Establishing a Forex Business in Africa

Forex trading in Africa has seen explosive growth. Over the first five months of the pandemic, it grew almost fivefold. At the moment, Nigeria comes second in terms of daily volumes. The country has roughly 200,000 traders, and there are 1.3 million of them on the continent. Buying and selling currencies is not the only way to make a profit. You could establish your own brokerage and earn money from commissions or spreads.

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The easiest way to get started is by using ready-made software. Therefore, search for a reliable technology partner — a one-stop-shop brand. Make sure the company provides comprehensive support. It should help you handle all crucial aspects of launching and running a brokerage.

Such platforms are known as white label solutions because you can put your own brand on them. Consider all the costs for running the system, and create a solid business plan. Here are the key steps in the process.

Step 1. Registration

First, you will need to register your brand following the law. In Nigeria, the market is essentially unregulated. However, this does not mean you should operate without a licence. Traders do not trust brokers unless they are officially authorised by reputable organisations. You may choose between different jurisdictions — unregulated, regulated and semi-regulated.

In unregulated locations, there are no strict requirements for brokerage services. Famous examples are the Marshall Islands, Saint Vincent and the Grenadines. There, licencing is a piece of cake. This attracts many brokers from different parts of the world. Not only is registration simple — it is also the cheapest.

The only drawback is that you will not be able to run the services in the EU and other largest markets. If you intend to render services in Africa, this should not bother you. Companies that need access to the European market register in the United Kingdom or Cyprus, as both are member countries.

In such regulated jurisdictions, licencing is drawn out and expensive. On average, you would pay over $100,000 and achieve the result in six months. Not only will you gain entry into the largest trading regions. Smooth relations with banks are also guaranteed. Only the leading brands like Forextime can afford this.

Step 2. Choose a Platform

You may already be familiar with the most common Forex platforms like MetaTrader 4. A brokerage does not have to invest in software development. You could provide the most popular systems. At the moment, the range also includes MetaTrader 5, cTrader, xStation and Utip.

If the business is only taking off, there is no point in building powerful software. You may not have enough capital anyway. With a white-label system, you will offer brokerage for the most popular terminals under your unique name. Focus on building a significant educational base to help clients learn what is volatility, liquidity, and other crucial aspects of trading.

Consider MetaTrader 4, the all-time favourite. Your clients can integrate Expert Advisors for automated trades, use dozens of indicators and timeframes. This system is used all over the world, and it has maintained popularity for over a decade.

Choose a white-label platform with a fixed monthly fee. Some companies will charge you based on monthly turnover, which is less beneficial.  Remember about other expenditures as well. You will need to pay for maintenance and hosting, which may also be provided by the software developer.

Brokers need to minimise shutdowns and ensure monitoring around the clock. Traders will not stay with your company if they experience interruptions. Glitches are damaging to any company’s image. To conclude, your servers must always run perfectly well.

Step 3. Choose Payment Methods

All the more flexible your payment system — the more clients you can possibly attract. Ensure maximised convenience. The easiest way is to use a payment aggregator with multiple accepted methods (e.g., PRAXIS Cashier). This will allow clients to deposit and withdraw instantly. The next step is to integrate your client office or CRM with the aggregator.

Establishing a Brokerage Brand in Nigeria

Thanks to white label solutions, launching your own company is easier than you may think. If you register in an unregulated jurisdiction, you will obtain a licence quickly and affordably. Choose a popular trading platform and ensure uninterrupted operation. Once the system is up and running, use online marketing channels to attract a wide audience. Make sure your services are up to scratch, so leads turn into loyal customers.

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