After the NFA finalized its ruling that it was banning the use of credit cards for funding forex accounts earlier this year, it added an additional barrier of friction to the already diminished US online forex trading industry. At the time though, at Forex Magnates we theorized that although credit cards were being removed we expected alternative payment methods to come to light. Specifically, ACH-based bank to bank transfers appeared to make the most sense for the industry and singled out both Knox Payment and Dwolla as two low cost alternatives.
Following on those thoughts, Knox Payments announced that it has been tapped by GAIN Capital to provide ACH payment services for its FOREX.com customers. Integrated with major banks and supporting the majority of US banking customers, using Knox Payments, FOREX.com customers will be able to initiate instant ACH-based bank to bank transfers for funding their accounts.
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Speaking with members of Knox Payments in June, they noted that among different industries, financial firms including forex firms have become interested in their payment offering. As such, following the initial integration with FOREX.com, we expect to see further brokers adapting Knox or a similar type of solution to provide an instant and low friction solution alternative to credit cards.