If you run a gaming business, you probably already know that the gaming industry is by banks considered to be high-risk.
This creates a catch-22 situation for businesses that want to get into online gaming – you need an account with an online gaming merchant account to be legitimate business, but you can’t get one from your financial institution.
Read to find out what the issue is, and how you can solve it.
All gaming in general is considered a high risk business activity, but online gaming adds even more risk into the mix.
The original risk factors are that gaming and gambling are in of themselves financially risky activities for the customers, and a portion of such risk is always carried by the business that provides said activities.
Further, gambling has been used by organized crime for money laundering, which also adds to its high risk profile.
And for those situations where the gaming company’s customer does hit the jackpot, the business must have sufficient funds to cover any and all winnings.
While improbable, this can in the worst case scenario lead to a cash shortage, which again is a more high risk situation than what a regular business will typically face.
So even without trying to get an online gaming merchant account, running a gaming business is engaging in a high risk enterprise, which makes it difficult to get many services from a regular bank.
But online gaming also adds chargebacks to the list of risk factors. Chargebacks, or reverse charges, happen when a customer claims to their bank that a particular transaction was fraudulent – that they didn’t approve it, or that they didn’t receive the product that they bought, or that they were somehow scammed.
This leads the bank to reverse this charge to get the money back to the consumer, and it casts suspicion on your business. This way, even though you run a completely on-the-books, legal, and customer-friendly operation, you can still face suspicion because of what you customers choose to do.
For all the reasons mentioned above, when you go to a regular bank because you want to start processing online payments in your gaming business, the answer is almost certainly going to be “no”.
Same will happen if you try your luck with a mainstream electronic wallet service like CashApp. You may work around that by using a personal account or not declaring the real nature of your business, but sooner or later the account will be shut down and your revenue will be cut off. Worse yet, they may even freeze your funds for weeks, making it even harder for your gaming business to survive.
An online gaming merchant account from a high risk merchant account provider can give you a way to process online payments without a bank or an electronic wallet. It’s a legitimate service than can be used by both physical and online businesses to process all credit, debit, and prepaid card payments.
A high risk merchant account provider will not care about your chargebacks, because that risk is already built into their service. It doesn’t necessarily mean that chargebacks don’t cost anything, but it does mean they won’t get your account shut down, and the fee is going to be lower than what a bank charges for handling chargebacks.
At 5 Star Processing, we’re experts in handling merchant accounts for high risk businesses, like online gaming establishments. Whether it’s betting, casino, or some other games, we can help you process your payments so that you can focus on growing your business.
To get more information or to get started, call us today on (888) 253 9692 or send an email to our team at [email protected].