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Forex Bonus Management – Everything you Need to Know

Offering a forex bonus was always one of the most popular methods to attract new clients and retain existing ones. At one point, most brokers were offering forex bonus schemes.

Changes to the ESMA regulations in 2016 limited the practice for forex brokers with a European license. For brokers operating in other jurisdictions, though, trading bonuses are still a big part of their marketing.

Forex bonuses come in various shapes and sizes, so managing your promos can get complicated without the proper systems.

We’ll go over the various types of promotions you could offer as a broker and then look at what we think is the best forex bonus management solution.

forex bonus management

The most common types of bonus offer brokers tend to run are the following:

  • Welcome Bonus
  • Deposit Bonus
  • Rebate Bonus

Welcome Forex Bonus

A Welcome Bonus is probably the most widely used type of forex promotion. Welcome bonus offers are a very effective tool for attracting new clients. This type of offer is relatively simple to run. Any client action can be the trigger, for example, First Time Deposits (FTD) on client sign-up.

Most brokers offer new clients the chance to open and trade a demo account. These practice accounts usually have a thirty-day validity, after which they expire. During those thirty days, welcome bonus offers are an effective way to convert demo clients to live trading accounts.

In addition, this up-sell from demo to live can link to clients’ results in their demo accounts. If, for example, a demo client is getting good results trading the forex major currency pairs, then a welcome bonus to trade these instruments could translate into higher conversion rates.

With the increase in client acquisition costs, maximizing deposits is key to a successful brokerage. Structuring welcome bonus offers in tiers according to the size of the FTD is a proven method to increase deposits. For example, a first-time deposit of $500 would get a fifteen percent bonus, whereas a $1,000 first-time deposit would get a thirty percent bonus.

One highly effective strategy is to replace the percentage with dollar figures. For example offer a $1,000 bonus amount for a $1,000 deposit. Using numbers has a psychological effect, making the offer easier to visualize than a percentage amount. It pays to test both types side-by-side to reach your conclusions, though.

Welcome bonus offers also lend themselves to time-based promotions, such as holidays or client birthdays. Many brokers run these time-based promotions with bonuses around Christmas, for example. Similarly, bonus promotions targeting a client’s birthday are also highly effective.

Welcome forex bonus offers are one of the things your target clients will be actively seeking. Most brokers will have some kind of welcome promotion, so it pays to run these promotions for your brokerage.

It’s essential to keep in mind here that a welcome forex bonus is something your affiliates will expect to see. If you don’t offer these, it might be tricky to attract high-performing affiliates. It pays to add these types of welcome offers to your product.

Deposit Forex Bonus

Another widely used type of forex bonus is a Deposit Bonus promotion. These aim to maximize levels for single deposits and are usually tools for retention teams. However, broker benefits tend to be higher with deposit promotions than welcome bonus offers.

This is because deposit promotions are generally outside of any affiliate compensation unless, of course, for affiliate compensation programs based on revenue share.

A deposit forex bonus promotion will usually be on a multi-tier model. Under this multi-tier scheme, brokers offer varying bonuses depending on the side of the deposit. These can vary between single-deposit and multiple-deposit.

Under a single-deposit promotion, the bonus is effective as soon as clients make a qualifying deposit of, say, $1,000, for example. Clients can split that $1,000 qualifying deposit into several smaller transactions in a multiple-deposit promotion.

These deposit promotions also link to the client’s account type. All brokers have account tiers with varying features and benefits. A deposit bonus campaign is an excellent tool to move clients to higher account levels.

However, the bonus only applies once the total reaches the qualifying amount. For example, ten deposits of $100 to get to the qualifying $1,000 amount.

The leverage levels you can offer your clients will vary depending on your operation’s jurisdiction. For some jurisdictions, most notably for European Union countries operating under ESMA, the maximum allowable leverage for forex trading is 1:30.

These leverage limits severely restrict trading opportunities for lower account levels. Offering tradable deposit bonuses is one way to raise overall deposits and client trading volume on your trading platforms.

That leads to higher trading commissions, translating into higher revenue for your brokerage. At the same time, your clients have the chance to make more significant trades for more profit potential. Win-win for both!

Rebate Forex Bonus

Also known as a Cashback bonus, rebate bonuses link directly to client trading volume. Therefore, the higher the trading volume, the higher the rebate bonus amounts.

Brokers typically assign a multiplier to their trading platform’s various instruments., with the multiplier applied to the number of round-trip lots a client has traded to calculate the final rebate amount. For example, a broker can assign a $2 multiplier to the EURUSD and a $3 multiplier to the EURJPY. A client trades ten round-trip lots of EURUSD and twenty of EURJPY. Based on that volume, the final rebate bonus for this client will be $80.

Rebate bonuses are based on traded volume, giving brokers a virtually unlimited choice of promotions. A promotion can target total volume, regardless of the instruments. Promotions can be event-based and even time-based.

Some highly successful bonus campaigns include rebate promotions for economic calendar events such as the NFP (Non-Farm Payroll) report and time-based between opening and closing hours. The possibilities are only limited by your imagination!

Bonus Management

While most of your clients will abide by the rules of your promotions, like everything else in life, we must take the rotten apples into account.

Some of your clients will try to abuse your bonus offers for unfair monetary gain. Unfortunately, that could leave you open to substantial losses and damages, so a reliable bonus management system is essential.

This management system has to be powerful enough to handle your various promotions’ intricacies. For example, we’ve already seen the different types of bonus offers you could have running at the same time for thousands of your clients. Your bonus management systems must handle all these and spot any instances of bonus abuse and fraud attempts.

That calls for robust systems with intelligent automation that can learn and evolve from the progress of your promotions.

Our Bonus Management Module powers over one hundred of the leading brokers in the world, running thousands of promotions every day.

Fully compatible with MT4 and MT5, the PLUGIT bonus management module is flexible and highly customizable. Our bonus management module is built on Microsoft Azure for security and stability, with built-in fall-back and redundancy, able to handle all types of bonus offers with ease.

Contact us for a no-obligation demo. We’d love to show you what we can do for your business!

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PLUGIT uses your information to contact you about our products and services. For more details, please check our Privacy Policy.