Online gaming

Why Online gaming businesses are considered High-Risk?

Nature of the industry poses a risk

  • Online gaming businesses deal with high-value transactions, making them a target for fraudsters
  • Players can easily dispute charges or claim they did not receive the products or services they paid for, leading to chargebacks and potential losses for the merchant


Industry subject to high levels of regulation and scrutiny

  • Financial institutions view online gaming businesses as high risk due to the potential for fraud and chargebacks
  • This makes it difficult for businesses to secure payment processing solutions


Lack of Compliance

  • The online gaming industry is subject to various regulations and laws that must be followed to ensure compliance. When online games or payment processors fail to comply with these regulations, it can lead to reputational damage, as customers may view them as untrustworthy or unethical.

Multi-jurisdictional operation creates legal and compliance challenges

  • Online gaming businesses often operate in multiple jurisdictions
    • Different countries have different regulations, tax laws, and licensing requirements
    • This can make it difficult for businesses to navigate the complex regulatory landscape


Security Breaches

  • The online gaming industry has faced several high-profile security breaches in recent years, which have led to the theft of sensitive data, including personal information and payment details. When payment processors are involved, the impact can be severe, leading to a loss of trust among customers and potentially damaging the reputation of the company.


Money Laundering

  • Online gaming and payment processing businesses are often targeted by money launderers due to the high volume of transactions and the ease with which funds can be moved around. When these businesses are found to be involved in money laundering, it can have severe consequences for their reputation, leading to a loss of customer trust and potentially damaging the brand’s image.

Mitigation measures for Online gaming merchants to reduce risks when selling online

  • Implement Fraud Detection and Prevention Tools – Online gaming merchants should implement fraud detection and prevention tools to identify and prevent fraudulent activities such as chargebacks, fake transactions, and identity theft. This can help reduce the risk of financial losses and reputational damage.

  • Work with Experienced Payment Service Providers – Online gaming merchants should work with experienced payment service providers that specialize in high-risk industries. These providers have the expertise to help merchants navigate the complex regulatory landscape and secure payment processing solutions that meet their specific needs.

  • Secure Sensitive Data – Online gaming merchants should implement robust security measures to protect sensitive data such as personal information and payment details. This can include encryption, multi-factor authentication, and regular security audits.

  • Implement Compliance Measures – Online gaming merchants should ensure they comply with all relevant laws and regulations, including anti-money laundering regulations and data protection laws. This can help reduce the risk of fines, legal action, and reputational damage.

  • Provide Excellent Customer Service – Online gaming merchants should prioritize excellent customer service to ensure customers are satisfied with their products and services. This can help reduce the risk of chargebacks and negative reviews.

Being a high-risk merchant vs. a regular merchant

  • Higher payment processing fees
  • Lengthier application process
  • Higher chargeback fees
  • Cash reserve requirments:
    • Capped reserve
    • Rolling reserve
    • Upfrom reserve
  • Volume caps
  • Additional technical requirements
  • Being on the TMF / MATCH list


Check out our knowledge hub to learn more about what processing fees, application process, chargebacks and cash reserve requirements or TMF / MATCH list mean. 

Other risk factors?

There may be other risk factors as to why you as a Online gaming merchant are classified as a high-risk merchant, such as:
  • Accepting subscription-style payments

  • Being on the Member Alert to Control High-Risk Merchants, or MATCH list — a list managed by Mastercard that monitors merchant behavior, like chargeback history

  • High average transaction sizes

  • High sales volumes

  • Highly regulated industries

  • International sales

  • Large number of card-not-present transactions

  • Little to no business experience

  • Long fulfillment time frames

  • New or poor credit scores

  • Past fraud or illegal activity

As high-risk Online gaming merchant how to find a payment provider?

It takes effort for businesses to secure a payment processing partner when they are considered high-risk but it is definetly possible to find the right payment solution if you focus on:

  • Maintaining healthy cash levels. Most processors would like to see a healthy cash level in your business bank account. 
  • Try to reduce chargebacks. There could be a number of factors behind the soaring number of chargebacks in your business. Whatever the reasons may be, you can always analyze them and try to reduce your chargebacks.
  • Be transparent. Disclose all materials and relevant information during the application process. Payment processors may ask you for very detailed information about your business and finances. Be open, honest, and transparent.
  • Keep your documents ready. This could mean having six months of bank statements and a few years of tax returns. That said, each processor has its own set of requirements so make sure to check them.
  • Follow the guidelines of your payment processor. When you apply for a high-risk payment solution, besides your business needs, the risk the payment solutions provider takes also matters. So, be flexible and see if there are things you can do to reduce your risk by discussing with them and following their recommendations.

Our Platform will find the right payment solution for your business

Our biggest differentiator? 

We provide payment solutions for merchants with a 90% Succes Rate by Algoritmic matching and pre-KYC onboarding in each industry and region globally.