Payment Providers are probably one of the most popular industries in the world. But for some reason, many people don’t deem them as industries, they just see them as cards. But keep in mind that these cards are the creations of companies and those companies are starting to make a decision that could harm your trading from here on out.
MasterCard began to make changes to its terms and services back in April when it started to forbid their users from transferring funds to an unregulated brokerage firm. VISA was thought to join very soon and so they did. Last Friday VISA confirmed that it would take the same precautions as MasterCard and start limiting the transfers to unregulated brokers that they operate in.
The reason behind this was that the companies wanted to make a joint motion in the regulations of the Payments industry. they wanted to create as many problems for the unregulated brokers as they could. If you have a brokerage and don’t hold a license in pretty much the whole world, VISA and MasterCard will start deeming you as gambling providers and therefore will damage your customers’ credit history. Retail brokers are going to receive quite a big hit as the payment processors will find it very hard to provide their services to them, because of the new chargeback laws. Chargebacks are now available on payments from nearly 2 years ago.
Who will be affected the most?
According to VISA’s letter, every single Binary Options provider and similar industry will have to face the sanctions and comply with the new laws of money providers. Financial spread betting and pretty much anything involving “betting” will have to comply. What’s more important is that every broker or just a provider who has these features will have to be registered as a “high risk” to a customer’s bank account. This is clearly an old practice where banks lower a user’s credit score according to their dealings with gambling and casinos.
What’s scarier is that these are not small companies demanding these new reforms. These are the biggest Payment Providers in the world. Every single person on this planet who owns a card or has owned a credit card knows that it came from either VISA or MasterCard. They have the means to impact the industry on a scale that could potentially change it irreversibly, whether or not it will be a good change is still to be seen.