Establishing a Brokerage Firm — Integrations, Liquidity Providers and Costs

A brokerage firm
Photo by Shutterstock
  • Support services — A large number of payment rejections can cause profit loss. You must pay an additional 3–4.5% of direct debit payments for collections and warnings. Most PSPs provide risk protection services to confront this.
  • Gather information about the PSP’s reputation: Focus on the level of support, quality, and longevity.
  • The PSP must comply with global security standards, like Payment Card Industry Data Security Standard (PCI DSS).
  • Take a close look at the package deal the PSP offers you. I recommend choosing a service package that includes international coverage and multiple payment methods.
  • It’s preferred that you’ll pick a PSP that has API & iFrame connections.
  • Check whether the account opening process is straightforward and efficient or not.
  • Usually, PSPs require a one-time setup fee and a fixed monthly charge starting at 475 Euros.
Credit card payment
Photo by Shutterstock
  • The overall package should provide multi-asset liquidity, access to the FIX protocol and historical data, and nominated accounts in different currencies.
  • Market depth: A high number of buy and sell at each price suggests a higher market depth, indicating market liquidity.
  • Fast execution — with slippage or re-quotes.
  • Low commissions and competitive spreads.
  • Data feeds should be stable and reliable, with feeds reflecting real-time prices from different exchanges.
  • The liquidity provider should comply with regulations the same way a broker does.
  • Automated and compliant reporting system: Trades, FIX bridge, swaps & rollovers, order book access.
  • Software: FIX protocol and other APIs, MT5 bridge connections, FIX bridges.
An entrepreneur
Photo by Shutterstock

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store