Visa has recently sent out documents to all those who handle cards with strict instructions on how to control binary options providers from expanding their business in North America.
Their main argument is that most binary options providers are regulated and licensed in countries like Cyprus and are prohibited from operating within the US and Canada, since their platforms do not adhere to the regulatory standards of these countries. Even though Americans and Canadians have access to these offshore platforms, in reality, they should not be able to trade with them.
Moreover, Visa claims that the number of binary options brokers targeting US and Canadian traders has grown and consequently, regulatory agencies such as SEC and the Canadian Securities Administrators are reporting higher incidences of complaints associated with them. Hence these entities have issued warnings to investors to exercise caution when trading with unregulated binary options providers.
Visa, has also gone a step further in the so-called war on binary options, by requesting that card issuers report any customer complaints related to scamming and unregistered binary options brokers. The multinational financial services corporation evidently views these operators as a threat to its own brand and is prepared to take drastic action to put a stop to them, even by punishing anyone who is seen as enabling them.
Additionally, Visa is also imposing that card acquirers must take responsibility to limit any international transactions with providers located outside their licensed jurisdiction; in this way only 2 firms are allowed to operate legally in the US, while there are practically none allowed in Canada.
Fibonatix CEO, Tal Miller, shared his views on the saga: “Visa’s decision to specifically point out Binary Options brokers targeting Canadian and American clients… follows a similar move made by MasterCard with regards to FX and Binary Options brokers targeting Japanese clients back in April this year.”
In the past year, national regulators have been pushing Visa and MasterCard to restrict business to unregulated providers, in addition to hunting them down themselves. This trend appears to be on the rise and we can expect more markets to be cut off in the coming months.