What is an Online Casino?
Online Gambling Payment Processing Table of Contents
An online casino is a virtual version of a traditional brick-and-mortar casino that allows players to gamble and play casino games over the Internet. These online casinos offer various games, including slot machines, table games, video poker, and live dealer games. Most online casinos are registered through a country that offers specialized online licensing and regulation for gambling.
Online casinos typically operate through websites or mobile apps, requiring players to create an account and deposit money. Once you make your betting payments, you can play any game in their network.
Players can access the games through their web browser or downloading a software client onto their computer or mobile device.
Online casino games are powered by software providers, who create the games and determine the payout percentages. These software providers use a Random Number Generator (RNG) to ensure the games are fair and random. Most casino operators retain the services of auditors to confirm the accuracy of payouts and to verify to gamblers that the casino is operating honestly.
Many online casinos offer bonuses and promotions to maintain their gambler base and attract new players to their platforms. Bonuses can include free plays, deposit matches, and loyalty rewards.
What Types of Payment Methods Do Online Casinos Accept?
Various payment methods can be used to fund online casino accounts, depending on the casino licensing, casino platform, and the country where gamblers are located. Some casinos only accept payments from cash accounts, such as debit cards and ACH payments. Others will accept credit cards, debit cards, and cryptocurrency. The most common payment methods that many online casinos include:
Credit and Debit Cards: Most online casinos accept major credit and debit cards like Visa, Mastercard, China UnionPay, and American Express.
e-Wallets: e-Wallets are online payment systems that allow gamblers to store and transfer funds electronically. Gambler accounts are funded by either bank transfers or credit/debit cards and can store funds for use at partner casinos.
Bank Transfers: Bank transfers allow gamblers to transfer funds from their bank account to their online casino account. This method is usually slower than others, but some players prefer it for security and casinos for fraud prevention.
Prepaid Cards: Prepaid cards can be purchased at retail locations and used to make many online purchases, including deposits to some online casino accounts and eWallets. Prepaid cards can be loaded with cash and reduce the risk for gamblers by not using anything tied to their credit cards, debit cards or bank accounts.
Not all online casinos accept all payment methods; some may have fees or limits associated with specific methods. Before choosing your gambling payment gateway, consider the local laws in your area and the types of payments you want to accept.
Why Are Online Casinos Considered High-Risk?
Online casinos are often considered high risk because they operate in a highly regulated industry and are subject to multiple legal and financial risks. Online gambling is illegal in many countries, and jurisdictions have specific laws and regulations governing online gambling activities. This can create legal risks for online casinos operating in these jurisdictions, as they may face fines or legal action if they do not comply with the local laws and regulations. Payment processors and banks can also be named in these legal proceedings, creating a delicate situation for underwriters.
Online casinos also face escalated threats of fraud and chargebacks from gamblers. Players may dispute charges on their credit cards or claim they did not receive the goods or services they paid for. This can result in significant financial losses for online casinos, payment processors, and banks.
This has resulted in the owners of online casinos facing difficulties in processing payments, as many financial institutions have become reluctant to work with businesses in the gambling industry due to the perceived risk of fraud and chargebacks. The online gambling industry has historically had a negative reputation, with concerns about problem gambling and the potential for fraud and scams. These difficulties have plagued online casinos, making attracting and retaining customers challenging when funding accounts and payments can be inconsistent. These difficulties can spiral out of control, making obtaining business licenses or passing audits challenging. These difficulties have lead to most online casinos to seek out offshore merchant account providers to offer reliable merchant services or face shutting down.
What is a High-Risk Merchant Account?
A high-risk merchant account is a type of account that is designed to meet the specific needs of businesses that are considered high-risk. This includes online gambling, adult entertainment, and Forex trading businesses, among others. An online casino merchant account faces these same challenges.
Payment processing companies that specialize in working with high-risk businesses typically offer high-risk merchant accounts. These companies understand the unique risks and challenges that high-risk businesses face and can provide tailored solutions to help these businesses process payments and manage financial transactions.
Some of the features of a high-risk merchant account may include:
- Higher Fees: High-risk businesses may be charged higher fees for payment processing services, due to the increased risk and potential for chargebacks and other disputes.
- Reserve Accounts: Payment processors may require high-risk businesses to maintain a reserve account, a portion of the business’s earnings held in reserve as collateral in case of chargebacks or other disputes.
- Chargeback Management: High-risk merchant account providers may offer specialized chargeback management services to help businesses reduce the risk of chargebacks and manage disputes if they do occur.
- Specialized Underwriting: High-risk merchant accounts may require more detailed underwriting and review processes, including background checks and documentation requirements, to ensure the business is legitimate and not engaging in fraud or other illegal activities.
By working with a high-risk merchant account provider, businesses in high-risk industries can access the payment processing services needed to operate and grow their businesses while managing their unique risks and challenges.
Payment Gateways for Online Gambling
Several payment gateways specialize in working with online gambling businesses. Here are some of the top payment gateways for online gambling:
- Allied Payments: Allied Payments is a processing provider that can work with your high-risk business to collect payments from your customers while keeping compliance with federal, state, and local laws. It offers a high level of security and reasonable processing fees.
- Neteller: Neteller is an e-wallet payment gateway that is widely used in the online gambling industry. It allows users to make deposits and withdrawals to and from their online casino accounts and offers fast and secure payment processing.
- Skrill: Skrill is another popular e-wallet payment gateway widely used by casinos and gambling websites. It offers fast and secure transactions and easily lets users make deposits and withdrawals.
- Paysafe: Paysafe is a payment gateway that offers prepaid card and e-wallet services for online gambling transactions. It allows users to make quick and easy payments without sharing sensitive financial information.
- PayPal is a widely used payment gateway accepted by many online casinos and gambling websites. It offers fast and secure payment processing and allows users to make deposits and withdrawals easily.
- Worldpay: Worldpay is a payment gateway that offers customized payment solutions for online gambling businesses. It offers secure payment processing, fraud prevention tools, and chargeback management services to help businesses manage their financial transactions.
Final Thoughts
If you need a payment provider to help your business accept online payments, start with the list above. Research each one to find out their key features and benefits. Next, take a look at their fee structure and setup costs. From there, you should know which one to choose and what steps to take next.
