Gaming, betting, gambling. It’s all booming online, and the business is only going to get bigger.
While some form of in-person gambling is legal in the majority of U.S. states — 38 and counting — there are also monster numbers for online gaming, where nearly 79 million players will be by 2027. It’s a specialty vertical that is, needless to say, a big deal.
Getting into the online gaming market — specifically payment processing for online gaming — can be a lucrative bet, though it’s best to come to the table prepared.
Here are three main insights to help you sell to — make the most of — your gaming merchant accounts.
1. Specialty also means “high risk.”
While often referred to as a specialty business, online gaming is also known as a high-risk vertical. It’s a category that can be taboo for some payment processors. There are a number of hurdles to clear when accepting the money of eager gamers.
- Online = card-not-present transactions. Not being able to verify cardholder identity, age, or actual card information can prove challenging and risky.
- A high rate of chargebacks and fraudulent activity, along with an usually high rate of transactions. Unfortunately, these elements come with online gaming and present logistical and financial challenges for a payment processor — some banks just say, “no thank you.”
- Market volatility is another inherent quality of the online gaming world — player behavior, trends, and gaming preferences can all turn on a dime. Agility, insight, and flexibility, as well as a healthy tolerance for the unexpected, will be huge benefits.
2. Rules and regulations vary by jurisdiction.
Understanding where an online gaming merchant can operate in the U.S. — and what kinds of games they can offer — can be a great asset in structuring payment processing.
Arizona, for instance, allows online betting while not explicitly outlawing online casinos — which leaves the games of chance in a gray area. Iowa will let you play fantasy sports online as well as bet on real sports — but traditional casino play? No way. Delaware, meanwhile, explicitly allows for online gaming — and was the first state to legalize casino games online.
Playtoday has a highly useful guide that breaks down the gaming legalities state by state, in alphabetical order, of course.
3. Understanding payment processing for online gambling: All are not equal.
To borrow reasoning from another online behemoth — dating — there are certain, special qualities that make for a great match for an online gaming merchant. An ideal payment processor will check all the essential boxes.
- They’ll understand the twists and turns of the vast regulatory network that governs online gaming — as well as know the “personalities” of each state that allows it.
- They’ll have a robust infrastructure capable of handling chargebacks and high transaction rates.
- They’ll have advanced, powerful detection technologies to identify and mitigate fraudulent activities — and shield your clients from financial losses.
- They’ll offer customized solutions that fit your customers’ needs — and can quickly pivot to meet a volatile, ever-shifting landscape.
Understanding payment processing for online gaming and who to partner with.
When it comes to specialty verticals like online gaming, NAB has vast experience and expertise.
We specialize in specialty businesses. We’ve done the work to make your part of the process as effortless, frictionless, and seamless as possible — and this kind of “less” really is “more.”
We know how to manage the complexities that come with online gaming — and many other high-risk businesses. We have deep partnerships with sponsor banks, innovative developers, and top-tier tech leaders.
It’s the power to process on a massive scale, stay up-to-date and relevant on trends and technology, and protect the finances and interests of your clients.
Ready to go all in on payment processing for online gambling? We’re here for you: 855.649.2636.
