Finance Magnates has revealed that SpotOption, the leading binary options technology provider is branching out to the online payments business with an innovative operation called Spot Paymentech. The new venture will focus on the binary options market to get established, but it won’t be limited to it as it will targets other verticals such as: e-commerce, gaming and travel as well.
Spot Paymentech will act as a Master Payment Service Provider by means of providing a single acquiring point for brokers wishing to process transactions globally and connect with multiple payment providers, acquiring banks and alternative payment schemes. Spot Paymentech platform will support a wide range of payment methods such as, major credit and debit cards, online banking and alternative e-payment solutions.
With regards to binary options, Spot Paymentech will engage brokers from the regulated market only, which may limit its growth potential within the industry but will allow it to keep a good reputation with banks, financial authorities and even institutional investors. A number of SpotOption’s regulated brands are already lining up to test the new service as the firm wishes to establish its credibility before the official launch during Q2 2016.
Spot Paymentech’s main selling point is the optimization of broker payments performance by improving the overall acceptance rate. In order to achieve this, the company will use its proprietary smart dynamic routing technology, to build a payment method matrix. This will find a match for each broker through active tracking of where the majority of a brand’s clients are from, and then route the transaction to the best performing payment service provider for that region based on its scoring and past performance. Considering SpotOption’s size and scope in the binary options industry, the firm has performance data access and knows exactly which payment providers and acquiring banks are most fitted to the binary options marketplace in every region of the world. Spot Paymentech will setup relationships with major banks in key areas, especially targeting the largest credit card issuers in each area, another step to ensuring maximum approval rates.
Meet BeSquare: the new tech training program for Malaysian graduatesGo to article >>
For completely new startup brokerages, there will also be an additional strong selling point – no need to create a relationship with another provider. Until now when a new brand was launched with SpotOption, they received an almost turnkey solution technology-wise but had to choose a third party to supply payments services. This often caused a slight delay until it accepted their business in order to accept deposits. Once Spot Paymentech will launch, a new brand will simply have an option (presumably the default option) to get a service provider immediately out of the box, assuming they got regulated as well.
It’s still too early to judge how such a move can affect the binary options industry, but there are obvious possibilities. One is that the other binary options technology providers will also launch their own payments services or try to cement a relationship with a payments provider in order to make sure they can offer the same full service package as SpotOption.
Another is that this can lead to increased competition for the brands’ businesses, which will include the parameter of promising the lowest rate of credit card refusals and maximized profitability. This will increase satisfaction level of clients, as being turned down and sent looking for workarounds can kill one’s mood especially in such an immediate instrument as binary options.
Looking at the bigger picture, Spot Paymentech shows that SpotOption is actively thinking how it can be as innovative as possible to close all the loops in the binary options business, gradually expanding to cover every possible need a broker might have.