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eCheck for Forex Brokerages

It’s no secret the eChecks are a popular choice for payment across the globe. Consumers use eChecks for a variety of things, including Forex trading. Why is this a phenomenon?

eChecks are a simple, reliable way to send funds to your Forex broker, regardless of where they are in the world. Although different countries have varying degrees of regulation, the use of eChecks remains a convenient and efficient way to transfer funds.

Keep reading to have a deeper understanding of how eChecks became a popular way to fund your FOREX account.

Restrictions on Forex in the United States

Regulations in the United States made a massive shift in 2010, which resulted in a rise in the use of eChecks. Here’s what happened:

Prior to 2010, regulations were broad and overarching for consumers to fund their forex accounts. As a result, many consumers used credit cards to fund their accounts because of the ease of access to them. If poor trading choices were made, consumers often lost the money in their forex accounts. This money was obviously borrowed from a bank, with hefty interest rates attached to it.

The United States took precautions to protect consumers from making these mistakes again. In 2010, legislation was passed that banned the use of credit cards for the purpose of funding forex accounts. The idea was to protect banks from the risk of losing money on massive credit card debts and protect consumers from personal financial ruin.

After the legislation passed, consumers who wished to fund their forex accounts had to use cash. They could do so using debit cards, wire transfers, or ACH payments. This is where the eChecks come into play.

eChecks for Forex Funding

In the absence of credit cards, consumers were forced to use other means of funding their forex accounts if they wished to continue trading. Using actual cash made the market less accessible for many, but also protected people from themselves, as noted above. Since eChecks draw cash directly from the trader’s bank account, there is less risk involved for banks and financial institutions. The consumer may still lose money in the market, but at least they won’t have a credit card statement with high interest rates to remind them of the loss every month!

How do eChecks Work?

eChecks are processed through the ACH network. ACH stands for Automated Clearing House, which is a nationwide network of financial institutions. The ACH connects institutions for the purpose of sending money between accounts at different banks. This is how your employer deposits your earnings directly into your bank account.

When an eCheck is submitted for payment or funding of an account, the originating bank (ODFI) creates ACH files that are sent to the payment processor, and ultimately to the bank that will receive the funds (RDFI). The receiving bank will confirm the payment details and post the money into the forex account. At this time, the money will be debited from the trader’s bank account and deposited into their trading account.

Example of eCheck Processing for Forex

To simplify the paragraph above, let’s think of it this way:

Let’s assume you’re a forex trader. You have a checking account at Bank A. Your forex brokerage uses Bank B. You open an account with your brokerage at Bank B. To fund that account, you need to transfer money from your checking account to your forex account.

This process is as simple as writing a check. You can get online with your forex brokerage and process an eCheck payment. This payment will electronically move the money from your checking account at Bank A to your forex account at Bank B.

Alternative Funding Solutions for Forex

Aside from debit cards and eChecks, there is another creative way to fund your forex account. Cryptocurrency is an acceptable and efficient way to fund your account if you prefer not to use the cash in your checking account. However, if you choose to use crypto to fund your account, you need to choose a broker that accepts it as a payment type.

Finding a broker that allows crypto for funding is not as difficult as it may sound. A simple Google search can help you locate brokerage firms that accept crypto. From there, you should do your research on each one to find the best fit for you. A good fit will include things like an acceptable fee structure and the types of trading the brokerage participates in.

Difficulties With Forex for US Clients

We would be remiss if we didn’t mention the common issues surrounding US clients and forex trading. Many foreign brokerages refuse to take US clients for a variety of reasons. Overall, the prospect of accepting US clients can be extremely expensive and not very lucrative.

In the European Union, there are a few licenses that forex brokerages must secure to do business. For example, a brokerage in the UK needs to obtain a license from the Financial Conduct Authority (FCA) to do business with clients located in the other countries in the EU. This license is simple to secure and has minimum deposit requirements.

On the contrary, if a brokerage in the UK wants to accept US clients, they must obtain a license from the National Futures Association (NFA). This license requires every broker to have at least $20 million in operating cash. It also has requirements for legal and executive level staff to be on payroll in the brokerage.

The NFA also operates under regulations that are much stricter than those of the FCA. For example, hedging (a type of investing) is not allowed in the US but is legal in the EU. This can cause a hardship for foreign brokerage firms because their teams are trained to follow certain protocols that are legal in their countries. If they practice some of those protocols on their American clients, they could be fined heavily by the NFA.

As a result of these strict regulations, many foreign brokers opt not to accept US clients. In many cases, the expenditure of additional payroll, risk of heavy fines, and requirement for operating capital does not justify the potential profits.


Many forex brokers accept eChecks and American clients. Your job as a consumer is to find the one that fits your needs the best! Start with our list above and interview each broker to find the right one for you.