Different Commissions Basis for Forex Affiliates | Apexum

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Different Commissions Basis for Forex Affiliates

June 20, 2019

The currency market is a place where daily trading volume exceeds five trillion dollars. In some days, even more.

Forex as we know it today or foreign exchange began in the early 1970s when the United States scraped everything left from the Bretton Woods agreement. Currencies began to free-float against each other, and Forex trading became available to the retail trader once the Internet and online trading became a reality.

Together with technological improvements, many brokerage houses appeared. As such, stiff competition leads to aggressive ways to promote the business, with almost all brokers running some affiliate program.

Affiliates make a living acting as an introducing broker on behalf of the brokerage house. A good affiliate runs an online business that constantly drives leads and traffic to the Forex broker’s website, and an outstanding affiliate runs multiple websites, email marketing campaigns, develops landing pages to build hot leads, and is involved in multiple commissions schemes with more than one brokerage house.

Out of the different partnership types possible, a few ones stand out of the crowd, such as the CPA, revenue sharing and/or a mix between the two.

A Forex affiliate commission program based on CPA (Cost Per Acquisition) is the most popular way of partnering with a Forex broker. And, truth be said, most fair.

In the end, if the affiliate can run traffic and generate leads that convert into trading accounts opening and funding, the job the brokerage house entrusted it to do is completed. The CPA agreement turns into a commission only when and if the trader opens a live trading account.

Hungry Forex brokers (brokers that are new on the market and have a budget to attract as many customers as possible) usually run aggressive affiliate programs. The idea is to partner with individuals or companies that run a big affiliate business and attract them via large commissions.

A commission for a trader that opens and funds a trading account starts at about $250 but can go much higher. Forex fairs and expos are organized with this purpose: the bring affiliate and brokers together, to negotiate deals and sign affiliate contracts.

The broker is interested in what are the affiliate marketing and affiliate promotion strategies used on the Forex affiliate program, while the affiliate is interested in getting the highest commission possible for the introduced traders.

Revenue sharing goes a bit further. While the affiliate is compensated (not mandatory though) for bringing in new clients that open a live account, the bulk of the commissions come from the profit the trader generates for the broker.

Brokers may offer to share part of their spreads (which is the vehicle that makes most of the revenue for a brokerage house) or any other volume-based-scheme that depends on the trader’s activity.

A hybrid solution is any mix between the two, and a brokerage house is free to run as many “nuances” of its affiliate program with different affiliates. Depending on the size of the potential business, huge discounts are possible.

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