nline gaming is one the fastest growing trend in today’s generation. Online gaming has never been so popular. According to an Ipsos Reid survey, more than half of young people say they visit gaming sites and play online games several times a week.
About online gaming
Humans are playful creatures. Gaming, like most players, provides small achievements, rewards, competition and social collaboration in a way that people enjoy. Computer games can use a PC or consoles, such as PlayStation, Xbox or Nintendo, and can be connected to the Internet to get bonus features or to play with other players using the same game. There are also many web-based games that utilize Flash Player. Facebook has many of these games, which people use to kill time while waiting for responses from friends, while also strengthening social connections through shared gaming with their friends.
Games can have virtual economies with real-world value. Players that do well can win prizes in some games, and some games allow users to generate their own content that can be bought, sold, or traded. More commonly, valued items can be a result of la ong game play that can represent a significant investment of both time and membership fees.
Growth of Online Gaming Market
The State of Online Gaming 2018 market research report highlights the latest findings in an ongoing series of consumer surveys about online activities and online gambling businesses.
This report is based on responses from 3,000 consumers age 18 and older in France, Germany, Japan, South Korea, the United Kingdom, and the United States who play video games at least once a week.
Respondents were asked questions on a variety of topics to determine the types of games and how often they play, the devices they use, how they access content, and what they think is important for a successful gaming experience and unlawful internet gambling enforcement
Highlights of this report include:
- People who play video games spend an average of nearly six hours each week playing. Gamers 18-25 spend the most time, at more than seven hours each week.
- Globally, gamers spend more time playing on mobile phones than on computers, tablets, or gaming consoles. However, men and people older than 45 spend more time playing on desktop or laptop computers than any other device.
- Nearly 85 percent of gamers download free games multiple times each year. However, only 55 percent are willing to pay to download games.
- Gamers spend an average of one hour and 48 minutes each week watching other gamers play online on sites such as Twitch. This compares to two hours and 27 minutes spent watching traditional sports on broadcast television.
- Millennial gamers (age 18-35) spend more time watching other people play video games than they spend watching traditional sports on television, while younger gamers (age 18-25) spend almost an hour more each week watching online gaming than watching traditional sports.
- Globally, gamers play consecutively for an average of one hour and 20 minutes at a time.
- More than 27 percent of gamers admit to playing video games at work at least once a month.
- Nearly one third, 32 percent, would quit their job if they could support themselves as professional video gamers.
- Gamers are concerned about online security. More than half will not continue to make purchases or play games on a website that has previously suffered a security breach.
- Globally, gamers are downloading games at the same rate they did a year ago. Younger gamers are downloading games more often than a year ago.
- Gamers’ most significant frustration is with the length of time it takes to download game files.
- Gamers play casual single-player games such as Candy Crush or Angry Birds more often than other types of games.
- Fast performance is more important to gamers than a game being simple to play, having an interesting storyline, or being available offline.
- Consumers prefer downloading video games rather than purchasing physical copies or renting or trading them.
Payments processing requirements in Online Gaming Industry
Merchant Accounts for Casinos
Physical casinos that don’t offer gambling online will usually have an easier time securing a merchant account, but processors still consider it high-risk. In-person transactions are less risky from a processing standpoint. Additionally, the customer is physically present in the legal business, not accessing it from another state that prohibits gambling. But the potential for chargebacks from “buyer’s remorse” is greater than in some industries, and age restrictions are still in place. You should expect to need a high risk merchant account for casinos. Additionally, keep in mind that “chips” for gambling will still need to be purchased in cash.
That said, many casinos offer services other than just gambling, such as food and alcohol sales, gift shops, catering and events, and more. If your casino offers such services, be sure to secure a separate merchant account for each type of service. You don’t want your on-site wedding event department accepting payments through your gambling floor merchant account.
Aside from being a good business practice, maintaining separate merchant accounts will help your bottom line. An on-site restaurant or other low-risk department will be able to secure a merchant account with more favourable credit card processing rates.
When the New Jersey online gambling industry went live in November 2013, there were plenty of hiccups. When sports betting goes live, you can expect similar speed bumps.
One of the biggest hurdles legal online gaming had to overcome was the alarming number of credit card transactions that were declined. Things have certainly improved, but even five years in, payment processing continues to be a thorn in the side of the industry.
After years of denying offshore gaming transactions, banks and credit card providers haven’t shown much of an interest in changing longstanding policies in order to give special exemptions for the trio of states that legalized certain forms of online gambling.
The usage of digital wallets like Paysafe’s Skrill or NETELLER have made great strides as an alternative payment processing option. But as Erlick notes, there’s still a lot of room for growth.
Role of a high risk payment processor in Online Gaming websites.
1.More sales opportunities
Accepting credit cards gives your customers more options to pay for purchases and actually increases the likelihood that they will make a larger purchase. It’s been shown that customers are more comfortable making larger purchases using their credit card, likely due to bank cardholder protections and the physical detachment from cash. Accepting credit cards also allows your business to set up an online store where gambling merchant accounts customers from around the world can shop for your products and services 24/7, giving your business significantly more opportunities to make sales.
2. Improve your cash flow
Accepting credit cards affords you the ability to receive your deposits as quickly as a few hours or a few business days. Compared to checks which can take up to 30 days to clear and invoices that can take up to 90 days to be paid (if they’re paid at all!), accepting credit cards gets money into your business’s bank account faster.
3. Speed up your transactions
Authorizing a credit card takes only a few seconds, giving you more time to manage the rest of your business and help more customers. If your business accepts tap and NFC (Near Field Communication) payments, then the entire transaction can be reduced to a few seconds. This means faster checkouts and shorter lines for your customers, and more sales in less time for your business.
4. Expand your market while staying competitive
Visa and Mastercard are international brands. By accepting these card types through an online gaming merchant account bank, you have access to customers in over 170 countries who are able to pay for your products or services with just a few clicks. Accepting online gaming merchant account high-risk credit cards also helps you keep up with your competition by meeting customer expectations for payment options online gaming merchant account quotes– if you don’t offer the payment type that they’re expecting, then there’s a greater chance they will go to another business that does. People are carrying less cash than ever before, and it’s unlikely your business can afford to ignore this trend of opting for an online gaming merchant account.
Starting an online gaming business is a daunting task.
The gaming industry is on the cutting edge of payment technology. Globally, nearly $400 billion is spent annually on gaming. This equates to thousands of debit and credit card transactions being processed every day by the diverse entities comprising our nook of the global economy.
Today’s gaming industry offers customers a range of wagering options, from traditional brick-and-mortar to the latest casino games online or on mobile devices. Amid the growth of platforms, gaming is increasingly becoming a target for criminals looking to obtain cardholder and transaction information, this online gaming merchant account requirements have new additions now.
Gaming isn’t the only industry being targeted by hackers. High-profile retail companies, banks, and even electronics manufacturers have been recent victims. Despite the millions of dollars ,companies spend on protecting their online assets, they have been hacked and confidential data has been stolen, causing significant damage to companies’ reputations.
Regional frameworks are important for every operator, not only from a legal point of view, through the necessity of obtaining a gambling licence, but also because every player in the industry must develop and provide products that are specially customized for a particular jurisdiction in order to assure a high level of compliance standard.
Since operators, especially start-ups that are ready to access the iGaming industry, need to consider aspects like online gambling licences, payment mechanisms and solutions specially tailored for a specific market like online gaming merchant account , a growing demand emerges for dedicated iGaming providers that can respond to these requirements through white label solutions and professional services.
Ongoing efforts must be made in order to maintain high standards and keep your customers fully satisfied. At the end of the day, it’s the joint effort of your software provider and your marketing and sales departments that need to align in order to bring your business forward.
Tying It All Together
In terms of gaming, as the industry goes further into the online space and given the nature of modern fraud, there certainly is the risk. Any gaming merchant needs to be careful in terms of monitoring whether a card is stolen or not and protecting the data they obtain.
Many states also have strict laws governing the security of personal information. While those laws are generally not part of gaming control acts, gaming licensees are nevertheless subject to the acts’ provisions.
The need to protect customer data is more important now than ever before as the casino industry rapidly evolves. There isn’t a “typical guest” anymore, especially in a brick-and-mortar establishment – some are there for dining, some for concerts or shows, some for shopping, while a smaller percentage visit solely for gaming there for security features in your online gaming merchant account are an important concern.
What’s needed when applying for a casino and online gaming merchant account?
- To obtain a casino and online gaming merchant account through us, a business needs to fill out IPayTotal’s online application. In addition to the application and a secure, operational website, merchants also must have the following items handy to provide to processors and underwriters:
- A valid, government-issued ID, such as a driver’s license
- A bank letter or a pre-printed voided check
- 3 months of the most recent bank statements
- 3 months of the most recent processing statements, if applicable
- A SSN (Social Security Number) or EIN (Employer Identification Number)
- Chargeback ratios must be under 2%
IPayTotal can’t guarantee any online gaming merchant account approvals, but it does promise a simple, streamlined application process. Merchant accounts are approved within 24 to 48 hours.
When casino and online gaming businesses apply for merchant accounts, processors and underwriters want to see that they are running legitimate, reputable businesses.
During their online gaming merchant account setup review, underwriters look at many factors to ensure credit card processors are not taking on any unnecessary risk. Merchants that are considered high risk means processors are taking on a greater potential financial burden.
Factors that determine a business’ risk in an online gaming merchant account bank include:
- A history of high chargeback (credit card transaction disputes) ratios
- Bank statements
- Credit card processing history
- Credit scores
- Negative bank account balances
- Unpaid bills and late payments
The best way to prepare for the review for an online gaming merchant account is to have a principal in the business with a good credit history apply for the account, pay any outstanding debts, and have some money in the bank. Before the review is the time businesses need to take care of anything that looks questionable.
Taking these steps likely will increase a business’ chances of getting a casino and online gaming merchant account/ high risk merchant account approved with fewer restrictions, such as caps on higher processing volume or a lowering rolling reserve.
How iPayTotal helps Online Gaming merchants
Though all signs show that online gaming and casinos are lucrative businesses, many traditional credit card processors and financial institutions won’t take a gamble on them. The industry’s background and history, high chargeback ratios, and potential legal issues due to ambiguous laws keep banks away from these merchants.
To process credit card payments effectively and efficiently, businesses need to turn to IPayTotal to obtain a casino and online gaming merchant account. Specializing in providing high-risk merchant accounts / alternative payment methodsfor social gaming, MMO, and online casinos, IPayTotal offers customized payment processing solutions and an online gaming merchant account for all types and sizes of companies.
Online Gambling Merchant Account Fees
Our online gambling merchant account fees are industry-competitive and affordable, and the application process is free – iPayTotal does not charge a merchant any fees until they begin processing transactions. Once you have been pre-approved, our underwriting department will match your business with the acquiring banking partner we feel is the best fit for your needs. The bank will then process your application and determine your merchant account fees.
Your fees are contingent on several factors, such as the merchant’s processing history, type of industry (high or low risk) and/or projected sales volume. Each online gambling merchant account is different, but typical fees include:
- Merchant Account Fee
- Transaction Fee
- Discount Rate
- Merchant Account
- Registration Fee
- Monthly Statement Fee
- Chargeback Fee
- Refund Fee
- Rolling Reserve
We at iPayTotal do our best to open each business relationship with a 10-minute conversation to find out the key elements of business before going forward. Immediately, we establish a connection with prospective merchant partners and decide then and there whether or not we’re able to find high-risk merchant services solutions for them.