This article describes forex brokers who accept the use of mobile money for forex deposits and withdrawals. But what is mobile money all about?
Mobile money refers to money stored in an account that is operated by telecom companies, in which the user’s mobile phone and other telephony details such as the phone number are integral components of the transaction process. This is possible because phone numbers are unique in themselves, and every phone device comes with a unique International Mobile Equipment (IMEI) number. The unique nature of phone numbers can be enhanced by subjecting each user to biometric registration, in which physical traits that cannot be replicated in any other human being such as the fingerprint, are captured and assigned to the phone number. That way, a user can perform financial transactions over a mobile network using the phone number as a unique identification number, just the way every bank customer would have a unique bank account number, cheque books or savings passbooks of years gone by.
The mobile money payment channel is very common in Africa, where it is used as a tool for financial inclusion. Many African countries and indeed countries of the Middle East have large unbanked populations. Accessing services such as a forex trading account require financial inclusion, where a user of the financial system can be identified and the individual’s financial history can be profiled, in compliance with international laws against money laundering.
What Forex brokers accept Mobile Money
The number of forex brokers that accept mobile money for deposits and withdrawals is still relatively low. Despite this fact, there are already a couple of solid forex brokers who work with mobile money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
Between 74-89% of retail investor accounts lose money when trading CFDs.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
¹ Variable spreads vary according to the current market conditions, recorded for EUR/USD on 06.05.2020 at 10:42 GMT+1.
Forex Brokers and Mobile Money
With the passage of the European Securities and Markets Authority (ESMA) rules of 2018, it has become very expensive for traders to open and operate trading accounts with UK and EU forex brokers. This has led to a mass migration of traders to so-called offshore locations and loss of business for many of these EU brokers. The loss of business has hit many of them so badly, that their loud protests have caught the attention of the European Commission, which has instituted a process to review the MiFID II protocols that ESMA derives its regulatory powers from.
Some EU brokerages have been able to adapt to the situation by creating international divisions to handle clients from outside the EU. Africa represents a huge opportunity for forex brokers because the penetration of forex trading on the continent is relatively low. However, there is a large unbanked population in the African market. For the unbanked, mobile money represents one of the major means of transaction. This has led to a slight increase in the number of forex brokers that accept mobile money for transactions. Kenya and Ghana are two countries where the use of mobile money is very high.
Forex brokers that accept mobile money in Ghana have an advantage because even those who operate bank accounts also have access to mobile money. Mobile money usage in Ghana is driven by telecom companies such as Airtel/Tigo, MTN and Glo. In Kenya on the other hand, the most popular mobile money payment system is Vodafone’s M-Pesa.
Mobile Money As a Funding Method
To be able to get registered on a mobile money network, the user must have a phone number, with a registered SIM card matched to the user by means of biometrics. This provides an infallible means of identification, allowing the user to perform transactions on the mobile phone.
Forex brokers that accept mobile money in Ghana are then able to accept deposits in the local currency, the Ghana Cedis (GHS). Withdrawals are also conducted in the local currency. Users have the option of operating forex accounts in the local currency (if the broker allows it), or they can still maintain foreign currency accounts, in which case the appropriate conversion rates and charges are applied.
Since the mobile money registration process also incorporates biometric registration, all data can be harmonized and checked by the brokerage’s compliance department to ensure that appropriate Know-Your-Customer (KYC) protocols are followed.
Benefits of Using a Forex Broker That Accepts Mobile money
The benefits of using an FX broker that accepts mobile money are as follows:
- a) Very fast deposits and withdrawals: Transaction times are very fast, as transfers are processed in a matter of minutes.
- b) It is a cashless method which allows the user to transact without carrying money.
- c) The convenience of this transaction method is virtually unrivalled. A country like Ghana has mobile money outlets on virtually every street. You can simply walk into a vendor’s shop, deposit Ghana Cedis with the vendor, have your mobile money wallet funded and you proceed to fund your forex account.
- d) No need to fill any forms and there is no waiting time. You can do your forex account funding anytime, including weekends and holidays.
Drawbacks of Using a Forex Broker That Accepts Mobile Money
What are the drawbacks of using forex brokers that accept mobile money?
- a) Initial sign-up processes can be a hassle. There are instances of registration failure due to problems with the internet network.
- b) Forex brokers that accept mobile money are relatively few. This narrows the user’s choice of brokers.
Choosing a Forex Broker That Accepts Mobile money
Presently, the number of forex brokers accept mobile money in Ghana and around Africa are few. However, this could change quickly as more brokers are entering the African market. For a user, make sure to use online forums and other information sources to get a first-hand account on the experience others have had with the mobile money transaction process. You can also check the table above to see some of the most popular FX brokers that are accepting mobile money.