In an increasingly digital landscape, more people are spending money online than ever before. In the old day’s people used to be very wary about sending small amounts of cash online, today millions of dollars are transferred every second from almost anywhere in the world. It has become the new norm.
There are several PSP solutions for start-up brokers. Unfortunately, your brokerage can not do business without one. This article will explain what they do, why you need one and help you to choose a suitable provider.
What is a payment service provider?
In an increasingly digital landscape, more people are spending money online than ever before. In the old day’s people used to be very wary about sending small amounts of cash online, today millions of dollars are transferred every second from almost anywhere in the world. It has become the new norm. Your brokerage will need to collect deposits from clients on a daily basis and you will need to pay them also, but be careful. There are tricksters and fraudsters out there who are trying to steal from you. Your brokerage needs to afford your clients a safe, secure, and straightforward way to make payments online.
The nature of the forex industry means high transaction volumes and regulations. You will need a PSP that can serve your customers regardless of their location and payment method; otherwise, it will lead to issues and extremely dissatisfied clients. A brokerage needs to be trustworthy, and if a client cannot trust you to handle their money, then you will surely lose them to a competitor.
A PSP is a third-party technology that empowers your company to take payments online via your website, and your provider will need to handle larger than average transactions. Good PSP providers are invaluable to your business.
How to choose a competent PSP?
Of course, there are several considerations to make when choosing a PSP. Things like the provider’s risk profile, coverage, technical aptitude, type of currencies, number of payment channels, charges, holding time, and reliability. These factors can seem innocuous at first but they are important, for instance, a reliable PSP can lead to improved conversion rates, which can significantly improve your performance. A PSP can be a cherished partner or a thorn in your side.
Currently, there are a significant number of providers and new ones are launching all the time so you must be careful and select one that has a proven track record.
At the end of the day, just like choosing a liquidity provider, it can really pay dividends to do your due diligence. Your clients are trusting you to provide a decent transaction speed, ease of use and most importantly, a secure environment for their money and their data. Get it wrong, and it can cost everyone dearly.
Will it work with my trading platform?
If you have proprietary software, you will need to ensure your engineers integrate it with a PSP properly and this process can take many months and cost lots of money. However, if you opt to go with a white label service provider, they will have already vetted most PSP’s and will know perfectly which ones work with their platform. Of course, you can swap, but it is your responsibility to ensure they work bug-free. Always test the system thoroughly before going live.