Following in the footsteps of the tightly regulated USA retail FX market, which last year voted to disallow the use of credit card as a deposit method for FX accounts, Invast Australia let the trading world know today they will no longer accept the card method.
Could this be a foreshadowing of things to come? By aligning policy with the U.S. market, Invast could be testing operations to enter America, more so than many other brokers, Invast has capital and clout to pull off such a move…however, the immediate decision is due to a market re-positioning of the historic Japanese brokerage’s Australian entity.
Invast Australia is attempting to cater to a higher deposit amount client and the institutional market, as evidenced by the firm’s website makeover earlier this year. The news today comes following a recent company review, to confirm again…Invast Australia management has decided that the firm will no longer accept credit card deposits from existing and potential clients. “Credit cards are less important to our target market,” Invast Australia CEO Mr. Brendan Gunn stated.
After consulting ASIC guidelines and the risks associated with the use of credit cards as method of funding a derivative product the Invast Board decided to implement the change and pull the plug on credit card funding. There are risks (including financial risks) for both the consumer and the organisation when it comes to the use of credit cards.
“Funding trading accounts through credit cards may leave our clients with large debts while also being contrary to the firm’s efforts to provide an efficient and transparent payment method for our financial products.” Mr. Gunn said. The decision also addresses the possibility of credit card fraud, an ongoing concern for many consumers.
While the intent makes sense and can self-regulate certain troubled individuals from getting into financial trouble before they are ready to embark on a trading career, one has to remember there are certainly other line of credit methods beyond credit cards which can be used to finance a trading account, Moreover, this also keeps out current account or checking account cards which are cash based and accessed through VISA or MC.
In a related statement, Invast has given indications that it will shortly be launching a secure online payment option based on new technology, which will dovetail with client internet banking facilities. The company says it will be releasing further details shortly.
For more information on Invast’s deposit methods (currently now only bank wire or EFT), click here.