Forex trading tools for beginners

When you first start trading forex there’s a lot to learn. You need good tools and you also need to ensure that you thoroughly understand them all. That takes time, at the same time as you’re trying to get to grips with trading itself. The best approach in these initial stages is to keep things simple and give yourself time to find your feet.

New forex traders shouldn’t be chasing big money – almost everyone who does so gets burned. instead, your focus should be on conserving your money while you learn what you’re doing and explore your options. This means that you don’t need the fastest, fanciest tools on the market. You can get a lot of tools that will serve you well at this stage without spending anything at all.

Setting up your trading station

One thing you will need to spend money on is your work station. A fast computer and reliable, fast internet are essential. It’s also worth investing in a second monitor as you will have a lot of data to keep track of. Most traders use one for reference materials and one for making trades. Make sure that you have a comfortable seat because you may be at your station for long periods of time and you also don’t want any distractions when working.

Choosing the right software

The most important thing you will need when trading is a chart to keep you up to date with the movements of currency pairs. You can get free forex charts from forextraders.com, and because they don’t have all the extra bells and whistles that many commercial ones do, they’re actually much easier to use. At this stage in your forex trading career you can easily have too much information. Keeping things simple makes it easier to focus on the details that matter. Trend lines, and support and resistance lines, are the most important things to follow. Focus on how trends are developing and be wary of making predictions that appear to contradict them.

Because forex trading is, by its nature, international, you’ll need a tool for keeping track of different time zones. Some forex tools come with this built in and there are lots of other graphical time zone converters that you can keep on your screen for easy reference. If you’re engaging in forwards or futures trading, you’ll also need a calendar.

Before you can manage risk effectively, you’ll need to be able to calculate the risk associated with each trade. For this you will need a position size calculator. This makes it simple to undertake otherwise complex calculations involving your trading station’s base currency and each currency in the pair you’re considering trading on.

A pivot point calculator can help you keep track of how your trades are developing over the course of each day. This is particularly useful when you’re a beginner because it helps you get some distance and take stock of your situation rather than being distracted by the ups and downs of individual trades, which in turn helps to take emotional bias out of the equation.

Simulation software is a great investment for a beginner because it lets you explore possibilities without taking risks. It’s more than just a tool for learning the basics, however. It can be really useful for testing new strategies to see how they play out. Many seasoned traders hold onto it so that they can explore new ideas.

Can you trade from your mobile?

A common question asked by beginners is whether or not it’s possible to trade from your mobile. It’s true that there is software available for this but it’s not a good idea because it’s simply not possible to keep track of all the information you need on a small screen. Your mobile is, nevertheless, an invaluable tool. It can give you the flexibility you need to push a trade through if your computer or internet jams up. It also means you can communicate with fellow traders, including any you’re pooling funds with, at the same time as you trade – improving your situational awareness. Get a hands-free set or one with a good speaker and microphone so that you can easily use it when your hands are busy with the keyboard or mouse.

Having the right tools will put you in a much better position to make a success of forex trading. Take the time to work out the trading style that suits you best and bring in further tools as necessary to complement it. Trading is all about focus and streamlining what you do.

New Viderium Facility Launched in Latvia

Viderium has announced the launch of a new data facility to be launched by the company in Latvia in 2018, expanding business operations for the IT company. The new facility will expand on current operations in both Hampshire and Rotterdam, diversifying the Viderium offering and allowing the company to reduce outgoing costs even further.

Favourable Commercial Terms

The new Latvian operations will commence on what Viderium’s CEO Ross Archer has called “favourable commercial terms”, with some of the market’s most competitive pricing having been agreed. Latvia, stated Archer, feels like Viderium’s natural progression. As one of the most sustainable and cost-effective regions to do business in the energy-intensive high-performance computing market, operating out of Latvia will enhance Viderium’s bottom line. Viderium was expecting delivery of the first shipment of equipment to the new facility in Latvia by the 20th of July 2018.

The Baltic Highway

Latvia is one of the top ten global countries for average measured speed of internet connection. The Baltic Highway was launched in 2012 as a modern network for data transmission, increasing access speed for users to web-based content internationally and allowing new internet-based services to be developed and introduced in both East and West directions. The Baltic Highway provides a high-capacity infrastructure that facilitates national data-intensive companies providing exciting investment opportunities.

Viderium Services

Viderium specialises in operating and funding data centres to create high-performance computing solutions for business, along with a variety of other data solutions. The dynamic characteristics of data centres have driven the asset class to grow and attract recognition from investors. As a hybrid investment, data centres have dual attractions for investors as technical real estate. They combine prospects of rapid growth with the attractive characteristics of traditional property investment, including recurring revenues and long investment contracts.

Data Centres

Data centres typically house computer systems along with a variety of associated components, including telecommunications and storage systems. Other components may include environmental controls such as air conditioning and fire suppression, security devices, back-up supplies of power, and redundant communications connections for data.

Viderium Corporate Bonds

To facilitate growth, Viderium issued corporate bonds to investors in 2018. These bonds are insured and asset-backed, offering investors returns of 9.8% per annum paid quarterly, with capital repaid to the investor at the end of the investment period of three years. Viderium bond investment starts at £10,000.

5 Ways Marketing Automation Helps Startups Succeed

Running a start-up, and everything that comes with it, is a complicated affair. There are multiple complex elements that need attention at all times and this probably has to happen with quite a small number of staff and limited resources. Marketing, whilst vital to the success and survival of any new business, can be tough to master in the age of ever changing technology that has gained the moniker of ‘martech’. Marketing technology holds enormous potential for start-ups in the form of marketing automation. Adopting and implementing this technology successfully can give your businesses a competitive edge at a time when it’s most needed. It is important to remember that whilst automaton is there to make marketing processes easier to implement, it should not replace the personal element in your small business – rather lend a helping hand to make marketing more effective. Below are five ways that marketing automation can help your start up succeed.

Create a Valuable Database

Data is extremely valuable, particularly when it goes beyond contacts. The more data you are able to gather about your customers the more you can tailor your business offering to target them effectively. Knowing how to approach potential and existing customers will assist you in making better decisions with regards to growing your start up. Marketing automation can help to determine elements to target your customer base with, some of these are tone and style of language, best time to send out emails, product recommendations, and more. By segmenting your audience through the use of data your business will gain invaluable insights about customer journeys and optimisation.

Turn Leads Into Sales

Nurturing leads is essential for a new business, but it can get lost in the midst of all the other moving parts. Surprisingly, this crucial part of business development is sometimes not afforded enough attention; Harvard Business Review found that 23% of leads are never followed up and this translates to loss of revenue. To avoid your leads getting lost in the internet’s ether, marketing automation can help. By setting up a feedback trigger on first customer contact, your business can feel assured that no lead goes uncaptured whilst assisting with scheduling so that all information can be accessed easily when needed.

Save on Resources

Marketing automation does usually come with sizeable initial costs (good software is never cheap) but this is easy to justify long term. Just think of how much time your marketing staff can save if many of the more repetitive and previously manual tasks can be automated – that’s lead follow ups, emails, offers, etc. Sometimes this can be the difference between hiring a junior staff member to look after these processes or giving your core staff tools to effectively implement it themselves. Marketing automation software can also help with content suggestions whilst evaluating its potential effectiveness.

Make Data Comprehensible

We’ve touched on this in the first point, but it bares reiterating that data is extremely valuable to any start up. This is easy to implement if you have a dedicated marketer with data knowledge however, in reality, 47% of small business owners handle the entirety of the marketing duties by themselves. Besides taking a crash course in marketing and data, investing in the right type of marketing automation software will be much more effective and reliable long term. Companies like BlueVenn offer simple to use platforms that bring together swathes of data and customer profiles in accessible and simple ways. Unifying online and offline data, merging and auditing, even pulling reports, can all be done with ease and without extensive expertise needed. It’s a way of accessing and understanding your target market on a daily basis, saving you precious time and money.

Scalability

One of the many advantages of automation is its scalability. As your business grows, so can the uses and scope of the software, supporting you at all stages of the start up growth process. This is what makes automation software a great investment from the start, usually you only pay for the current number of contacts and can adjust accordingly as your business experiences growth.

Where is the Pound really heading to?

One of the biggest questions is everyone’s mind nowadays is where is the pound heading to. In this article I will express my opinion on what’s to happen in the near and far future, using layman’s terms. Do this mean things will definitely go down this route that I envision? Absolutely not. When it comes to economics, politics and foreign exchange rates (all closely tied)  no one really knows what’s coming. This is merely a speculation based on what I’ve been seeing so far. If you want to read more from me and my staff view our week-by-week currency predictions.

What will make or break the pound? The “leave” vote has been casted more than a year ago and there are no resolutions in sight. PM May has announced she is aiming for a “soft brexit”, if such thing exists at all, that will not alienate the UK from the single market. She did pass the Customs and Trade bills and came out victorious at the Parliament but she had to rely on the support of 4 Labour MPs, not exactly the most sustainable thing for her as things stand. After David Davies and Boris Johnson were sacked / resigned, the situation is chaotic and volatile and there is little confidence that PM May will be able to execute what she desires to.

The thing that will make the pound make, or break, is whether a Brexit agreement will be formed in the coming months, before the people, the EU, and the market will reach a definite conclusion that there is no agreement (i.e. a hard brexit). Will any agreement of an orderly brexit will bring back confidence to the pound? Probably not, but once any agreement has been reached, it is likely that the downslide of pound will stop (but not surely going to recover its rates).

What are the chances of an agreement taking place? In my opinion, the chances are slim. The EU’s stances on the brexit negotiation were very rigid right from the beginning, and it doesn’t seem, or at least not reflected back to the media, that that these stances have changed over the course of the year. The EU is well aware of the fact a hard brexit will be devastating to the British economy, and they will make the best out of the situation (which is ill-favoured to them to begin with, because the EU would have been better off with UK). The disarray and fear rising in the UK will only refuel the flames, it is now more apparent than ever than that the EU will essentially decide on the state of economy in UK for the next 5-10 years at least.

Even if a well-balanced agreement was to be achieved in negotiation, PM May is hanging by a thread and may very well not be able to pass the bills, and even if she does manage to push it through, there may be a serious backlash from the public that voted for a brexit and did not mean a semi-brexit or a quarter-brexit.

Then, you have the timing element. The markets won’t wait much longer before the pound comes crashing down like a china doll. It was already expected to have a finalised brexit agreement by now, and May’s lack of assertiveness does not reassure the markets things will bode well.

Where should be pound be heading to in each scenario?

  • If a deal is made by October, it passes, and regarded as a good deal for the British economy, the Sterling may jump 5-7% back to the 1.20’s (against the Euro).
  • If a deal is made by October, passes but it is seen as the kind of deal that May was forced into complying with and is not favourable enough with economy, we are seeing the 1.15-1.18 range as fit (pretty much where it’s been at over the past few months).
  • If a deal is made by October, but PM May is unable to pass it, it signals a “no-deal” and pound will shift below 1.10 against the Euro, and may reach parity by year’s end.
  • If no deal is made by october, it signals a “no-deal” and pound will shift below 1.10 against the Euro, and may reach parity by year’s end.

Out of these scenarios, there is almost no upside to the pound. Only if the best scenario takes place we will be experiencing 5-7% increase, but in every other situation the GBPEUR will either stay where it is now, or decline. Hence, if you are considering exchanging your GBP to EUR and waiting for the “rates to improve”, we think it’s unrealistic. Better to pull the trigger now than to expect big hopes from a nation that voted “leave”.

The evolution of currency management for business

Currency management is now a key tool for many businesses involved in the global economy. The major factor affecting businesses is the impact that currency exchange rates can have. Any organisation which deals with cross-border payments overseas now needs a robust currency management system in place.

The basic reason is that it will preserve cashflow and help to protect business capital from fluctuations in the currency markets. Effective currency management will mitigate the risk when exchanging a foreign currency into your own. Making sure you get the best value when conducting international money transfers is essential for the financial side of your business.

If you fail to pay attention to managing your currency dealings effectively, in the long run it could really come back to haunt you. With that in mind, it is key to think about how you will do this and what the best strategies are for currency management in the modern business world.

Currency management has changed over time

The simple truth behind this kind of financial management is that your company needs to keep more of the money it is sent and also to be paid the amount you were expecting.  There have been various ways organisations have looked after this previously. The major ones include:

  • Clever invoicing – one classic way many businesses dealt with managing their currency risk in the past was to have the order and invoice in their own currency. This effectively gives the other party in the transaction all the risk and protects you. As you have an order for £50,000 and an invoice for £50,000, you have no chance of losing out if the exchange rate moves against you. Of course, this could sometimes take a lot of negotiation!
  • Netting – this is another method that was used a lot in the past by larger companies when operating overseas. If you owe an Australian supplier $10,000 Australian Dollars but have an Australian subsidiary company owed $11,000 Australian Dollars, then you can use this to your advantage by netting off your group currency flow. This means that there is only $1,000 Aussie Dollars at risk rather than the full $10,000. This would need to be happening with transactions that are going through at more or less the same time though, so it could be tricky.
  • Matching – another traditional method that some businesses used to manage their currency was called matching. That works by using a supplier and someone your business owes money to that uses the same foreign currency. If you should be getting $1 million from a US based customer at the start of the month but then need to pay $750,000 to a US supplier in the middle of the same month, just open a US bank account. Have the $1 million your business is owed paid into that and then pay the $750,000 you owe from the same account later in the month. That means you only have $250,000 exposed to currency rate risk. Of course, it did mean you had to leave a lot of money sitting in the foreign account for weeks on end which was not always practical.

Currency management has moved on

Recent years have seen currency management for business move on from the above mentioned more traditional methods. Online money transfers have replaced the old-school banking ways of managing currency. This online change has been instigated by the internet boom and the way in which businesses can now look after their finances digitally.

But why has international money transfer via online companies become so popular? In many ways, it has given businesses an easier way to move money around with no banking fees and quicker transaction times. In terms of managing currency exchange risk, it also wins out. It has none of the above drawbacks but still allows companies to access the best exchange rates on any given day. Online money transfer sites also give a lot of information on the current exchange rates, so business can make the correct decision on when to send money or not.

Any sensible business owner will naturally want to compare international money transfer providers to find the ones with the best exchange rate on the day. Luckily, the internet makes this very simple to do.

Currency management is key for individuals too

Effective currency management is as vital for personal money transfers as it is for business. Although it may be on a much lower level, getting the best exchange rate you can when sending or receiving payments is essential. Once more, the modern online money transfer sites available are a fast, secure and simple way to do this yourself. Take the time to manage your currency for both business and personal use and you will not regret it.

The complex financial relationship between exporters & importers

Export and import are one of the most important concepts when it comes to the economy of the country. Exporting is the transport of goods to the outside world and import is the transportation of good from outside the country. In order to have a healthy economy of the country, it is important to have a balance import and export status and in order to have that, it is important to have a good financial relationship between exporters and importers.

Competitive advantage:

Given the mechanical enrichment, the characteristic recourses and their profitability, a nation may create the conditions permitting for trading some portion of its own generation, regardless of whether the particular circumstance of its own starting gifts would not have permitted it. This is conceivable if nation specialists may settle their offering costs as an increase over expenses.

Creation probability wilderness:

It is the arrangement of every single conceivable mix of generation achievable in a nation in full business and misusing all the accessible information sources. If there should be an occurrence of embracing only one info the outskirts is direct. In the event that of embracing two components of generation, they both are experiencing diminishing comes back to scale and the state of the outskirts is arched.

GDP:

Those fares carry cash into the nation, which expands the sending out country’s GDP. At the point when a nation imports merchandise, it gets them from outside makers. The cash spent on imports leaves the economy and that abatement the bringing in the country’s GDP. Net fares can be either positive or negative.

Trade finance

As a rule, merchants of merchandise or administrations need to get paid as quickly as time permits, even before they exchange, and purchasers need to postpone installment for whatever length of time that conceivable, to keep up solid income and give the purchaser time to offer on to their end clients. Trade finance means that outsiders can include an incentive by offering some type of budgetary certification, connecting the fund hole, and guaranteeing trust between the purchaser and the merchant.

Much exchange is done cross-outskirt, which can expand the dangers included when bringing in or sending out products. Sending out merchandise to another nation or locally to another purchaser is intrinsically dangerous. Accordingly a developing organization will need to moderate a portion of these dangers and furthermore structure their fund so as to permit practical development.

Trade rates:

Residential cash that has acknowledged fundamentally may represent a test to the cost-aggressiveness of exporters, who may wind up evaluated out of fare markets. This may weight a country’s exchange adjust.

Geography:

Geography also plays an important role in the relationship between exporters and importers. One of the primary trading challenge that you may need to manage is the separation. On the off chance if you are wanting to send out your merchandise to a nation that is far from your area, the procedure can get somewhat convoluted. Particularly if the nation is in an alternate mainland and accordingly, an alternate framework can be used. What’s more, the more extended the separation gets, the more intricate transportation gets.

5 Things To Research When Setting Up Your Business

Getting your new start-up to run smoothly can be a complicated process. There are a lot of things that you need to focus on, with thoughts about everything from insurance to market your business flying around your brain. We know that you want to get everything right the first time around, so we’ve put together a list of things that you should research before you get started.

Know Your Target Audience

If you don’t know much about your target audience, then you need to sit down and do a little research. These are the people that are going to be buying your product or using your service, so you need to know how they think and what they want. Do some research, talk to other local businesses and get a good understanding of your target market.

Get the Right Business Insurance

Although you might already know that you need insurance for the building that you are going to be occupying, you might not realise that you also need other types of insurance for your start-up. To ensure you are fully covered and don’t run into difficulties late down the line, you’ll want to seek advice from an insurance company that specialise in new business insurance. Small business specialists Hiscox Insurance offer advice on each type of insurance you will need, focusing on the unique needs of fledgling businesses. Seeking out information from established insurers and online resources, such as the Money Advice Service,  gives you the opportunity to learn about what is required for your business before you buy.

 

Work on Your Online Presence

In these digital days, without an online presence your business is not going to beat the competition. If you are one of the 50% of small businesses that don’t have an online presence, then you should think about changing that.

People use the internet to do their research, plan their weekends and discover new products. It is very likely that your audience will check you out online before giving you a visit. Do your research about what apps and devices your target audience use and join the relevant social media sites. You could even give your website a bit of an upgrade if you want to impress.

Secure the Funding

If you are in the middle of writing your business plan and you are unsure if you can afford everything you need then you should think about doing some research on funding. You might actually find that you can secure potential investments quite easily through crowdfunding or private investors. See what’s out there and how you compare, find your unique selling point. You’ll then be ready to ask about and see if you can secure that funding and watch your business grow.

Find Your Employees

We’re not just talking about the fact that you are going to employ people to work for you. You need to make sure that you know exactly how many people you need and how much you can afford to pay them. This business is your baby and you will want to save as much money as possible. Don’t over hire and don’t put your business in jeopardy by under hiring either. These people are as much a part of the business as you are, they are essential to its success.

With so many things to consider and implement when setting up your business, dividing the research into key areas can help keep you organised.  Once you’ve identified your audience, secured the protection and funding you need, you’ll be ready to develop an online strategy.

From Rags to Riches: Bitcoin’s Path to Success

It was not so long ago that bitcoin was a word which meant nothing to all but a small group of tech-savvy people, and even then it barely raised eyebrows. Back in 2010, two years after it was first created, bitcoin’s value had risen to the (hardly) dizzying heights of $0.06, which was still fairly impressive for a digital currency (cryptocurrency) which had no intrinsic value.

Fast-forward seven years, and one bitcoin had ballooned to a value of almost $20000, something which was almost unfathomable just a few years previous. Here is some further information on bitcoin’s path to success.

Trading Bitcoin

Part of the reason for bitcoin’s growth as an asset was that it became easy to buy bitcoin through coin exchanges, meaning that investors had greater access to the cryptocurrency. It is both unregulated and decentralised, meaning that it has no nationality, and its value is determined solely by supply and demand.

This meant that, as it became more widely known, its value shot up as more and more investors bought their own bitcoin. This resulted in a bubble, which eventually burst as bitcoin’s value declined, although bitcoin remains incredibly valuable.

Blockchain Technology

Part of the reason for bitcoin’s success is the incredibly innovative technology which underpins it. Blockchain was created to facilitate bitcoin transactions, and was a technology which was well ahead of its time.

Nowadays, more and more uses are being found for blockchain technology, and there is a global market for it which is set to benefit from strong growth in the coming years. Formed of a chain of digital ‘blocks’ of information, blockchain allows bitcoin to be transferred safely and securely, and may well be the real star of the show.

Lessons from Bitcoin

The rise of this innovative, disruptive technology can teach us many lessons about success and what it takes to create a powerful, investment-worthy product. Perhaps one of the key lessons is that innovative technology must be embraced, as it is changing the landscape for people and industries worldwide.

As such, it is well worth keeping an eye on technological developments, especially those like bitcoin which have the potential to revolutionise existing systems (e.g. payments).

Bitcoin likely has much potential which is yet to be explored, but it has certainly taken its place on the world stage. As such, it is easy to envisage how it may continue to grow, and potentially even be used across the world as a viable currency in the near future.

FCA to investigate high cost short term credit industry

The Financial Conduct Authority has recently announced it will be scrutinising those responsible in providing high cost financial products. The City regulator has raised concerns about the impact of high default charges for missed repayments as well as above average interest rates for those taking out loans relating to catalogue buying, motor finance, rent-to-own and more, worrying about the impact these fees have on the most vulnerable in society, who often take out these financial products.

The short-term credit industry has been more strictly regulated since the FCA took over  this industry in 2015, replacing the Office of Fair Trading, and implementing a number of new measures to ensure firm’s fair treatment of customers. These have included a daily price cap of 0.8% for companies in the payday loans sector as well as stricter authorisation requirements and a limit on default charges to £15, to help prevent customers falling into a spiral of debt.

These new rulings have been notably successful so far, with reports showing fewer complaints for the payday loans sector since the FCA takeover, with 760,000 loans funded in 2017 compared to over 1.2 million in 2013. As a result, the FCA has stated that it will not be reviewing the payday loans sector again until 2020 due to the achievements that have been made.

Nevertheless, the FCA has made it known its intention to implement stricter regulations in other high cost industries. One area of investigation will be unauthorised overdrafts. The FCA wants to clamp down on the high costs involved with these, which can often be far greater than the fees involved with payday loans that have come under much criticism. FOr example, an unauthorised overdraft may end up costing a customer as much as £6 each day, or £90 a month overall. In its review, the FCA has stated that its new proposals regarding unauthorised overdrafts are hoped to save customers up to £140 million each year.

Furthermore, the FCA has stated its desire to review the rent-to–own market, specifically the issues regarding the lack of price caps in this industry. To clarify, the rent-to-own market refers to individuals renting household products such as washing machines and TVs on credit, with the customer owning the product once the contract has ended. However, the FCA has raised concerns about these business models, as many companies in the rent-to-own market end up charging customers as much as £2,000 over time for a product that could be bought for just £300 if they were able to buy it outright.

Whilst this move by the FCA has been warmly welcomed by many, others have raised concerns that stricter regulations could end up wiping out catalogue and rent-to-own companies entirely, meaning the potential loss of employment for thousands. With that being said, the FCA has noted that the payday market has been able to continue operating despite the enforcement of new regulations, whilst also ensuring at the same time that customers receive fair treatment and are not taken advantage of by businesses, meaning that consumers are much better protected from high-cost credit rates than was previously the case.

FCA regulation sees an increase in consumer confidence for loans

It’s an industry that has often come under intense scrutiny, but the high cost short term loans sector has seen a significant increase in consumer confidence. This comes as a result of the FCA facilitating dramatic changes and the enforcement of new regulations. In fact, a recent review by the FCA has stated that the noticeable improvements in the payday loan industry means that it will now not be reviewing this sector again until 2020. We take a look at the reasons why the FCA has successfully increased consumer confidence in the high-cost short term loan industry.

The introduction of the FCA

Previously  the high cost loans industry was regulated by the Office of Fair Trading, but in 2014 the Financial Conduct Authority took over as the main regulator for consumer credit, with this being officially launched at the beginning of 2015.

The FCA made it clear from the very beginning its desire to facilitate change within the industry, wanting to ensure that businesses engaged in responsible company practices so that customers were treated fairly. The regulator also made clear its aim to cut down on the most vulnerable in society being targeted by this sector and its sky-high fees.

Authorisation

One of the first rulings implemented by the FCA was to ensure that all loan providers and introducers brokers were fully authorised before they could carry out any business activity. Whilst applications for authorisation were being processed, businesses in this sector were granted interim permission, however, the high levels of compliance meant that over half of companies providing high-cost short-term loans were removed or exited due to increased costs.

The result has led to greater consumer confidence in the loans sector as it has significantly diminished the practice of brokers selling customers data and given strength to payday loans direct lenders – ensuring that payday companies can only survive by adhering to responsible business practices.

The price cap

Furthermore, the FCA also introduced another new proposal: a price cap for the payday industry. This was enforced so that lenders now had a limit to the amount they could end up charging borrowers.  This equates to a capped daily interest of 0.8% percent (equal to £24 per £100 that is borrowed). The FCA also introduced a cap on default charges which is now limited to a one-off fee of £15.

Consequently, customers can have the confidence that they will not end up having to repay double what they asked to initially borrow. In addition, this price cap was implemented to also encourage new competitors in the market to compete over other factors such as customer service and lower rates.

Credit and affordability checks

Under new FCA regulations, all lenders are required to carry out full credit and affordability checks before they can agree to approving a loan. This is to ensure that responsible lending practices are adhered to and so that it is possible for consumers to borrow without ending up falling into further financial difficulty when it comes to making repayments. Now that the role of underwriting places a much bigger role in the short-term loan industry, there are potentially huge fines for lenders if they do not have sufficient checks in place, with payday giants Wonga and QuickQuid fined for this very reason.

Overall, with higher barriers to enter in the payday industry, tougher rules on rates charges and checks carried out, it is essentially the most compliant and responsible lenders that are left to trade. As a result, prospective borrowers can have peace of mind when borrowing that their information will be treated carefully and they will be dealt with in an honest and transparent way, something that has boosted consumer confidence accordingly.