The global online gambling market is growing rapidly these days. However, finding a payment processing company for your online gambling business can still be a challenge. In today’s article, we are going to cover the most important things you need to know before opening a merchant account and choosing a payment provider.
What makes online gambling a high-risk industry?
Unfortunately, online gambling is a type of business that is not supported by most financial institutions, and there are several reasons for this:
- Risk of fraudulent activities (multiple account fraud, bonus abuse, gnoming and chip dumping are among the most popular ones).
- Frequent chargebacks (this often happens with online gambling, and sometimes a merchant can do almost nothing about it).
- Legal uncertainty (the business activities may be illegal or not well-regulated in some countries).
How online gambling is regulated in Europe
There is no global body that regulates the legality of online gambling operations, so legal statutes vary from country to country, resulting in an uneven oversight of the industry around the world. In some European countries, the following regulations are now in place:
- Online gambling in the UK is regulated by the Gambling Act which was enacted in 2005.
- The French government has passed the Gambling Act (law number 2010-476) which regulates online gambling.
- Germany signed the Interstate Treaty on Gambling in 2012 and amended it in 2020. However, the current state of online gambling in the country is uncertain and a new German Interstate Treaty on Gambling is proposed to come into force in 2021.
Although the status of online gambling in Europe is mostly uncertain or prohibited, some places can be referred to as online gambling jurisdictions (Alderney, Gibraltar, Isle of Man and Malta).
How to get a merchant account for online gambling
A merchant account is a bank account that allows the owner to accept various types of payment (mainly with credit or debit cards). You can find more general information about merchant accounts in high-risk industries here.
There are several advantages of using a merchant account in high-risk industries:
- Fraud prevention.
- Possibility of multi-currency transactions.
- Ability to accept all types of credit and debit cards.
- Customer support.
To open a merchant account, you need to fill out an application form. Then, if everything is in order, you will be asked to provide a document package. For example, the application form and complete list of documents required by PayFasto can be found here. After all the information and documents have been checked and approved, you will be provided with a merchant account.
Choosing a payment processing company
Before choosing a payment provider, we recommend that you consider factors such as price (but don’t forget that low price may not include hidden fees), if multiple payment options are offered and a high level of security. If your business is involved in a high-risk industry, it is critically important to choose a specialized provider that works with such industries and has specialists with extensive knowledge and experience to provide the best services for businesses in different circumstances.
Final thoughts
Although obtaining a merchant account may seem like a difficult process, there are a variety of companies in the market that are ready to help merchants operating in high-risk industries level up their businesses. If you still have doubts about which payment processing partner to choose, don’t hesitate to contact us!
