Stack the Odds of Getting a Gambling Merchant Account

Jan 31, 2018

When Pennsylvania expanded its gaming legislation in October 2017 to permit online betting at airports and truck stops, it became the fifth state to do so in the nation. New Jersey, Nevada, Pennsylvania, and Delaware have legalized some forms of online gambling.

Recognizing how much money web-based betting and gaming can bring into their respective states has left many states warming up to legalize online gambling. Additionally, there are bills in California, Illinois, and Massachusetts that would permit some type of online gambling if they were passed.

Despite revenue potential and a growing market for these businesses, gambling merchants have a very difficult time getting the merchant services they need to operate. Due to the unclear and confusing laws on state and federal levels, the industry’s background, a regular high volume of transactions, and a history of excessive chargebacks, traditional financial institutions consider online gambling a high-risk industry. This makes it difficult to get a merchant account. With a merchant account, a business cannot accept credit and debit cards as payments for transactions. Obviously, this is a business buster for any merchant that exclusively or depends mostly on mobile or web-based customers and transactions. The risk is raised on gambling, gaming and fantasy sports businesses because the merchant account provider takes on the potential risk of paying any refunds, fees, or fines merchants are unable to pay due to going bankrupt or getting forced into closing.

Though getting a gambling merchant account is a challenge, it is not out of the question. Merchants need get their businesses in the best possible financial shape, be prepared for challenges, and do whatever they can to minimize chargebacks from real and friendly fraud.

Know the laws and comply with them

Gambling is such a risky online endeavor because the industry falls into an area of legal ambiguity. Though there are no federal laws on the books that prosecute online gamblers, the Unlawful Internet Gambling Enforcement Act of 2006 prevents people and entities from knowingly accepting any funds associated with a person engaging in illegal online gambling. This has no real consequence for a gambler, since the law states that a party (a merchant) cannot “accept” funds. However, the law further states that merchants are banned from legally accepting wire transfers. This is why online gambling merchants must be able to accept and process credit card payments.

As already mentioned, the laws vary at the state level. Though some states have legalized online gambling, others, like Louisiana and Iowa, have banned it. Iowa has the strictest online gambling laws on the books. Depending on the amounts of bets exchanging hands, a violator can be charged with a felony.

5 ways to get and keep a gambling merchant account

Some of the best ways to get a merchant account and keep it are very simple. Put measures in place to prevent friendly and valid chargebacks and fraud due to stolen credit cards.

1.    Use Secure Channels and Save Everything – Prevent and fight friendly fraud by using secure channels. Record and archive details of every transaction and make sure the data is easily accessible. Take the necessary security measures to ensure that the exact date and time of each transaction, as well as the IP address of the computer from which the bet was made, is known and recorded.

2.    Offer a Variety of Games and Betting Options – The more types of games you offer, the greater appeal your site will have to players. Also, offering a range of betting options opens the floor to new and more advanced players.

3.    Use Notifications – Integrate an automated system into your site to detect and take appropriate actions when players’ betting behavior changes. If something looks questionable, go with your gut and treat it that way. If a player begins betting much large amounts than usual or taking odds against himself, be cautious. It may be a sign of fraud. Reach out to the customer to be safe. To ensure there are not hurt feelings, let the player know you were just safeguarding them from a fraudulent transaction.

4.    Help Players – The difference between a gambling businesses doing well and doing great is a little support. In addition to offering a number of betting options, offers a guide or strategies to new players. Also, this is a good way to reduce potential chargebacks. When players have a clear understanding of game, they may be less likely to initiate a charge due to a gambling loss.

5.    Be Cautious About Sign-Up Bonuses – Offering bonuses when new players sign up for a gambling website is a great way to gain new customers but it can be a problem. If becoming a member of your site automatically enrolls players in recurring billing, make sure it is clear to players. If players are unaware that accepting bonuses signs them up for memberships with monthly or quarterly fees, you could end up with a lot of unhappy customers. The result could be excessive chargebacks due to customers not knowing or forgetting they would be billed on a regular basis. To reduce potential chargebacks, merchants must be clear about their terms and conditions. Policies should be clearly displayed on their websites and included in any purchase emails.

Choosing an online gambling merchant account provider

As the tide continues to move into the direction of large-scale acceptance of online gambling, it will get easier to obtain an online gambling merchant account. Nevertheless, due to the factors working against online gambling businesses, anticipate the merchant account you do receive likely with have you paying higher rates and fees for processing.

When the time comes to select a merchant account provider, do your research, ask questions, and be choosy. Select one that offers complete services and a variety of payment processing options. The one you entered into a with contract should provide a seamless web-based transaction process for customers and provide meaningful customer support. Also, an ideal online gambling merchant account provider also will offer advanced risk management and fraud detection tools.

Choosing the best provider with the most payment solutions will improve the overall experience for players and bring additional benefits to your business. That’s a choice worth betting on.

Final thoughts (EMB) is a high-risk merchant account provider that understands gambling businesses and the unique obstacles they face. If you want a trusted, responsible credit card processor with complete merchant account services, contact us today to find out more.

Let us help you get a high risk merchant account today!

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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