The gaming industry has become one of the most successful businesses in recent years. Technology development has been a great ally in this process, helping gaming companies to improve and expand their business. A great example is the casino industry that saw an opportunity to grow by using technology.
Flexibility is one of the main reasons why the gambling industry adjusted so well on this new format. Players have access to the casino tables at the palm of their hands. Internet connection is all you need to play your favourite games, with multiple options available. It is one of the most lucrative businesses recently, with £5.3 billion profit, and 17% of the population connected through online gambling.
For merchants, this is the best timing to start looking for opportunities in the area and new ways to do business, however, there are important things to consider.
You need an Online Gaming Merchant Account
Online gambling merchants need a merchant account to process payments with credit and debit cards. The business offers great possibilities for revenue but if you don’t have an account that allows clients to pay with multiple options, you won’t succeed. The main problem is that merchants face a few challenges, not only to obtain a merchant account but also to choose the best provider that understands the needs of the business and can offer customised solutions.
Gambling merchants have a hard time obtaining a merchant account because the business is considered high risk. The high volume of chargebacks and risk of fraud are only a few concerns for banks and financial institutions, which make it hard to provide an account for such merchants.
Why is Online Gambling a high-risk business?
Banks and financial institutions have their own rules and criteria to decide if the merchant will obtain a merchant account or not. The number of chargebacks and refunds as well as the high volume of turnover in the gambling industry are some reasons that put the business on the high-risk list. The fact that many merchants are new in the area is also a factor because if you’re new, it’s likely you have a poor credit history or no history at all.
Safety is particularly important when it comes to online business, especially for customers. Your gaming platform must offer a safe environment so that players feel safe to use their credit cards or any other payment option without the risk of fraud. Many gambling businesses aren’t able to offer a safe platform for their clients, becoming another reason for being classed as high risk. The fact that gaming businesses are usually based offshore also make it a high-risk business.
Luckily, there are payment providers that can offer an option for gaming merchants with customised solutions, like iPayTotal.
Credit card processing for gambling businesses is still a big challenge, mainly because the industry is considered high risk; however, the gambling industry has always been a profitable business with huge potential in the online world:
- A report from Nasdaq shows that online gambling revenues rose 66%, to $65 million, in the city of New Jersey – one of the leaders in online gambling in the USA – this year.
- Since 2008 the gambling revenue from offline gambling companies in Europe has stagnated as the online gambling merchants’ revenue keeps growing.
- By 2023, the total income of the online gambling industry in Europe is expected to reach €33 billion, according to Statista research.
The fast growth of the online gambling industry allowed other businesses to rise also, such as the fantasy sports industry. Sports betting or esports betting became more popular as people were more involved with fantasy sports websites.
Research shows that in 2019, the global fantasy sports market size was $18.6 billion, and it is expected to reach $48.6 billion by 2027.
Despite its success, there are challenges to overcome, especially when it comes to credit card processing. In this article, you will see what the alternatives are for high-risk merchants in need of a processing solution for gambling businesses.
Why are sports betting and gambling businesses considered high-risk?
The most common reason why banks and traditional financial institutions consider gambling businesses as high risk is the excessive volume of chargebacks and fraud actions on unsafe payment platforms.
These organisations are concerned about their reputation in being associated with the gambling industry, which will no doubt be unsuitable for their image. Fantasy sports are also considered a form of gambling; therefore, payment processors consider them a high-risk business too.
Chargebacks in gambling business usually occur due to friendly fraud. There are many cases of gamblers who feel embarrassed by the amount of money they have spent on games and insist that those transactions are not theirs – the so-called ‘player’s remorse’.
The risk of data breaches and hacking is also a major concern for merchants and players. More than half of the players will not continue a purchase if they know about a security breach. — It is for this reason especially that your online gambling or esports betting merchant account must have the right payment processing solution to ensure players stay on your website.
Gambling merchants need to deal with legal issues too because there are factors to consider when it comes to authenticity. In the USA, for example, restrictions may vary from State to State. In the UK, on the other hand, online sports betting or esports betting is legal.
The UK Gambling Commission regulates sports betting for UK residents, so it is a very safe jurisdiction; however, it does not mean merchants should not worry about legal ramifications.
Protect your gambling business from fraud and chargebacks
The most important thing for an online player is to feel safe on a gaming platform or online casino, especially since there’s a financial transaction involved.
There are a few things you can do to ensure you provide the safest experience to your customers:
- Secure your channels during online operations to prevent fraud
- Take safety measures such as recording and archiving details of transactions
- Have an automated system on your website or app to detect any changes in the betting behaviour of players
- Offer customer support to avoid chargebacks or refund requests
- Ensure the players understand the fees and recurring payments they may have in your platform
Choose a reliable online gambling merchant account provider.
High-risk credit card processing alternatives for gambling merchants
Processing online payments safely is essential for an online business. This is why your merchant account provider needs to be a specialist in high-risk industries. At iPayTotal, you can have the safest and best payment experience for your online gambling business. We have dedicated experts with sports betting backgrounds to present you with options suited to your needs.
The gambling industry is dynamic and ever-changing. Your trust in your merchant provider must be rock-solid to run a profitable business. You need a partner that keeps a constant finger on the pulse of the industry and iPayTotal has been there for other sports betting companies.
Bet on this online gaming payment solution
It doesn’t matter the type of company you have. If you have a high-risk business, you need a payment provider that can help your company to grow and sell more. As a gambling merchant, you need to succeed internationally, with optimised payment options to reach different customers. If you want to process payments using credit cards and cryptocurrencies, iPayTotal can do that.
We understand that every business has a different need and preference and requires a particular solution. Your payment methods have to be easy, simple and able to enter any market. At iPayTotal, our priority is to help you achieve viability and success.
We offer quick approval; secure payment processing solutions; on-time pay-outs; fair rates; safe payment gateways; SSL encrypted servers; and facilities to offshore casino merchant account holders.
Our team is committed to help you and is prepared to answer any questions. Our international network of acquiring banks and partners are ready to offer you the best rates.
At iPayTotal, we have expansive experience in the high-risk industry, so we’re able to help you prevent fraud and deal with chargebacks.
iPayTotal offers customised solutions for online casinos, fantasy sports businesses, small lottery syndicates and much more. Our main goal is to deliver results: fast approval and reasonable rates to help you expand your business and increase profitability.
You will have access to our offshore merchant accounts for casino merchants with a safe payment gateway and real-time processing for your transactions: multi-currency alternatives, 3D secure processing and no monthly volume caps.
Contact us today and talk to one of our experts. The more you educate yourself, the more chance you have in having the best deal with your merchant account provider.
Apply now for a high-risk casino merchant account at iPayTotal and change the route of your business!