India’s foreign exchange market is flourishing, with the country’s forex reserves hitting over $600 billion (₹49 trillion) in August of 2023. However, India is still looking for new ways to innovate and ensure continued growth and success for the forex market, especially with more people participating and trading currencies. As such, technology is becoming a significant player in revolutionising the local forex industry. As technology advances and becomes more widespread among India’s population, producing more tech solutions for forex can invigorate the forex sector and invite more people to participate. Here’s how India is incorporating technology in forex:
Forex prepaid cards for travel
More and more Indians are travelling abroad, particularly to the United States. The tourism boom has even led the US to open two new consulates in the country. With travel increasing, the demand and need for efficient payment services and expanded payment methods are also on an upward trajectory. As such, the government has decided to increase payment options by enabling the issuance of RuPay Prepaid forex cards by banks in India for use at ATMs, PoS machines, and online merchants overseas. These cards will be enabled for issuance and use in foreign jurisdictions, including in India. Given that RuPay debit and credit cards are gaining international acceptance, expanding using forex can streamline cross-border transactions and bill payments.
Aside from issuing prepaid forex cards, the Bharat Bill Payment System (BBPS) was further expanded in December 2022 to include all categories of payments and collections, both recurring and non-recurring. The ‘anytime, anywhere’ bill payments platform has been operational since August 2017. By strengthening and streamlining digital payment systems, more people may likely begin using these cards and other digital payment methods, increasing user access and participation.
Forex market access
The advancement of technology has made the forex market much more accessible to regular individuals looking to trade currencies and build wealth. Most brokerages and trading platforms are available online, enabling forex trading as long as the trader has the right device and internet connectivity. Traders can then trade multiple currency pairs and access a wide selection of major, minor, and exotic currencies. Besides connecting people to the forex market, many brokerages and platforms offer innovative features and protective measures, including no slippage during price gaps, stable and low spreads, trading without swaps, and more.
Another revolutionary advancement in forex trading is that people can also trade using mobile app versions of trading platforms. With India’s 71% smartphone penetration in 2023, anyone with such a device can participate in the forex market, allowing for easier access to currency trading and more growth in the local forex industry.
Automated forex
With forex trading on the rise in India, technological innovations are helping streamline the process. Algorithmic trading, or algo trading, has increased in popularity. Aside from using human judgment to execute trades, computer algorithms can automate trading decisions in financial markets like forex. This tech enables the user to minimise the time spent on manual analysis and trading; algo trading systems or bots allow for trading at high speeds, identifying market trends, and managing risk. They operate on pre-programmed instructions to execute trades based on criteria like price, volume, or other market indicators.
By using automated or algo trading programs and software, it can be easier for beginner or novice forex traders in India to break into the market and participate. They can use their own experience while combining the benefits garnered from algo systems to buy and sell currencies in the best market conditions to profit. Algo systems can also encourage more market participation since they can cut out the menial tasks that can be challenging for traders to understand. While these systems don’t guarantee risk-free trading, they allow for an easier process for forex traders.
Technology is continually evolving and advancing, and India is capitalising on this growth to boost the local forex industry. By empowering existing traders and making the landscape much more accessible and beginner-friendly using tech, the country may see more market participation, allowing for growth in the nation and its citizens.
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