Offering your customers a variety of trusted and secure banking options is important. This is why it is imperative that you have quality payment processing as part of your online casino operations. You’ll discover that there are different aspects to gambling payment processing and Top Casino Solutions will help walk you through the fundamentals so that you have a better understanding of what these aspects are and why they matter.
What is casino payment processing?
Casino payment processing is the ability to securely process monetary transactions at your online casino business, particularly those payments related to credit and debit cards.
There are three main aspects of a payment processing system. These include:
- Payment processor
- Payment gateway
- Merchant account
What is a payment processor?
For most casino businesses, payment processing is carried out by a payment processor. This is a financial institution that works in the background to provide all the payment processing solutions used by the online merchant (casino). These payment processor companies typically have partnerships with other companies that directly deal with the casinos, such as the gambling software development companies TCS reviews.
The payment processor links to both the online gambling merchant (your) account and the payment gateway. The payment processor quickly passes information back and forth between the casino and the payment gateway, keeping this information secure and transferring it near instantaneous to the end user.
More to the point, the payment processor:
- Takes the information about the customer’s transaction from the payment gateway
- Validates this information
- Executes the information
- Deposits the funds into the merchant account
- Notifies the payment gateway if the transaction was successful
What is a payment gateway?
A payment gateway acts as the middleman between your casino and the payment processor that receives payment from your customer. The payment gateway sends the customer’s payment data (e.g. credit card number, etc.) securely to the payment processor.
The payment gateway is responsible for:
- Transaction security
- SSL (secure socket layer) data encryption
- Determining if the payment is legitimate
- Working 24/7, processing payments at any hour of the day or night
- Supporting a variety of payment methods
- Working with multiple currencies
- Providing business insights and reports in real-time (e.g. you can see how effective a promotion was, etc.)
What is a merchant account?
merchant account or merchant IDs (MIDs) is a special type of bank account that
allows your business to accept payment by credit cards and debit cards that
come from a payment processor. Once the payment processor clears the transaction,
the corresponding funds are deposited into the merchant account. From this
point, the funds can be moved to the primary bank account of your business.
It is not easy to get approval for a merchant account with your bank for your casino company. Online gambling isn’t just any ordinary ecommerce business. In fact, many online payment processing companies and banks steer clear of gambling operations and refuse to support these businesses.
Why? Online gambling is seen as a high risk operation due to the potential for:
- Illegal operation
- Potential legal issues
- Risk of gambling addiction
- High chargeback ratio
Payment processors are responsible for ensuring that they do not provide merchant services to companies that offer illegal services or where there is an increased chance of legal issues. Even though a casino may be fully licensed and running a legitimate operation, many banks and processors continue to steer clear of gambling enterprises.
You will require a high-risk online gambling merchant account
As an operator of gambling services, you will require a high-risk online gambling merchant account. Obtaining a merchant account on your own can be tricky, as you will need to research your local market to find out what is available to you. There is also plenty of paperwork involved, and requirements for approval can change drastically from one region to the next.
For this reason, it is the often the preference of most casino operators to choose a payment processor that is familiar with the online gambling industry to handle all the payment processing work for them.
The only major downside when choosing this route is that there are often additional fees for this service, such as when you attempt to withdraw you funds from the processor to your business account. That said, the major upside is that the experienced third-party payment processor provider takes care of the headache of you having to deal directly with banks and other financial institutions.
Why is Payment Processing so Important?
Payment processing solutions for an online casino are important because they allow you to:
- Accept and process player deposits and withdrawals
- Be able to offer different payment methods (e.g. credit/debit cards, eWallets, prepaid cards, etc.)
- The ability to offer local payments
- Prevent fraud
- Prevent chargebacks
- Integrate with the biggest gambling platforms
Accepting conventional card payments (e.g. Visa, Mastercard, etc.) and other types of payments at your online casino is important for increasing both market share and users.
Therefore, finding an online gambling payment processing company is vital for making sure the real-time process of accepting debit and credit cards from players around the world is a smooth and secure one that protects your customers from fraud as well as your business from chargebacks and other legal issues.
Additionally, a payment processor is not only in charge of your casino operation’s finance, it is also essential for ensuring your business has a decent conversion rate.
The Importance of Anti-Fraud Measures and Chargeback Prevention
Every online business can be a victim of cybercrime, and online casinos are no exception.
protect your operation from fraud, it is vital to have the necessary
cybersecurity in place to protect your online customers’ sensitive personal and
financial information from being stolen when they sign up for an account and
According to a report from ThreatMetrix Gaming and Gamblng Cybercrime, one in every 20 new gambling accounts created online are fraudulent, with bot attacks responsible for almost half of daily gambling traffic during peak periods.
riskiest time when a cyberattack may occur is during the registration and
creation of an account. For this reason, a payment processor needs to offer the
best protection to safeguard both your business and customers from fraud, right
at the start. It is never easy dealing with fraud, so it is important to do
everything to prevent it from occurring in the first place.
This is why putting your trust in a provider who understands the specific requirements of iGaming is essential. The provider needs to implement anti-fraud measures that can accurately distinguish legitimate customers from fraudsters. This is important because while you want to protect your business and your customers, at the same time, you don’t want your anti-fraud filters so tight that it causes a decreased payments’ acceptance rate or lower conversion rate, as this will annoy customers and drive them away.
stake gambling is a breeding ground for what is known as “chargeback fraud” or
“friendly fraud.” This type of fraud occurs when a legitimate player engages in
irresponsible gambling behavior and becomes frustrated after suffering large
losses and chooses to contact their credit card issuer to deny that they were
the ones who made the charge at the casino (chargeback).
Usually, in these cases, the online gambling operator will almost always lose as the law is typically on the side of the consumer in cases of online spending. To make matters worse, once the friendly fraudster realizes that they can get away with it, they are two times as likely to do it again.
It is the guilt a player has over their gambling losses combined with how easy it is from them to “fix” their mistake afterword by committing friendly fraud, that results in the online gambling industry having such a high chargeback risk.
Lacking the ability to identify this fraud and having issues disputing the chargeback is what makes it difficult for most online gambling merchants to protect themselves from friendly fraud. However, certain online casino software providers have payment solutions with services that help to increase a company’s chance of identifying this type of fraud and winning the dispute.
Different Payment Processing Solutions
payment service provider (PSP) will offer you a variety of payment methods for
both large and small transactions. Typically, these are well-known and trusted
payment solutions. The more variety you can offer, the greater number of
customers you can attract.
The most common online casino payment methods include:
- Credit cards – A payment method that involves a consumer borrowing money against their line of credit (e.g. Visa, Mastercard, etc.).
- Debit cards – A type of payment that draws money directly from the consumer’s chequing account. Usually when used online, debit cards function like credit cards except that the money is debited from the consumer’s bank account and not a line of credit (e.g.Visa Debit, Debit Mastercard, Maestro, etc.).
- eWallets – Also known as a digital wallet or electronic wallet, an eWallet is a type of digital payment service that allows the user to make electronic purchases online. For a user to be able to make payments, usually the eWallet must be linked with the individuals bank account (e.g. PayPal, Skrill, Neteller, etc.).
- Bank transfer – This is the electronic transferring of funds to and from a bank account. For this type of transfer to work, the person making the transaction needs to know the routing and account number of the recipient. It is known as a Wire Transfer, Bank Transfer or Credit Transfer.
- Prepaid cards – With this type of payment method, players do not require a bank account or credit card, which means they do not need to provide their personal financial information when setting up their account and making a deposit. They simply purchase a card from a participating retailer or use the service provided by a financial institution, load funds onto the card, and use the voucher number of the card to deposit funds from the card into their account (e.g. Paysafecard, ecoCard, etc.).
- Mobile payments – Some companies offer mobile-based financial services. Some of these platforms allow for consumers to make transactions using their mobile phone number, with the purchase billed to their mobile network operator bill (e.g. Boku), while others function as a mobile wallet (e.g. MuchBetter).
- Cryptocurrency – A payment method that allows consumers to use their digital, decentralized currency (cryptocurrency) to make payments (e.g. Bitcoin, Cryptopay, etc.).
Most popular payment methods in online gambling
There are numerous payment options. The following are some of the most popular:
- Visa/Mastercard – These two companies are among the leading and most widely accepted credit cards in the world. Credit card transactions are convenient and instant. They are an ideal payment method for players when no local payment options are available. Both Visa and Mastercard have debit options as well.
- PayPal – One of the most recognized eWallets in the world, PayPal lets users send and receive money digitally. PayPal is widely known of its security, quick funds transfers, flexibility and for being available for online and mobile transactions.
- Neteller – This eWallet is well known in the online gambling industry and is a preferred choice among many players. It is a quick, easy and secure way to move money online, making it simple for users to pay and play with ease.
- Skrill – Like Neteller, Skrill is another highly popular eWallet for gambling, and, as is the case with most of these digital wallet services, all a consumer requires to send money to anyone is provide their email address. Skrill is available in 40 currencies, it’s free to register an account and it takes only a matter of minutes to sign up and start using.
- ecoPayz – This eWallet is secure and lets consumers send and spend money in 45 different currencies. It’s also worth noting that ecoPayz is often an acceptable form of deposit that qualifies for welcome bonuses and other promotions. It is not uncommon for other popular eWallet providers, such as Skrill, Neteller and PayPal, to be excluded from claiming promotions.
- Trustly – Popular in European countries, Trustly lets users make payments directly from their bank account. Trustly provides its service through TransferWise and PayPal. It offers a fast, easy and encrypted connection for making money transfers via a bank account.
- Pay N Play – A service offered by Trustly, Pay N Play allows players to play their favourite games right away with one quick deposit through their online bank while the system collects the data that is available from the player’s bank account. This makes the registration process as simple as can be. TCS lets you know if Pay N Play is offered by the software companies we review.
- Paysafecard – Paysafecard is a prepaid payment method that allows users to purchase vouchers at participating retailers across the globe. They can then enter the prepaid voucher’s unique code online to make a deposit. Using a prepaid card/voucher is like paying with cash, there is no bank trail. It is often the preferred choice of players who do not want to use their credit card, or who would like greater anonymity or control how much they deposit.
- Bank Transfer/Wire Transfer – This secure payment option is an electronic funds transfer that digitally wires money from one bank account to another. While players can use Wire Transfer to make a deposit, this is also a common withdrawal option made available to those who make deposits using payment methods that do not have a withdrawal option (e.g. Paysafecard).
- MuchBetter – This is an app-based payment wallet that lets mobile users store, send and transfer money quickly and securely.
- Bitcoin – The most popular cryptocurrency, Bitcoin is becoming available at more and more online casinos. You can find out more information about Bitcoin casinos here.
How to Choose a Gambling Payment Service Provider
When it all comes down to it, as an online casino entrepreneur your options are:
- Obtain a high risk gambling merchant account on your own – To do this you will need to research your local market and seek approval from a bank.
- Purchase a white label casino solution – Find a white label casino provider and obtain this solution from them. With a white label casino, the payment solution you need is included and taken care of for you by the iGaming developer. Learn more about white label casinos here.
- Purchase a turnkey casino solution – Purchasing a turnkey casino solution offers greater flexibility compared to running a white label casino. Instead of having no choice over what payment methods you can offer, you have the option of selecting from the different payment processing services and features offered by the turnkey iGaming developer. Learn more about turnkey casinos here.
Ultimately, opting to use the casino payment solutions offered by the best online casino software developers is the most straightforward path. These companies understand the ins and outs and risks associated with payment processing in the online gambling industry.
Take EveryMatrix, for example. It has created MoneyMatrix, which is a technology processing platform designed to make payments simple while also taking care of a gambling operator’s payment processing and risk management needs. MoneyMatrix has over 180 payment options, covers over 100 countries, over 150 currencies, and offers anti-fraud and KYC verification solutions, encryption and tokenization service, 24/7 support, and more.
What are the Costs Associated with Payment Processing?
The fees associated with payment processing solutions for online gambling merchant accounts vary from one provider to the next. That said, generally speaking, your fees may be dependent on a number of factors such as:
- Transaction fees
- Merchant account registration fees
- Discount rates
- Monthly statement fees
- Chargeback fees
- Refund fees
- Rolling reserves
Payment Processing Tips to Keep in Mind
Here are a few things to remember when you are considering gambling payment processing solutions for your casino:
- You need a license to open a merchant account – If you don’t choose the white label casino route, you’ll need to independently obtain a license if you want to provide your players with popular payment methods. Banks are notoriously picky when it comes to partnering with gambling businesses and are much more likely to partner with a company that has been acknowledged by a respected regulatory body.
- Find out what anti-fraud measures are in place – Remember, it is far better to prevent fraud from happening than to deal with the aftermath should it occur. Find out what features the payment processor you select uses to protect your business and your customers right from the start.
- Discover how the processor protects you against chargeback fraud – Choose a company that is focused on enhancing your chargeback dispute win rate and that boosts your ability to identify friendly fraud.
- Only do business with a transparent company you trust – Don’t obtain casino payment solutions from just any company. Make sure that the provider of these solutions has experience with payments in the iGaming industry and understands all the risks involved. Additionally, make certain that they are partnered with a number of trusted payment providers, follow strict security and encryption protocols, and can operate in a wide range of countries and currencies.
Payment Processing – Final Thoughts
Finding the ideal online gambling payment service provider is vital if you want to ensure a smooth, secure and fraud-free deposit and withdrawal process for your players as well as protect your business from fraudulent chargebacks.
The more banking methods that you can make available on your site, and the more diverse that you can make the payment options you offer your customers, the more users you are likely to draw to your site.
One of the easiest ways to gain access to an array of local and international payment processing solutions is to use the payment provider solutions that are offered by trusted online casino software platforms like those reviewed by TCS. Discover your options today!