Choosing the right binary options platform is a multiple stage decision. Making the wrong choice can be a costly mistake that will not only deprive you of important and much-needed resources for developing your binary business, but may affect your reputation as a brand. To start off, ask yourself the following questions and make a checklist:
1. What Business Model Fits ME?
Currently on the binary option platform market there exists rather diverse business models with their advantages and disadvantages.
a. The volume based or revenue sharing model. This model relies on the growth of your business and scales accordingly.
Advantages: the set-up and initial costs are minimal in most cases.
Disadvantages: you may be putting your client data at risk and the fees will become a burden as your business grows, using up resources you’d rather use for other expenses related to your business. While revenue is shared, your other expenses are not.
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b. The license fee and a fixed monthly technical support cost. This model is my personal preference and it is one that is familiar to most Forex brokers.
Advantages: you are able to project your platform expenses with pinpoint accuracy each month and (depending on the solution) your client data will be your responsibility.
Disadvantages: the initial costs might be more expensive. This model requires a higher initial investment and a very carefully planned long-term business plan since you control the risk.
My answer to this question: I would choose the second model if I am starting a binary brokerage or launching an additional product to my Forex brokerage as it is a long-term investment that does not become a burden on my balance sheet the more my binary business grows. The first model is an adequate choice if your operation is limited and you would prefer to work on white label terms, thus not being responsible for risk management.
2. Where Will The Platform And My Databases Be Hosted?
In most cases, the platform and your databases are hosted or are linked to the binary option software provider. This is true of any revenue sharing or volume based business models, since they have to calculate their invoices to you, thus they need access to your client data.
My answer to this question: For me it is extremely important that my client data is secure on servers of my own choosing and that I have full control over my product. I worked hard and invested a lot of time and resources into acquiring those clients, it is not in my interest to expose that data and I prefer to hold full responsibility over it in especially in this day and age of malicious cyber criminals. I see very little upside to hosting on the provider’s side aside from a relatively small sum saved on servers.