Payment processing is one of the key aspects of an iGaming merchant. It needs to be a seamless process that allows gaming transactions to go through smoothly with no risk or delay.
Good, professional, and efficient payment processing helps to prove that a gaming merchant can be trusted. We’ll be looking at the best payment solutions for casinos, sports betting platforms, and other online gambling operators.
What is an iGaming merchant account?
An iGaming merchant account is a specialized financial account for online gaming operators. It allows them to process user payments and make secure payments to players who want to withdraw winnings. It makes the player experience meet the highest standards.
We can compare it to a standard merchant account by looking at the risk level of gaming. Retail operators typically use a merchant account in a low-risk setting. When we look at iGaming payments, the risk level is increased, so new payment solutions are needed.
There are several reasons for this. For example, this type of payment processing has to cope with the regulatory aspect of online gaming businesses. The regulatory control that this industry contains means that it can be classed as high-risk payment processing.
This type of gaming merchant account is used by any company that needs to process gaming payments. It means that it covers the likes of online casinos, sports betting sites, and esports betting platforms. These gaming and gambling sites typically need to deal with the volatility associated with a large volume of transfers.
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Why iGaming is considered high-risk
When we dig deeper into the payment processing approach, we can see some of the clear reasons why this industry is considered to be high risk in terms of the payment processing that is needed.
Chargeback rate. This industry has a particularly high chargeback rate. It can occur for various reasons, such as players who regret making a losing bet. Because a high level of credit card processing disputes can lead to an account being blocked, companies in the gaming industry are at risk.
Regulated industry. This type of company can’t follow the same rules and processes across the planet, since the online gaming rules are different in each country, region, or even state. It means that online gaming businesses need payment solutions that can be adapted to each market where they operate.
Licensing requirements. Each gambling jurisdiction has a set of rules for payment processing that need to be applied. It means that to operate there, a gaming merchant has to make sure that they can accept as many of the options as possible before applying for a license.
AML/KYC. Holding this kind of gaming merchant account goes hand in hand with carrying out know your customer (KYC) and anti-money laundering (AML). Online gaming businesses need to make sure that they correctly verify each customer’s identity according to the current legislation.
Cross-border payments. The international aspect of gaming payment processing is another factor to consider when opening an online casino merchant account. With a global reach, they need to accept payments in a variety of ways to stay ahead of their rivals without paying too much for high-risk merchant account pricing.
How iGaming merchant accounts work
What is a merchant account? It isn’t a typical business bank account where money sits still for long periods. As more customers join and start gambling, igaming platforms need to maintain a high level of control over funds entering and leaving accounts.
Holding funds
It is the most crucial aspect of gaming, as each licensing authority determines how payments must be held in the operator’s accounts. The most demanding authorities, such as the UK and Malta, require that player funds be held in a separate account apart from the company’s operating capital.
The reason for this is to ensure that their players’ money is always protected in a gambling merchant account, even if the business runs into financial issues. Other authorities are less stringent about managing casino or sports betting merchant account funds in separate accounts.
Settlement into business accounts
After funds have been cleared, they get moved into the corporate business account. Of course, the exact process required depends on the regulations that the gaming operator works with.
If they need to use a two-tier system, player deposits need to be settled into the account holding player funds.
EU compliance
To operate a gambling service in Europe, the business needs to comply with the current Payment Services Directive, PSD2. It means that all deposits and transactions need to meet a series of clear regulations.
The first of these rules is that SCA (Strong Customer Authentication) is needed. It means that all deposits in the gambling industry in Europe need to be made with multi-factor authentication to lower the risk of fraud or chargebacks. Other specific requirements are added to the gaming industry by certain European country regulators.
Open Banking
It has become an important part of the online iGaming business model. Open Banking helps us avoid some of the possible high-risk pitfalls, like stolen cards being used or fraudulent chargebacks being made.
As well as increasing security, it also helps in those cases where the regulator orders some sort of affordability check on the player’s financial details.
Currency support
The high risk and global nature of online gaming mean that payment solutions are needed in various currencies. The operator will have local IBANs in the different regions where they operate, allowing their players to make iGaming payments easily.
They need to decide whether to keep the money in the original currency or convert it into a more stable one to reduce volatility.
Benefits of a dedicated iGaming merchant account
There are several benefits to using a gaming merchant account for payment processing and account management.
Compliance-friendly. The best gaming merchant accounts are set up to meet the latest regulations. Providing transaction logs and tax reports is easy for online gaming companies when they have the right type of account.
Faster settlements. This business model works best when the company can push through iGaming payments speedily and without any fuss. When customers deposit funds, they want to see the choice of instant deposits, as well as manage speedy withdrawals.
EU legality. By choosing the right type of account, iGaming platforms are operated within the clear rules set down by the EU.
international payments. The iGaming business is built around being able to accept players from different countries. Therefore, the ability to accept payments from abroad is vital.
Multi-currency. Being able to seamlessly accept payments in different currencies from customers around the planet is a huge benefit and helps keep down fees and foreign exchange costs.
B2B transfers. Casinos, sportsbooks, and esports platforms need to pay other businesses. From game studios to platform providers, being able to carry out smooth transactions keeps the site running well.
In terms of Genome’s services, the following are all designed to benefit your gaming business and provide more solutions.
SEPA transfers. Fast, secure payments in the Eurozone help you operate without delays.
SEPA Instant Transfers. When you need instant transfers, this is the fastest and simplest way to ensure that your brand reputation for speed is maintained.
Open Banking. By using Open Banking APIs, you can accept payments and provide solutions for all your customers without the risk of chargebacks. All is done via our instant bank payments.
Dedicated IBANs. Sending and receiving payments is made easier when you have IBANs set up for each country or region you deal with.
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What do you need to apply for an iGaming merchant account?
To get started with these merchant account solutions, you need to provide the following details.
License proof. This type of service is only available to reputable, licensed gaming platforms.
Company incorporation. As part of the setup process, you need to verify that the gaming business is an active, registered legal entity.
Directors / KYC. This part of the registration process requires proof that the directors are managing the gaming company.
AML. This is where the latest anti-money laundering rules are covered, showing that you are a genuine gaming business.
Proof of business operations. Confirm your business history, revenue, and cash flow as part of the application process.
How to set up an iGaming merchant account
The process for setting up a Genome account for iGaming payments is short and simple.
Submit an online application. It is where you confirm the details of your business and how it operates.
Provide compliance documents. In this step, you need to provide all the documents that are required to open a merchant account.
Pass AML/KYC. Fill out the Merchant KYC questionnaire and provide the information needed to meet the current regulations.
Receive account approval. We will notify you when your account is set up and ready for you to use.
Start accepting payments. You can now receive iGaming payments from your clients in your merchant account and offer a professional payments service.
iGaming businesses that need merchant accounts
There’s a long list of different types of online gaming companies that need to accept iGaming payments and make instant payouts.
Online casinos
Sportsbooks
Virtual sports betting platforms
Esports betting sites
Poker networks
Lotteries
Crypto iGaming platforms
Why choose Genome for iGaming merchant accounts
There are many reasons for choosing a Genome business account to meet your needs in the gaming industry.
Genome is an EU-licensed EMI (electronic money institution) that accepts iGaming merchants. You can get started through a fast compliance onboarding process that lets you start using your account online.
Set up multiple merchant accounts with a dedicated IBAN account and accept SEPA international payments. Your customers can send payments that you access instantly, giving you a high degree of cash flow flexibility.
