MasterCard & Visa To Ban Transactions From ‘High-Risk’ Industries

MasterCard has implemented its ban on transactions emitting from what it terms as ‘high risk‘ industries.

Some of the industries that fall under this category include forex, binary options and crypto trading. These industries came under this category because they were deemed so because they had little to no regulation governing them.

What this means is that anyone who wants to make a deal with a broker for forex, crypto and binary options will no longer be able to use MasterCard as a payment option. Visa is set to follow suit from December 2018.

Big Changes To The Industry

The world's biggest card issuers first indicated their hesitance in dealing with high-risk industries back in April. MasterCard formally announced that they classified the industries as high-risk and this meant that all chargebacks would be done 540 days after the transactions were completed – that is a very long time which poses a major challenge for MasterCard users.

MasterCard’s announcement was shortly followed by one Visa. The card issuer sent out a letter that warned payment processors that used their services that it would be reclassifying transactions to these industries as high-risk by December.

The main target of this move by credit companies is to lower the number of credit card transactions in these industries. The lack of regulation is making them nervous and the backlash is sure to be felt by these high risk industries. Their goal seems to be in sight as many brokers in these industries have already started warning customers that they will not be accepting credit card payments soon. Payment processors who work with forex brokers are already scrambling to find alternative payment solutions.

Forex And Binary Traders Must Find Alternate Solutions

Brokers who are based out of the European Union (EU) are facing a lot of problems. Most significantly is the fact that the regulatory framework that is forcing them to follow a set of rules that makes dealing with them a big problem. For those outside of the EU, the loss of Visa and MasterCard payments cuts out a large stream of revenue for them.

This will be especially difficult for forex and binary trading companies that operate in countries where there is little or no regulations. They can turn to bank transfers but that will impact that player base as not everyone will be willing to share bank information. These operators will have to think out of the box and find a new payment method or face losing a lot of business in 2019.

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