Just a few days after Finance Magnates’ article on the PSPs Transfers Freeze, the forex industry is rumbling. The overwhelming mood around the industry continues to be one of panic, as the landscape has changed far too quickly for many venues to adapt properly.
The setback could not have come at a worse time for brokers who are already trying to chart a course forward in what has been a much maligned and constrained industry. Brokers already claiming losses in the millions due to the freezing of transfers.
According to an industry official, “You are stuck whether you’re unregulated or regulated, or whether you have a good or a bad platform. You quite simply don’t have the means to receive money.”
Indeed, issues are now arising from clients’ banks, their credit card company, or other laws a given country of residence. These layers of logistical difficulties are putting the squeeze on brokerages and by extension their client bases. “PSPs are holding hostage our client’s funds. This is an impossible situation,” noted another industry source.
The ramifications of these delays are manifold, as indicated by the dire tone struck by many sources around the industry. Brokers recognize this risk, as “Any delay in transfers or freezing of funds can have disastrous consequences,” per one industry spokesperson.
Many brokers have also expressed strong displeasure and opposition to the harsh treatment levied by PSPs, as well as Visa and Mastercard. Now labeled as ‘high-risk’ operations, FX and retail services are increasingly unable to properly transfer or provide funds to clients.
Unfortunately for many brokers, the situation is only growing worse. Such steps have proven to be highly detrimental towards retail operations, leading to the outright freezing of transfers or funds.
Ultimately, “ESMA did not catch anyone by surprise, however the payments landscape did change way too quickly for many brokers to adapt. PSPs have been totally unwilling to work with brokers, and it is just too taxing to onboard alternative PSPs in such a short amount of time”
The industry is abuzz with opposition to PSPs’ heavy-handed approach. More so now than ever, retail operations will need to adapt or die, leading to a period of great uncertainty that shows no sign of stopping anytime soon.
Disclaimer: The content of this article is sponsored and does not represent the opinions of Finance Magnates.