The internet has caused an explosion of new media and online gaming. According to Statista, the global media and entertainment market is projected to grow to $2.14 trillion by 2020. Online gaming is an important sector of that market, with global online gaming expected to expand from 126 petabytes in 2016 to over 568 petabytes by 2020. Apply now for High-Risk Online Gaming Merchant Account today and take advantage of this lucrative market while you can.
Gaming’s two largest regions are North America and Asia Pacific which, combined, account for 78% of global revenues. The demand for both single-player and multiplayer (MMO) games online is huge, generating $19.9 billion in revenue in 2016 alone.
All indications point to continued growth in the online gaming industry. But despite these impressive numbers, most banks and traditional financial institutions are reluctant to partner with online gaming merchants. A history of high chargebacks and ambiguous laws combine to classify online gaming businesses as “high-risk.”
In order to succeed in the digital environment, gaming merchants must be able to accept and process payments online. High Risk Merchant Industries, like online gaming, would do well to partner with experienced online payment service providers like SecureGlobalPay.
SecureGlobalPay Alternative for High Risk Online Gaming
SecureGlobalPay understands the challenges merchants face in partnering with traditional banks and financial institutions. We specialize in providing high-risk merchant accounts for social gaming, MMO, and online casinos, SecureGlobalPay offers customized payment processing solutions for all types and sizes of companies.
SecureGlobalPay offers comprehensive customer service as well as chargeback management tools, payment gateways and fraud filters. Complete SecureGlobalPay’s secure online application today and begin processing online payments in as little as 24 hours.
SecureGlobalPay offers merchant accounts to many specific types of businesses in the casino and online gaming industry, including:
- Horse racing betting
- In-play gambling
- Massively multiplayer online gaming
- Mobile gambling
- Mobile gaming
- Online bingo
- Online poker
- Social gaming
SecureGlobalPay has expertise in working with new and existing businesses, merchants rejected or terminated by another credit processor, as well as those with bad credit or a history of excessive chargebacks.
Applying for a Merchant Account for Online Gaming
Begin by filling out SecureGlobalPay’s online application.
Click here for a list of items you will need to provide underwriters for review.
Applications do not guarantee approval, but merchants who do obtain underwriter approval can begin processing credit card payments in as little as 24 hours.
The Underwriter’s Review
Underwriters are charged with confirming that an applicant is running a law-abiding, reputable business.
Click here for a preview of what to expect during the underwriter’s review of your merchant account.
During their review, underwriters looked at many factors to ensure credit card processors were not taking on any unnecessary risk.
Factors that determine a business’ risk 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
Merchants can best prepare by settling any unpaid debts and putting some savings in the bank. It is also best practice to have the principal with the best credit submit the application. Taking these steps will improve your chances of approval and diminish the likelihood your account will be restricted by processing volume caps or a mandatory rolling reserve.
The High-Risk Label
Online gaming falls into a legal grey area. The Unlawful Internet Gambling Enforcement Act of 2006 prevents gambling merchants from legally accepting wire transfers. Online gaming merchants need online payment service providers like SecureGlobalPay to process credit card payments.
Individual states have their own laws regulating gambling. Delaware, for example, has legalized regulated online gambling. Nevada has conditionally legalized online gambling. Louisiana and Iowa, on the other hand, have outlawed it. In states where gambling is outlawed, violators can be charged with a felony.
Casinos and online gaming businesses are considered high-risk by banks and traditional financial institutions due to their history of high chargebacks and high volume turnover. These factors combine to increase the liability to the processor when processing credit card payments for the business.
Online gambling is prone to friendly fraud. This occurs when a customer, having purchased a service, decides they do not want it after all and refuses payment by disputing the transaction.
As many online gambling merchants are based offshore, there have been some reports of money laundering and fraud. This off-shore status makes it more difficult to track and hold businesses accountable, thus increasing risk to processors.
Because of the rapid growth of the industry, a great many online gaming businesses are new. As such, they have no credit history. This increases the risk to processors.
When a merchant’s chargeback ratios exceed 3%, they have reached a point of excessive financial risk to a bank or processor. Merchant account providers can be hit with high fees by credit card companies and left on the hook for bills the merchant can’t cover. As such, they will terminate the account.
Cutting Chargeback Rates
Chargeback ratios exceeding 3% lead to termination of merchant accounts. Once these accounts have been terminated by processors, it is very difficult for a merchant to get approved for another.
Keeping records is an important first step to controlling chargeback ratios. Ensuring the exact date and time of a transaction are recorded along with the IP of the address from which the purchase was made will store key information that can be used to fight a dispute.
Providing prompt, efficient refunds to dissatisfied customers is another important step. In the long run, refunds are more cost-effective than chargebacks.
Providing clear communications channels also decreases the likelihood of chargebacks. Ensure that your business name, contact information and refund/return policies are prominently displayed on your website, in e-mails and all correspondence such as receipts, reminders and follow-up surveys. This will prepare clients for the charges they will see on their credit card statements.
Following up purchases with customer satisfaction surveys is another way to keep your business uppermost in the customer’s mind.
Most times, poor customer service, a lack of transparency and communication, and a flawed business model are the causes of excessive chargebacks. Offering full refunds, communicating with patrons, and having a skilled customer service team are easy ways to keep chargeback ratios low.
Cut Chargeback Ratios by 25%
SecureGlobalPay’s chargeback mitigation program is one of the best ways to avoid chargebacks. Four out of every 12 – or one quarter of all – potential chargebacks can be mitigated by using this program.
Casino and Online Gaming Categories
The United States and other countries, including the United Kingdom, assigns four-digit numerical Standard Industrial Classification (SIC) codes to businesses to identify their primary purposes.
Casino and online gaming merchants exclusively fall into the 7999: Amusement and Recreation Service, Not Elsewhere Classified SIC code.
Visit the United States Department of Labor to view a complete SIC list.
Federal statistical agencies classify establishments using a list of six-digit numerical codes, which are known as the Northern American Classification System (NAICS). The codes are used to collect, analyze, and publish statistical information about similar types of businesses and how they impact the US economy.
Online gaming and casino merchants use the following NAICS codes:
713210 – Casinos (except casino hotels)
713290 – Other Gambling Industries
713990 – All Other Amusement and Recreation Industries
Visit the United States Census Bureau’s Northern American Classification System to view the complete NAICS code list.
Merchant Accounts For Casinos & Online Gaming
Apply today using SecureGlobalPay’s secure online application form and begin processing payments in as little as 24 hours.
- No Application Fees
- Competitive rates
- No VISA/MasterCard Required
- Multiple Secure Payment Gateway Options