The Changed and Unchanged: How Apple's MetaTrader Ban Affect Your Business?

​Apple abruptly removed MT4 and MT5 trading platforms​ from App Store​ without any prior announcement on September 24, delivering a wide-spread blow to the forex and CFDs industries. Although iOS-based device users who have downloaded the trading platforms can continue to use them, they are unable to access any updates or upgrades on these devices.

At the very beginning, it was speculated that the ban was related to Western sanctions against Russia, but the rumor was refuted. According a comment, Apple banned MT4 and MT5 because the trading platforms allow automated trading robots or EAs, which place trades on behalf investors and are likely to be used to manipulate markets. Another reason is that MT4 and MT5 offer leveraged products that may result in huge losses to investors if not managed appropriately, which is in violation of App Store guidelines.

Though MetaQuotes released a new version of the MT5 web terminal in early November, Apple's move could push and have already pushed forex brokers to look at alternatives or even consider to develop their own trading platforms, as the market has already seen a growing demand for cTrader, Match-trader, and more. In the long run, MetaQuotes needs to find a solution or may lose its market dominance.

How will this ban affect the forex industry? How should forex brokers adapt? Fazzaco has reached out to a few C-level executives and explored how the massive fallout affected the forex and fintech industries.

Higher Threshold for Forex Start-ups

Earlier this year, MetaQuotes tightened its policy in granting white label license without clear guidelines, which hurts both white label providers and many forex start-ups as they get confused as to what's permitted and what's not. Fazzaco has learned from insiders that some forex start-ups fail to secure a MT license even after 3 months. Guess how much effort and money they have invested in it!

As MetaQuotes white label is almost not an option for new comers, they have to seek either MT main label, which is several times more expensive than white label, or cTrader, which puts them at a more disadvantageous position when struggling to survive: less popularity (compared with MetaQuotes), fewer assisting tools available, and more efforts in educating traders, regardless of white label or main label. Some forex start-ups may directly seek purchasing a MT-licensed entity, but there is an enormous cost!

It is definitely a hard year for forex start-ups. Not only did they encounter huge setbacks when applying for MT license, but they also had to face a fact: even they did secure the license, they would find it extremely difficult to onboard iOS-based traders after the Apple ban. So what should forex start-ups do?

(Vasily Alexeev, CEO of UpTrader)

"I think if MetaQuotes will soldier on with their new policies, it might make new start-ups look away from their solutions towards smaller competitors, such as cTrader and other companies. We can start to see changes on the market, now dominated by MetaTrader. It all depends on whether these start-ups will be able to convince their client base to use a new, unfamiliar trading platform. On the other hand, for first-time traders there should not be a big difference which platform to learn," commented Vasily Alexeev, CEO of UpTrader, one of the leading fintech providers that offers WL solutions, trading platforms, and CRM.

Alexander Geralis, Managing Partner at Finthentic​, expressed a more unambiguous attitude towards multi-platform, particularly cTrader.

"We at Finthentic see a sudden and strong demand to offer other platforms. Finally it is time for brokers to stop being a one-trick-pony. The future is multi-platform, proprietary platforms and a steep learning curve for dealers who became complacent understanding only MT5."

(Alexander Geralis, Managing Partner at Finthentic)

Alexander also gives advise to forex start-ups as to how they adapt to the new situation. One thing that should be noted is that many trading platforms, such as the leading competitor - cTrader, charge a volume-based fee, which is not cheap for forex startups in all sense. Obviously, the Apple ban and tightened regulation from MetaQuotes have raised the threshold for many new market players.

"For many providers these are turbulent times. The fact that there is opportunistic gouging and still no official clarity with MT situation does not help. Both brokers and WL providers will need to adapt. There are operational challenges for brokers but also commercial hurdles. Platforms are now almost exclusively volume-based in one way or another and they are expensive. Providers now take more of the broker's revenue. It can still be a very rewarding business but there are levels to this and you need to run your brokerage with this in mind."

"It is a difficult time for startups considering they cannot easily secure MT and the costs to startup have increased substantially. My advise to anyone looking to succeed as a new FX/CFD broker is to lean on the experience of your provider. If you are 'just another client', it is time to rethink your 2023 strategy," added Alexander.

"A forex start-up needs to consider what will be their target group. As we have seen lately, retail clients, who are the future, are looking for a modern design platform that incorporates all the necessary features. At the same time, a modern platform needs to be simplified and user-friendly. Furthermore, the copy trading or social trading feature will be a great addition since many clients want to interact with others and discuss their trading decisions. Another trend that is taking a lot of attention is gamified trading, which offers rewards, like tokens that can exchange with money rewards," suggested Giannis Nikola, Head of Dealing at CM Trading.

White Label Still an Option?

Despite disadvantages and unscalability, Alyona, Marketing Manager of Technology Vector​ Company​, strongly advocates white label for start-ups.

(Alyona, Marketing Manager of Technology Vector)

"We are aware of the changes that MQ made recently. We believe that these are correct and healthy changes that will bring further stability to the industry. We hope that other major technology providers will follow suit. I am confident that they (companies providing white label trading platforms) will remain in business. New reality will force them to address only regulated brokers. Offshore regulation will become more popular and I hope more start up brokers will move finally towards regulation." 

"As always forex start-ups will have a vast variety of options when choosing technology providers but now end users will have the option to distinguish between professional forex brokers and all the rest. We hope other big tech providers will adopt MQ strategy. In the long term, Forex industry will only benefit from such restrictions. I think WL should remain popular among start-ups. The threshold of entry to such a business is still very high. Most start-ups cannot afford the expenses of buying and supporting their own CRM and trading platform," commented Alyona.

But that does not mean white label providers can just sit and wait for clients. They are the first to bear the brunt.

"In such a fast-pace industry under turbulence, whoever remains static will eventually sink. White label providers should explore new technologies (in-house developed or third-party) to offer to their customers. Knowing that forex start-ups will, in time, have more software options to choose from, white label providers will have to readjust their marketing strategies and pricing policy in order to remain 'alive', competitive and profitable," suggested Stefano Sordini, CEO of NetShop ISP​. That is the jungle law, and the fittest survive.

Brokers to Develop Proprietary Trading Platforms?

Forex brokers also have to react immediately, as the ban suddenly prevents them from onboarding and even retaining iOS users. It's also hard to force an iOS user to switch to Android purely for the purpose of CFDs trading. For many existing brokers, the top priority is to minimize the ban's influence on their business.

"At the moment, the priority is to improve the clients' webtrader experience, while improving other aspects of UI/UX to make up for it. At GEMFOREX, we have many options to consider. There's internal discussions and market research going on, and we'll decide on the next steps cautiously," said Jessica Kim, Head of Marketing at GEMFOREX​. 

(Jessica Kim, Head of Marketing at GEMFOREX)

"GEMFOREX has been providing MT4/5 on PC, web and mobile, so of course we assume, a small number of the clients might consider switching to other brokers that provide apps developed by the company itself, which is more than reasonable if they enjoyed using MT4/5 on iOS mobiles. We could also assume some traders might consider buying Android mobile phones, which are not very expensive. However, when clients decide whether to choose a broker or not, whether to stay with a broker or not, the main consideration is not just the trading platform. Considering the preferences of a brand and the attachment they've developed over the years, trading conditions, relationship with account managers/IBs, etc., many clients are in a wait-and-see attitude, or discuss in the traders' community and refer to the dynamics of other traders. The removal of MT4/5 from the Apple appstore this time has the greatest impact on the acquisition of new users, and the the inability to update the app for existing users. Considering the proportion of the users, it is a bit of a hiccup for brokers like GEMFOREX. Because a good number of our existing users and potential users of our main markets prefer to use Apple mobile phones. However, the clients' preference for the brand is very strong, and so far, from the perspective of various parameters (new registrations, trading volume, deposits, etc.), we didn't experience any significant impact," added Jessica.

( Giannis Nikola, Head of Dealing at CM Trading)

CM Trading​ sees challenges, too.

"Baby boomers and Generation X still prefer the Metaquotes environment, which is how they learned, and it is challenging to offer them something new. However, they are open to trying new and modern trading solutions. Millennials, the most considerable number of our client base, have started looking for alternatives—asking for a more user-friendly trading platform to help them trade simply and fast. Lately, the rising popularity of social and copy trading is another point we need to mention," Giannis Nikola, Head of Dealing at CM Trading told Fazzaco.

Capex.com seems to be already prepared for the unexpected move.

"I think it took everyone by surprise. On the other hand, MT4 has been around for a long time. Apple is known for its innovative outlook; it's already predisposed to throwing out the old and creating the new, so we shouldn't be all that surprised. In fact, we were quite prepared. Our web-trader and app are top-notch and feel more modern than MT4 or MT5," said Octavian Patrascu, CEO at Capex.com.

According Fazzaco's statistics, 22 brokers offer proprietary trading platforms to investors, such as FXCM (Trading Station), SaxoBank (SaxoTraderGo & SaxoTraderPro), Dukascopy (JForex), ThinkMarkets (ThinkTrader), XTB (xStation), and CMC Markets (Next Generation). Will other brokers follow suit? After all, it is a time to test the resilience of established brokers.

"Only a few brokers can develop their platforms. Developing a proprietary trading platform is a significant investment and time-consuming since it must be tested for an extended period before going live. On the other hand, a start-up broker has too many, much less expensive options than creating a new proprietary trading platform from scratch. They prefer readymade solutions, which are plenty, or white-label solutions," commented Giannis Nikola. 

"Most brokers, who have developed their proprietary trading platform, are significant players with many years of experience and offering trading services. While the MetaTrader ban is big news for the trading world, it doesn't necessarily need to be bad news. It provides an opportunity for brokers and traders to look at the latest technology solutions available in the market," he added.

"GEMFOREX is actively exploring whether we can provide iOS users with a better way to use MT4/5. We're also open to consider the possibility of collaborating with other platforms. From a long-term perspective, we certainly aim to develop our own app," Jessica went straightforward with GEMFOREX's plan in the future.

(Octavian Patrascu, CEO at Capex.com)

"We already have a user-friendly app that's also very secure. And we're now building what we call the 'Super App', which will provide customers with an all-in-one financial services interface, which means it's an app that's not just limited to trading, it gives you easy access to an entire suite of investing options and products. So this is big for us. And we think it's what traders and investors are looking for, including traders who are fans of Apple,"Octavian Patrascu told Fazzaco that Capex.com​ is already in progress.

Opportunities for Solution Providers

While CFDs brokers are busy seeking alternative solutions, fintech companies, especially trading platform providers seem to be embracing grand opportunities.

There is no denying as to the negative impact from the Apple ban, according to Stefano. He also expects a market with more fierce competition and fairer pricing.

(Stefano Sordini, CEO at NetShop ISP​)

"It would be a lie to say we haven't been impacted by the recent turbulence in the industry, however our dynamics in the way we function allow us to be flexible and adapt in any crisis. Although we have lost a handful of existing clients (and double the amount of leads) due to their white label status being rejected by MetaQuotes, I am confident that things will turn around. Financially stable companies with reliable and cost-efficient solutions will continue thriving."

"We need to realize the importance of MetaQuotes in the financial industry. Technology providers offer products and solutions to be used for/within the Metatrader platforms whilst forex brokers compose their trading tools on what MetaQuotes has to offer (Web trader, trading terminal, Mobile applications). Inevitably what we are experiencing now is the consequences of a monopolistic economic environment. In my personal opinion this is the major change we are going to go through in the coming months, or even years. Solution providers have now realized the opportunities available and will attempt to develop new solutions for the industry. Although these may/can not replace the existing ecosystem that everyone got used to for so many years, they will broaden the range of solutions traders and brokers can choose from. More solutions equals higher competition, meaning fair pricing to everyone and higher level of innovation from the industry's technology providers."

But solution providers are not suggested to make too many bold moves. "As for the solution providers, it's a good time to leverage their technical skills to build their own trading platforms, although it might be a risky bet: MetaQuotes might decide to revert their policies at any time," Vasily, CEO at UpTrader sends a kind reminder.

Other Impacts

MetaQuotes seems to gradually lose its market dominance. It not only faces competitors like cTrader, Ninjia Trader, TradeView, to name a few, but also has to accommodate to changed preference of users.

"Based on our clients requests, we already see Forex & CFD brokers looking for new ways of offering access to the markets, so in short, yes, MT will be challenged by an increasing number of trading platforms indeed and companies like cTrader. And charting platforms like TradeView are well-positioned to take a chunk of the market from MetaQuotes. But also, given that Millennials (and even early Gen Z) starting to command sizeable amount of disposable income, we are seeing preference for more simplified interfaces, like, Robinhood, Webull, Revolut, Public.com and eToro," observed Mykyta Barabanov, CEO of Elite CurrenSea and SonderSpot.

(Mykyta Barabanov, CEO of Elite CurrenSea and SonderSpot)

​One of the most important reasons why MT4, an old-fashioned platform introduced in 2005, can last so many years, is that investors are used to its programming and a huge amount of EAs. Nevertheless, what has happened to MetaQuotes in 2022 may change it.

"Despite the resilience of this community, I do believe the tides will accelerate to turn towards more customer-friendly platforms, turning MQL community into even more of a niche. On the other hand, MetaQuotes community is quite special if not contrarian, and these type of communities are usually the stickiest. Let's not forget, MetaQuotes has been calling shots in retail Forex & CFD trading for nearly two decades now, it's take more than an indefinite ban on iOS to break it," added Mykyta.

The emergence of other automatic trading strategies and more sophisticated tools may signalize the decline of the once-dominant behemoth. Mykyta expects to see a divergence among traders,

"We already see better and better tools that let developers port MQl to cTrader environment. I imagine, new software on MQL will increasingly be built with other platforms in mind, just in case MetaQuotes business continues to slip away. I do believe that web-trader has its merits, but for serious trading, it's just not there just yet. I believe brokers will go into two directions, for pros and mql-hungry traders, to find suitable substitutions like cTrader, TradingView, & some proprietary tech, whereas for less demanding client, for something resembling Robinhood, public.com, eToro. MetaQuotes should be careful, to not loose touch with where things are going into the next couple of years, if they want to keep their market share."

As one of the leading liquidity providers, B2Broker noticed some interesting developments.

"We see a lot of interesting developments in the forex industry. One of the challenges for many retail oriented brokers is learning how to compete with crypto exchanges in regards to the crypto liquidity offer considering the vast variety of tradable pairs and services provided by exchanges. B2Broker specifically focused a lot lately to introduce a competitive crypto liquidity offer as a part of the multi asset package. Another apparent trend, in our opinion, is further adoption and development of algo based trading solutions and investment platforms. Being able to hook potential retail users with a ready made trading strategy proves to give brokers a lot of edge in attracting flow and we believe that this trend will continue," observed Anatoly Muhin, Dealing Department (Product Manager) at B2Broker.

But developing a trading platform is by no means an easy task. Even more, the network effect plays a bigger role. 

"It definitely gives an additional stimulus for providers of alternatives platform to further push their products. However we do not think that the recent developments create a free market to be taken by the alternative platform providers. At the end of the day it still comes down to how well your tech works and how effectively you promote it above all the rest. Developing proprietary trading platforms may give brokers a lot of edge for as long as they know how to position it and do not underestimate the complexity behind such a development. It should be noted that each trading platform is not only about the tech. The network effect plays a big role as it is easier to attract clients with a trading platform which already has a big community behind it. A proprietary platform does not have a network effect from the start. For a long time Metatrader has been a default choice of a trading platforms for many brokers and it continues to be so. Yet considering the recent developments, many forex startups might need to start looking at alternatives. Based on our experience, cTrader proves to be a very sophisticated solution as we receive a lot of positive feedback from our clients," added Anatoly.

Summary

It has only been no more than 3 months since Apple announced the ban on MT4 and MT5. The market did witness some interesting changes that affect each participant, including traders, brokers, WL providers...

The forex market has its own resilience. That is how it grows into the largest financial market in the world. 

When Swiss Franc collapsed, brokers adapted. Some big companies fell, while some others grew.

When all regulatory bodies tightened regulations on leverage, brokers adapted. They lowered leverage accordingly and started to seek offshore license and other marketing ways to retain clients.

When crypto frenzy occurred, brokers adapted. A huge amount of them expanded their crypto offerings and even began to provide crypto liquidity.

When Apple banned MT4 and MT5, they need, and will adapt.

Let's see how the market evolves a year later. Wish your business the best of luck!