Credit Card Processing for Online Gaming Merchant Accounts
The online gaming industry has taken off massively especially in the North American and Asian regions. But running such a business may come at a high cost. The growing number of players of Massively Multiplayer Online Role-Playing Games (MMORPGs) has driven an estimated amount of $19.9 billion profit worldwide. This figure translates to the number of people who are willing to pay to play these types of games. However, banks and major financial institutions do not like to gamble on online gaming credit card processing services.
Types of Online Gaming Merchant Accounts
Among the many types of high-risk merchants are the following gaming accounts:
- Online Casino
- Mobile Gaming
- Massively Multiplayer Online Gaming
- In-Play Gambling
- Online Bingo
- Social Gaming
- Digital Slot Machines
- Online Table Games
- Fantasy Sports
A Standard Industrial Classification (SIC) code is set by major countries, including the United States, to identify the business purposes. For casino and online gaming merchants, these are the codes assigned:
- 713210 — Casinos
- 713290 — Other Gambling Industries
Why is a social gaming merchant account hard to come by?
Online gaming and gambling is considered to be high risk as it falls in the legal gray area following federal laws. While there are no exact prohibitions on online gambling, the US has the Unlawful Internet Gambling Enforcement Act of 2006 which states that no person — individual or business —may “knowingly accept payments in connection with the participation of another person in unlawful Internet gambling.”
This law penalizes only those who “accept” payments from online gamblers and not the gamblers themselves. Unfortunately, this makes it difficult for gaming merchants to process payments of said players. Although many gaming merchants are based offshore nonetheless, they are still bound by the state and federal laws. This is where credit card processors for gaming merchants come to the picture.
Another reason why an online gaming merchant account is considered high risk is that it can encounter a lot of friendly fraud complaints along the way. Friendly fraud are wrongful claims by account owners who change their mind and file a dispute to the transaction. Instances like this result in high chargeback claims which hurts merchants.
How to Get An Online Gaming Merchant Account
While it sounds difficult to get a gaming merchant account, it is still not impossible to do so. There are processors who still accommodate skill game credit card processing. What you need is a reliable processor who specializes and is capable of handling merchant account transactions. These are some of the things to look for in a gaming credit card processing company.
- Multi-Currency Processing - it is expected for gaming accounts to have transactions in different currencies. Thus, a credit card processor who can transact in multiple major currencies is crucial in the selection process. One factor to look into the conversion rate of said processor. How much is charged per transaction? Are there any other fees that are added on top of the conversion fee? Is the conversion rate higher or lower than the standard rate?
- Real-Time Processing - some processors cannot process transactions in real-time. It can take a day or more for some to complete every payment made to an account. This means that the amount credited would not reflect immediately on the merchant account’s bank account, even if the acquiring bank has already charged the player.
- Compatible with Popular Games - most importantly, a processor should be able to process payments from all sorts of games particularly those that are popular to many. This guarantees that the option for credit card payments is always available to players regardless of what game they choose to participate in.
- Customer Support - and in times of trouble, customers of gaming merchants should be able to reach customer support to cater to their queries. Oftentimes, chargeback disputes could’ve been settled even before the claim is filed. However, their concerns are not addressed correctly, which then turns into a formal chargeback complaint. This is why customer support is necessary for any online gaming merchant account.
What Does Excessive Chargeback Mean to Gaming Merchants?
As mentioned, excessive chargebacks can be a big problem for gaming merchants and high-risk merchants in general. Excessive chargebacks put any business one step forward to getting included in the MATCH list. This can also lead to gaming credit card processing companies to cancel the merchant account of business owners. But how do you actually determine the chargeback rate?
To put it simply, you can calculate the chargeback rate by dividing the number of chargebacks over the total number of transactions made within a month. The answer to that is the chargeback rate of any merchant and this should be lower than 2%. Banks and other financial institutions mostly set the benchmark to 2% and any number beyond that is considered to be excessive.
A few ways to reduce chargeback ratios include the following:
An acknowledgment email to confirm the purchase with a satisfaction survey form. This email can also serve as a reminder should the customer forget their transaction.
Time, date, and IP address documentation for transactions could also help when fighting a dispute.
A clear business name with the purchased description can also make a difference. This will help clients recognize the transaction once reflected on their billing statements.
Giving customers the option for a full refund will also go a long way to avoid disputes. Gaming merchants should be able to offer this through customer support.
Mitigation programs provided by credit card processors grants another layer of security and authentication that lowers chances of chargebacks.
Your Own Gaming Merchant in a Few Snaps
Get started with your online gaming merchant account. Find trust-worthy underwriters that will help you increase your sales and accept more payments worldwide. Avoid delays and prepare ahead with your valid government identification, a copy of previously voided checks, recent bank statements for at least 3 months, recent processing states for the past 3 months, and other important documents. A good credit history and bank standing will also give you a positive image in the eyes of underwriters. What are you waiting for? Contact us at EU Paymentz today!