Choosing the best high risk payment processing solution is not just crucial, but is imperative for high risk gaming merchants. Failure to do so could lead to serious business consequences, such as lost revenue and even closure.
The very nature of the online gaming industry, with high chargeback rates and constantly changing regulations, means that you need a high-risk payment processor that is specifically designed for online gaming merchants.
In fact, statistics show that up to 18% of e-commerce businesses fail due to payment processing issues. As such, igaming merchants cannot afford to be complacent when it comes to their payment gateway solutions.
In this comprehensive guide, we will explore everything there is to know about high risk payment processing and the best payment gateway solutions available for your online gaming business.
What is High Risk Payment Processing For Online Gaming Businesses?
High-risk payment processing refers to the handling of credit and debit card transactions along with other payment types for businesses that are deemed to be “high-risk” by traditional financial institutions. This designation can be based on a variety of factors, including the type of business, the level of fraud associated with the industry, reputational bias and the chargeback rate.
Online gaming includes a wide range of verticals, including sports betting, fantasy sports, online casinos, and more. These businesses typically require a payment processing solution that is tailored to their specific needs. For example, sports betting sites may require the ability to process high volumes of transactions quickly and efficiently, while online casinos may need to support a wide range of payment methods and currencies.
Overall, online gaming is a lucrative industry which according to a report by Zion Market Research, was valued at $45.8 billion in 2017 and is expected to reach $94.4 billion by 2024, growing at a CAGR of 10.9% between 2018 and 2024.
However, with this growth comes an increase in potential chargebacks and fraudulent activities. For this reason, it is crucial that online gaming businesses seek out a high risk payment processor and acquire an online gaming merchant account to ensure secure transactions and mitigate any potential financial risks.
Traditional payment processors like Shopify Payments may not provide adequate protection for businesses in the high-risk category.
Why do Online Gaming Businesses Need High Risk Payment Processors?
If you own or manage an online gaming business, you would probably operate in a unique regulatory landscape. This includes fast adoption of cryptocurrencies as a popular payment option for many online gaming businesses as it offers anonymity and quick transactions. But cryptocurrencies are also associated with high-risk and require a thorough understanding of regulations and compliance requirements. An experienced high-risk payment processor can ensure that your online gaming business complies with regulations and is able to safely and efficiently accept cryptocurrencies.
In addition to cryptocurrencies, online gaming businesses also need to accept other forms of card not present payments such as credit cards, debit cards, and e-wallets. These payment methods are also associated with high risk due to the potential for chargebacks and fraudulent transactions. Best high-risk payment providers can equip businesses with specialized fraud detection and prevention tools to mitigate all these payment risks.
A high risk payment processor is also an important partner to get an online gaming merchant account, which is essential for correctly identifying your business and avoiding being deplatformed. And even though the paperwork required to obtain an online gaming merchant account may seem overwhelming, the benefits are well worth it. Look for like-minded payment partners like TickleCharge who promise 100% streamlined account set-up procedure for all high-risk clients.
Understanding High-Risk Merchant Processing within iGaming
iGaming includes various business models, such as sports betting, fantasy sports, online casinos, and more. Each of these business models has its own set of unique risks, making them fall under the high-risk category. For instance, online casinos face higher risk due to the potential for money laundering and fraud, while sports betting faces higher risk due to the potential for match-fixing and underage gambling.
High risk merchant processing is a specialized service that caters to businesses that are considered high risk.
A 2021 report from Forter found that online gaming has a higher chargeback rate than other industries, at a rate of 1.4%, compared to the overall rate of 0.07%.
This means that for every 100 transactions, online gaming businesses have a higher likelihood of 1.4 transactions resulting in a chargeback, which can be financially damaging for the business.
In response to these risks, traditional financial institutions have created high risk merchant processing to cater to these businesses. This includes offering specialized payment gateway solutions that can help reduce chargebacks and fraud, as well as providing additional services such as fraud detection and prevention, chargeback management, and dispute resolution. High-risk payment solution providers understand the unique challenges that high risk businesses face, and they provide tailored solutions to mitigate risk and protect the business’s financial interests.
High risk merchant processors typically charge higher fees than traditional processors due to the higher risk involved. However, the benefits of using a high risk merchant processor far outweigh the costs in terms of reduced chargebacks, fraud prevention, and dispute resolution.
High Risk Payment Processor vs. Traditional Payment Processor
Traditional payment processors are more cautious when it comes to accepting high risk businesses due to the potential for financial losses and all the extra operational work. For instance, to process payments for high risk businesses, payment processors must first conduct a thorough risk assessment of the business and its industry. This includes analyzing factors such as the business’s revenue, chargeback rates, and customer demographics. Based on this assessment, the payment processor may require the business to submit additional documentation and comply with stricter regulations than other businesses.
High risk payment processors, on the other hand, specialize in working with high risk businesses and have developed unique streamlined processes to efficiently deal with each high-risk industry’s unique challenges.
A qualified high-risk payment processor will underwrite the gaming merchant account and approve transactions on behalf of the business. The high-risk payment gateway provider, on the other hand, will securely transmit payment information from the merchant to the payment processor and then to the acquiring bank.
Factors to Consider When Choosing a High Risk Merchant Processor
When choosing a high risk merchant processor for your online gaming business, there are several factors to consider. These include:
You want to work with a high risk payment processor that has a good reputation in the industry. Look for companies with a proven track record of providing reliable and secure payment processing services to high risk businesses.
High risk merchant processors typically charge higher fees than traditional processors. However, you should compare fees from different companies and choose one that offers competitive rates and transparent pricing.
You need a payment processor that offers excellent customer support, especially since the online gaming industry operates 24/7. Look for companies that provide 24/7 customer support and have a dedicated team of experts who can assist you with any issues you may encounter.
Security is critical when it comes to payment processing. You want to work with a high risk payment processor that uses the latest security protocols and technologies to protect your business and your customers’ sensitive information.
Top Payment Gateway Solutions in Market Today
There are several payment gateway solutions available for online businesses but they may or may not choose to work with different kinds of online gaming businesses. Here are the top ones:
TickleCharge (developed by TickleLife) is a leading payment gateway solution for high-risk online gaming merchants. TickleCharge’s team of experts has over two decades of experience in the high-risk space, offering founder-led 24×7 customer service and tech support at every step. Additionally, TickleCharge provides regular updates on industry developments, ensuring its customers stay up-to-date with the latest trends and regulations.
TickleCharge also boasts advanced features such as tokenization, which enhances security and reduces the risk of fraudulent transactions. The payment solution provider also offers the sharpest transaction rates, thanks to its network of high-risk payment processors, providing cost competitiveness that benefits merchants.
Stripe is a popular payment gateway solution that provides secure and reliable payment processing services for high risk businesses. It offers advanced fraud detection and prevention tools, chargeback management, and dispute resolution services. Stripe also offers competitive pricing and excellent customer support.
PayPal is a well-known payment gateway solution that is widely used by online businesses around the world. It offers secure payment processing, fraud detection and prevention, and dispute resolution services. PayPal also has competitive pricing and excellent customer support.
Authorize.net is a payment gateway solution that provides reliable payment processing services for high risk businesses. It offers advanced fraud detection and prevention tools, chargeback management, and dispute resolution services. Authorize.net also provides excellent customer support.
Skrill is a payment gateway solution that specializes in providing payment processing services for high risk businesses in the online gaming industry. It offers advanced fraud detection and prevention tools, chargeback management, and dispute resolution services. Skrill also offers competitive pricing and excellent customer support.
Tips for Choosing the Best High Risk Payment Processor for Your Online Gaming Business
Here are some tips to help you choose the best high risk payment processor for your online gaming business:
Do your research and compare payment processors based on their reputation, fees, customer support, and security. Look for companies that specialize in working with high risk businesses in the online gaming industry.
Read reviews from other online gaming businesses to see what they have to say about different payment processors. Look for companies with positive reviews and a proven track record of providing reliable payment processing services.
Consider Customer Support
Choose a payment processor that offers 24/7 customer support and has a dedicated team of experts who can assist you with any issues you may encounter.
Look for Advanced Fraud Detection and Prevention Tools
Choose a payment processor that offers advanced fraud detection and prevention tools to reduce the risk of chargebacks and fraudulent activities.
Choosing a high risk payment processor is essential for the success of your online gaming business. High risk merchant processors offer tailored solutions to mitigate risk and protect your business’s financial interests.
When choosing a payment processor, consider factors such as reputation, fees, customer support, and security. While all top payment gateway solutions such as Stripe, PayPal, Authorize.net, and Skrill offer advanced fraud detection and prevention tools, chargeback management, and dispute resolution services, they aren’t the best in the ‘high-risk’ space. Most of these payment processors have clear guidelines of businesses they accept and businesses are required to adhere to these guidelines at all times. We strongly recommend that you do a thorough research before picking the best high risk payment processor for your online gaming business’s specific needs.
If you are an iGaming business owner, or sports betting software developer, or even a casino business consultant aiming to grow revenues, TickleCharge is the complete solution which can assist you in mastering high-risk payment processing.