The world of online gaming has only seen an upward surge in the past decade or so. The industry was worth $41.78bn by the end of 2016 and is projected to grow worldwide to $2.14 trillion by 2020. Better technology brought in better gaming experience which led to its increase in popularity. It’s no surprise then that by the end of 2017, the global gaming industry hit a record breaking $107bn.
Although it’s tremendous growth potential and ever-increasing revenue shows that the industry is lucrative, gaming merchants still struggle with financial institutions. Legalized gambling is increasing. Credit cards are used more than ever. But using credit cards to play online is still a massive obstacle faced by customers.
Even with players spending an increasing amount at online gaming as well as traditional casinos, gambling operators and online gaming merchants are worried that the continuous reluctance of banks to process gaming transactions can cause damage to the business.
“Of course it could impact the growth of this business — there’s no doubt about it,” says a senior executive who runs a casino business in the Atlantic City.
Why is it difficult for gaming merchants to accept credit cards?
In this digital era where each purchase, from groceries to gadgets, is made using credit cards, banks are cautious about allowing customers to ring up charges at casinos and online gaming sites.
Banks are especially wary of being caught in a tangle of legal issues with the government and being held liable for fuelling gambling addiction by offering gaming merchant account services. Although gambling has been legalized significantly since its old shady days, processors still view it as a tricky business.
Industry nature and history, Ambiguous laws, strict regulations, high ticket transactions, high chargeback ratios, refunds and frauds keep credit card processors and banks away from online gaming merchants.
The online gaming business falls in a legal grey area. Even with online business being an extremely profitable avenue of the gambling industry, the risks outweigh the profits for banks and credit card processors.
One of the major issues faced by gaming merchants is that it attracts high number of fraudulent transactions. Friendly frauds happen when customers dispute a transaction when they change their minds or refuse to pay because they lost.
Excessive chargebacks are risky for the business as well as the merchant account provider equally. Since the processors are liable to cover funds the gaming business is unable to, they are quick to shut down such gaming merchant accounts.
How to get Online Gaming Merchant Account Solutions?
If you insist on getting a regular gaming merchant account from a traditional bank or processor, then the odds are stacked against you. Instead of going the traditional route, online gaming merchants should look for High Risk Merchant Account solutions for their business.
Legal or illegal, majority of financial institutions refuse to offer gaming merchant account solutions to process gambling transactions.
Unless banks decide to bend their policies, online gaming merchants have to go with top rated high risk merchant account providers that offer customized gaming merchant account solutions that fit the demands and requirements of the industry and that of the merchant.