The two largest gaming regions in the world, North America and the Asia Pacific will estimate to account for 78 percent of global revenues. In 2016, $19.9 billion had generated for massively multiplayer online gaming, which could play hundreds or thousands of players at the same time. Although all signs point to online gaming and casinos being profitable, many traditional financial institutions would not take the risk.
The industry has a history of high chargeback ratios and potential legal issues as a result of complicated laws that keep banks away from these merchants.
To accept credit card payments effectively and efficiently, businesses must work with PayCly to obtain a casino and online gaming merchant account.
We specialize in high-risk merchant accounts for social gaming and online casinos, among other things. Apply online now to begin the process. PayCly will set up chargeback management tools as well as a payment gateway with fraud filters once approved (within 24 hours).
Applying for an Online Casino Merchant Account?
To obtain a casino and online gaming merchant account, a company must complete a Pre-approval form. Aside from the application and a secure, functional website, merchants must also have the following items on hand to provide to processors and underwriters:
- A valid, government-issued identification document, such as a driver’s license
- A voided check
- Three months of bank statements
- If applicable, three months of the most recent processing statements
- An SSN (Social Security Number) or EIN (Enterprise Identification Number) (Employer Identification Number)
- Chargeback ratios must be less than 2%.
The review of Online Casinos Merchant Account
Underwriters examine a variety of factors during the review to ensure that credit card processors are not taking on unnecessary risk exposure. Merchants who are perceived as high risk imply that processors will bear a greater financial burden. The following factors contribute to the risk of a business:
- A history of high chargeback ratios
- Account statements
- History of credit card processing
- Credit ratings
- Bank account balances that are negative
- Late payments and unpaid bill
How to eligible for getting a casino account?
The best way to prepare for the recheck is to have a business principal with a good credit track record apply for the account, pay any outstanding liabilities, and keep a small amount of cash in the bank. Following these steps will almost certainly increase a company’s chances of getting a casino and online gaming merchant account approved with fewer obstacles, such as grips on higher processing volume or a lower rolling reserve.
Furthermore, many banks regard them as far too risky. Casinos and online gaming businesses are likely to have a large volume of chargebacks and refunds. This increases the processor’s obligation when processing credit card payments for the business.
Also, with so many friendly frauds, online gambling gets a jerk. When a customer changes their mind about a purchase, they can file a dispute. Their credit cards had not been stolen. They simply decided not to pay for the services. Many online gambling businesses are based offshore due to US laws.
And there have been reports of money laundering and fraud. Because they are located abroad, it is more difficult to keep track of the dollars, increasing the risk to processors.
Many of the businesses are new, with little or no experience or credit history. A lack of credit or poor credit increases the likelihood that a company will be unable to repay any of its debts to a bank or merchant account provider.
How does fraud impact Online casinos?
Fraud significantly reduces online gambling profits and taints merchant reputations. High levels of fraud can even result in the closure of merchant accounts. Many online fraud cases involve third-party credit cards that have been compromised. When the unauthorized transaction is discovered, the third party files a chargeback. This results in a loss of transaction amount and chargeback fees for merchants.
Credit card networks, in general, monitor chargeback activity and require merchants with high fraud and chargeback rates to take steps to reduce the numbers. Merchants who do not comply lose their accounts and must deal with high-risk payment processors.
Furthermore, merchants with a high number of chargebacks and fraud cases face additional fines from card companies at both standard and excessive levels. High-risk merchants are automatically classified as ‘excessive,’ with higher fines and fees.
What merchants can do to protect themselves from fraud?
It is critical to prevent chargeback abuse and fraud by providing an excellent customer experience and authenticating users. Unfortunately, some friction in the customer experience is required to discourage fraud. However, excessive friction repels legitimate users.
Merchants must strike a balance between authentication and customer experience, distinguishing between negative and positive friction points.
Positive points of friction include:
- requiring gamblers to verify their funds before depositing
- When adding a new card, the CVV is verified.
- New accounts must have unique and complex passwords.
- Backend fraud tools such as fraud engine scoring, IP verification, and geolocation are used.
- Verifying age and excluding underage users
Why Processors Suffer To Maintain Low Chargeback Ratios.
When it comes to excessive chargebacks, processors must either accept them or leave them. Merchant account providers do not want to be held liable for funds that casinos and online gaming companies are unable to cover.
Excessive chargebacks may also harm International credit card processing relationships with their sponsor banks and credit card brands, such as Visa or American Express. Credit card processors that exist to process purchases for businesses with high chargeback ratios can be fined by credit organizations.
Any sales that credit card processors make from the casino and online gaming merchant accounts are insufficient to put their relationships at risk or expose them to high fines.
Methods for lowering chargeback ratios
Chargebacks are costly. Businesses are gambling with their casino and online gaming merchant accounts if they do not implement chargeback prevention measures.
Credit card processors can close merchant accounts for businesses with chargeback ratios greater than 3%. Once they have been closed by processors in the past, it is extremely difficult for a merchant to obtain approval for another time.
Merchants must ensure that they are using secure channels to avoid customer abuse. Every transaction should have its details recorded, saved, and easily retrievable when needed. In the event of a dispute, security measures should take care to ensure that the exact date and time of the transaction, as well as the IP address of the PC from which the purchase was made.
Aside from that, sending an automated email receipt after a transaction will complete and/or conducting a customer satisfaction survey are both smart ways to avoid chargebacks. Allowing customers to understand that merchants want them to be happy with their purchases can mean a lot to them and provides another opportunity to remind customers of purchases. It is a good way to bring them to a site to make another purchase in the case of online gambling or gaming.
Excessive chargebacks are frequently caused by poor customer service, a lack of transparency and communication, and a flawed business model. Making full refunds, communicating with customers, and having a skilled customer service team are all effective ways to keep chargeback ratios under 2% and a merchant running smoothly.
A simple method for reducing chargeback ratios by 25%
Chargebacks, whether won or lost, hurt merchants. As a result, businesses that actively work to eliminate chargebacks set themselves up for failure and jeopardize their ability to conduct business. Merchants whose ratios exceed 2% may have their casino and online gaming merchant accounts terminated by processors.
How PayCly can help you get Merchant Account for Online Casino?
Stop playing the traditional game with banks and merchant providers. Start with PayCly merchant account. We are capable of recommending casino merchant account setup and gaming. This undervalues the importance of having a high-volume merchant account set up and ready for your gaming business.
Apply today, and we could have your casino and online gaming merchant account up and running in as little as 24 hours, with only a few restrictions.
In as little as 48 hours, you can have your casino or gaming merchant account up and running.
Gambling may have high risk, and high reward characteristics, but given the nature of this industry, banks are wary. If your casino and gambling business can maintain a chargeback rate of less than 2%, PayCly can provide you with a merchant account that can be tailored to your high ticket or high volume requirements. Allow the good times to come your way and apply today; we will set up your account within 72 hours.