LeapRate Exclusive… Further to our earlier exclusive report that leading online CFDs broker Plus500 Ltd (LON:PLUS) has decided to remove Revshare payments from its 500Affiliates.com Affiliates program due to MiFID II regulations – going to an all-CPA based system – LeapRate has learned that Plus500 is further adjusting its affiliate payment model.
But this time, due to business considerations, not regulatory concerns.
Essentially, Plus500 is adjusting the CPA payment it pays to affiliates based on the type of trader referred. More for Commodities traders, less for Cryptocurrency traders.
According to the company, high traffic being generated from Cryptocurrencies has become cheaper to acquire, and as well is regarded as more risky due to its one-sided nature, with virtually all crypto traders going long.
The updated CPA rates, which will come into effect starting January 1, 2018, will be composed from a basic CPA rate depending on the location of the trader, and will then be adjusted depending on the trader’s category.
For example, should a referred client trade on a Commodity instrument, the affiliate will receive an additional $100 to the basic geo-based CPA rate. Conversely, if the client trades on cryptocurrencies, the CPA rate will be deducted by $200.
It will be interesting to see if Plus500, and other UK / EU based Retail FX and CFD brokers, will need to further adjust their client acquisition payment levels if European regulator ESMA has its proposals adopted to cut leverage allowed in CFD trading. A low leverage cap might make individual clients less valuable to brokers, requiring an adjustment in what brokers will pay for affiliate referrals.
The full message sent out by Plus500 to its affiliate base reads as follows:
With recent regulatory changes and market transition it has been an interesting and challenging year for us all. Thus, we would like to start with a big and sincere thank you for your constant attention and cooperation.
We do our best to maintain as attractive and beneficial as possible for our affiliates, while at the same time we analyze our working methods in order to remain profitable.
Two years ago, we have increased our payment plans rates significantly according to the market values at the time. We were pioneers in the attractive CPA plans offered to our affiliates, which at times were the highest in the market. Later on these rates have been imitated by our competitors.
Notwithstanding the above, in the past few months we have been reviewing our platform performance and efficiency of our affiliate program versus our other online initiatives. In addition to the high traffic generated from Cryptocurrencies which has become cheaper to acquire as well as its risky one-sided nature, for those reasons we came to the conclusion that we need to adjust/amend our CPA rates accordingly.
Eventually we have decided to roll over to the rates we previously offered our affiliates, regardless of the number of qualified traders per month, which remain very competitive rates compared to the market.
The updated CPA rates, which will come into effect starting January 1st 2018, will be composed from a basic CPA rate as well as an adjustment depending on the trader’s category (this will replace the previous bonus structure). For example, should one trade on a Commodity instrument, you will receive an additional $100 to your CPA rates as stated in our payment chart. On the other end, if your user trades on cryptocurrencies, the CPA rate will be deducted by $200.
To help you monitor your traffic, we have created a new feature the “Traders Segmentation” which is now available in your affiliate account. This tool aims at improving the performance of our affiliates by receiving better analysis of the traffic which in turn should hopefully assist you in earning higher CPA rates. For your convenience, you can also locate the Category (type) report under your “Tracking Reports”.
Please let us know if you have any questions or concerns as we will be more than happy to assist.
We look forward continuing this partnership and growing it further the upcoming year.