  Localization is the key to a successful business, and providing traders with multiple ways to deposit their funds will only create growth and maximized profits.

Brokers should be able to provide their traders with the ability to deposit and withdraw in their local currencies, fees in without losing out on exchange the settlements.  This is where pairing with a PSP that works with acquiring banks worldwide comes in handy, as traders can profit from a multi-currency with identical settlement benefit.