The Playbook for Getting a Fantasy Merchant Account

Dec 27, 2018

In addition to its popularity, fantasy sports fits right into the world’s growing affinity toward a cashless society. Fantasy sports players use smartphones and other mobile devices to draft teams, change lineups, research players, and check on player injuries.

For fantasy sports operations to thrive, they must be able to accept and process credit card transactions. To do this, they need a fantasy merchant account.

Despite growing interest and its money-making potential, banks would rather pass then go in and tackle the nuances that come with approving a fantasy merchant account. The potential legalities, the nature of the business, and its reputation for excessive chargebacks turn traditional lenders off. Therefore, the optimal way for merchants to stay in the game is to work with alternative lender.

Sometimes, the Laws Worry Lenders and Processors

Fantasy sports is one of those things that, depending on who you talk to, you will get an answer as to what it is. Some call it gambling and others refer to it as gaming, so what does that matter? Well, it’s the federal and state laws. Not only are they not synonymous, oftentimes there is some intentional legal ambiguity, which is really a way for lawmakers to leave the final decisions up to the courts.

So, let’s look at the federal law, Unlawful Internet Gambling Enforcement Act of 2006, which bans games of chance, like online poker. For fantasy sports players, the impact from this law is likely minimal. Though people win and lose money betting on virtual teams, fantasy sports was excluded from the federal law because it was considered a game of skill instead of a game of chance. It was interpreted this way because fantasy sports because virtual fantasy players need the skill of knowing players’ performances to play and win games.

What the law really does is prevent a person or entity from “knowingly” accept money associated with a person participating in illegal online gambling. This has no real consequence for an actual gambler since the law focuses on a party not accepting funds. Basically, this means gaming merchants can’t legally accept wire transfers.

Though the federal lays things out fairly clearly, it is important to be aware of how your state laws few these type of entities.

Be Aware of Chargebacks and How to Prevent Them

Chargebacks, which is whenever a credit card provider forces a merchant to refund a disputed or fraudulent transaction, can lead to losing your business. Too many chargebacks is a sign that your business is inherently flawed; its either a target for friendly fraud or you are taking enough security measures to catch customers who make unauthorized transactions.

The reason really does not matter to merchant service providers. They just know that when rates get too high, it’s a bad sign that they are going to left holding the bag for fines, fees, and refunds you cannot pay.

Develop a Plan to Prevent and Fight Chargebacks

Most business conducted by fantasy sports merchants are done electronically, which make them more vulnerable to fraud. To prevent this, merchants must use secure channels and keep records of all transactions. Purchases should be recorded, archived, and easily retrievable. Information, like the exact dates and times of transactions, and the IP addresses of the computer the purchase originated, should be kept so that it can be used to fight a dispute if one arises.

What’s Needed to Get a Fantasy Merchant Account

Like any high risk merchant account, a fantasy merchant account will cost more than a lower risk accounts, and that holds true for gambling accounts. The best way to find out what you will pay is to request a personalized quote.

When discuss accounts with a merchant service provider, be prepared to provide information about your business, the ways you accept payments, your average transaction size, and your project monthly volume in card payments. Also, expect to offer supporting documents, such as financial and bank statements.

In Conclusion

Though getting a fantasy merchant account may not be simple, it is possible if you ask questions, know what to look for, and how to proceed.

At EMB, we have made getting a fantasy merchant account quick and simple. EMB works with new and existing businesses, high risk merchants, merchants that have been rejected or terminated by other processors, as well as those with bad credit, no credit, or a history of excessive chargebacks.

Begin accepting and processing debit and credit transactions more efficiently today. Apply today by submitting our easy online application.

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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