Proprietary Trading Merchant Account Services
A proprietary trading merchant account is a specialized bank account designed to handle the payment processing needs of proprietary trading firms. These accounts handle various aspects of prop trading, including credit card processing, transfer of funds, and payouts to individual traders. The industry is highly regulated, and thus these accounts come with features like enhanced fraud detection, compliance support, and high transaction volume capabilities.
QuadraPay fully understands merchants’ unique challenges in the proprietary trading industry. We recognise that it can be cumbersome for merchants to find a proprietary trading merchant account processor independently. Here, we come into the picture because we have extensive connections with various payment processors globally and are comfortable supporting merchants from multiple industries.
Key Reasons that make Proprietary trading a high-risk business.
Proprietary trading is generally considered a high-risk industry by banks and acquiring institutions, primarily because of the speculative nature of trading and the potential for very high financial losses.
Another factor is regulatory compliances; in some countries, the compliances related to proprietary trading are extremely difficult and strict, and that is why banking partners generally refrain from working in this industry, as it may be a very time-consuming process to underwrite these merchants. Along with that, it can also bring regulatory and compliance-based challenges for the acquiring institution.
High-frequency trading is another factor that can attract chargebacks, which can translate into credit risk for financial institutions, and that is why banks are extra cautious in onboarding merchants from the industry, as it can bring in a significant loss of money for the acquirer.
Many banks and payment service providers are still exploring what proprietary trading is all about, and this is why they generally prefer not to work with merchants from an industry that is very new to them.
Proprietary trading companies may experience fluctuations in revenue and their profit margins. Traditional payment processors and banks are generally cautious about working with businesses that do not have a regular revenue stream; they refrain from working with industries that are heavily fluctuating in sales projections.
Another challenge payment processors experience is global transactions when underwriting merchants from proprietary trading companies. The global nature of transactions adds more complexity to the onboarding process.
With proprietary trading companies, transactions happen at high velocity, and these transactions and all activities depend on the sophisticated hardware and software infrastructure used. Not having proper technical infrastructure can significantly impact the profit and loss of the user, which is why it can attract heavy chargebacks.
Proprietary trading companies may be small or large. Larger companies may only face fewer problems because they already have a processing history to prove their experience. The major challenge is for startups or new companies. Banks or payment service providers prefer to work with proprietary trading companies that have already been processing for at least six months.
To navigate the challenges, your proprietary trading company can seek the assistance of QuadraPay. As an experienced merchant service reseller, we can connect you with payment processors that may be interested in onboarding you as a merchant.
QuadraPay’s Global Network of Payment Solution Providers to Assist Prop Trading Firms
QuadraPay offers merchant services to prop trading companies in association with well-known payment providers. Our partner acquiring companies provide credit card processing services to legitimate proprietary trading companies. Our partner providers are already working with many prop trading companies. Our team has done the hard work of finding payment processors that will say yes to your industry. Our Prop Trading payment service provider partners offer excellent service for accepting credit and debit cards.
We bring to you Low-cost proprietary trading merchant accounts
Proprietary trading companies work on a thin profit margin, making it crucial to offer competitive pricing to these prop merchants. However, another factor is that every prop trader has a different risk profile. Banking partners evaluate each merchant’s profile individually and present a competitive offer after assessment. This is why we do not disclose pricing here, as it varies on a case-by-case basis. Still, you can rest assured that our pricing for a proprietary trading merchant account is one of the most reasonable in the market. Contact us today, and one of our representatives will provide you with a free quote for a proprietary trading merchant account.
FAQ Prop Trading Credit Card Processing.
How do prop trading companies provide true value to traders?
A good proprietary trading company empowers its traders. The company ensures that the traders are provided with excellent training and regular support, which are much needed for better performance. If traders improve their skills, then the company as a whole makes more profits.
What challenges do proprietary trading companies face with low-risk processors?
There are many reasons why low-risk payment processors are not the best options for prop trading companies. Most of these low-risk providers have absolutely no idea about the prop trading business model because they may not have experience supporting businesses in this industry. Another challenge is the complex structure of prop trading companies. Prop trading companies are high capital-driven, and the capital may be sourced from various subsidiaries or UBOs that may be in different jurisdictions.
One UBO may be from Israel and another may be from the UK or any other European country. A complex organizational structure and hierarchy create additional load on the vetting team. Some of these low-risk processors may approve the account but may also suddenly stop processing or regularly keep asking for additional KYC on each order. Sometimes these low-risk processors also mark the merchant on a MATCH list after the account termination. Merchants should make sure that they work only with a high-risk processor that fully understands the prop trading industry.
QuadraPay, a long-term payment solution provider for Ace Prop Trading companies
For your proprietary trading company, your objective is not a short-term business. Our sincere advice to merchants is that QuadraPay connects them with payment service providers for Proprietary Trading Merchant Accounts. Ensure legal compliance, ethical practices, and effective risk management. Merchants are responsible for legal and compliance matters in prop trading. Conduct activities within legal and ethical boundaries. Familiarize yourself with jurisdiction regulations. We support your compliant and ethical trading journey. Contact us for assistance; we’re here to help responsibly.
You can contact us if you are new to the industry, and you can also contact us if you are paying heavy fees. We may be able to help you reduce your fees. Contact us today. We are excited to work with you.
