The Challenges of Getting a Casino Merchant Account

Feb 07, 2018

The casino industry is fast paced and extremely competitive and yields no signs of coming to a halt. You have created that functions at an optimal level and offers games and betting options that attract players but still finds itself in trouble. The key to keeping a site competitive and growing is to enlist a payment processor that can offer a variety of payment solutions, including accepting and processing credit payments, that provide the best experiences for players.

Banks and payment processors steer clear from gambling businesses that seek casino merchant accounts due to conflicting laws and their reputations for high chargebacks from fraud and player remorse. From a payment processing standpoint, casinos are considered high risk because they face unique logistical and legal obstacles. These challenges vary from country to country and from state to state in the United States.

Despite these challenges, you can get a casino merchant account, which is crucial for casinos that do most of their business online and through mobile apps. If you don’t have a casino merchant account, you can’t accept and process credit card payments.

Though getting an account may not be very easy, it can be achieved if you know what to expect and plan for it.

Unclear and varying laws increase risk

The casino industry falls into an area of legal ambiguity because whether online gambling is legal depends on where you live and play. 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. Furthermore, the law 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.

New Jersey, Nevada, Delaware, and Pennsylvania have approved some form on online gambling. A number of other states, including California, have introduced bills legalizing casinos and online gambling.

In addition to there being no specific law for all states and countries, merchant account providers also consider casinos risky due to the potential of underage gamblers and out-of-state users.

Overcoming other challenges

Casinos and online gambling businesses have always been more vulnerable to fraud than other industries. Whenever a business generates mostly non-face-to-face transactions, such as purchases made via the web and mobile apps, there is a greater chance of fraud. When it’s time to apply to a merchant account provider, make sure the account is PCI-compliant. This assists you in fighting fraud and protects your customers’ sensitive information.

Casinos also are attractive to cybercriminals due to the volume of daily transactions, as well having a large number of high-ticket transactions. When applying for a casino merchant account, it is important to be up front about your potential monthly volumes and the average ticket amounts. This will prevent a merchant account provider from later adjusting policies based on other outside restrictions.

If playing at your casino requires a membership, be sure players know the terms and conditions of signing up. If becoming a member of your site automatically enrolls players in recurring billing, make sure it is clear to players. Customers who don’t understand this many initiate chargebacks. To prevent this, include your policies in any transaction correspondences and clearly display them on your site.

Finally, prevent fraud and friendly chargebacks by using secure channels. Record and archive details of each transaction. 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. This information can be used to fight chargebacks.

A quicker route to a casino merchant account in sight

Before gambling was legal anywhere, casino and gaming sites were familiar with merchant category code (MCC) 7995. Without even investigating, a bank would deny any transaction coded 7995. Since several states, including, have legalized some forms of online gambling, credit card associations created three new MCCs to separate the licensed from the unlicensed casinos.

In 2015, MasterCard, Visa, and American Express introduced these codes:

  • MCC 7800 – Government-run online lotteries
  • MCC 7801 – Regulated online casinos
  • MCC 7802 – Regulated events for online horse and dog racing

The new MCCs validate licensed online casinos in the eyes of merchant service providers, which hopefully make it easier to obtain merchant accounts. As more states legalize online gambling, merchant account providers will realize they need to adapt. As more and more of their cardholders are exposed to legal online gambling options, the extra caution being shown by banks and processors will dwindle because it likely will have a greater impact on their bottom lines. The solutions to payment processing issues for casinos may be slower than you prefer but the newer MCCs should provide some reassurance to merchant account providers.

Casino merchant accounts are necessary

To succeed, legal online casinos need to be able to earn money by gaining players’ trust by reliably charging their cards and funding their accounts. Online casinos need to meet their customers’ needs while complying with all laws and regulations. Your priority must be to make money and support growth. Accepting and processing credit cards payments responsibly is the way to achieve to both.

Digital casinos must also navigate meeting customer needs with operating inside compliance of industry regulations and laws. Being able to make money and support growth is your main priority and to do this, you rely on credit card payments from customers.

In conclusion

Don’t underestimate the convenience of offering customers the option to pay with credit cards. It can go a long way toward helping to establish your company’s reputation and credibility. If you have had trouble obtaining a merchant account in the past or you would like to try to lower your rates, consider applying for a casino merchant account with (EMB). EMB is a high-risk merchant account provider that offers complete merchant account services, including a variety of payment processing solutions. 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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