Over the years, the gaming industry has grown tremendously, and the demand has doubled as it went online. It is expected to continue growing as technology advances.
Risks also increase as the gaming industry grows to new heights with no signs of slowing down. There are a variety of risks that the sector currently faces, and these are in a state of flux as regulations are continually changing.
What does this mean for the Online Gaming Industry?
Banks and Online Gaming
With an estimated generated revenue of 138 billion this year in the US alone, online gaming poses a challenge for traditional banks. Although banks now offer online banking, a traditional bank account isn’t really suited to meet the everyday needs of online gambling merchants.
Regulations alone do not provide gaming merchants with a flexible environment. Online gaming is fast paced and relies on near real time deposits and withdrawals. Real time transfers at traditional banks incur higher costs.
Traditional banks are also known to Bank Withhold funds for an unknown period of time or lock merchant accounts without warning.
Even the process of opening an account can be fraught. As online gaming is considered a high-risk industry, many banks make it difficult for online gaming merchants to get accounts, or reject them out of hand.process.
The gaming industry presents challenges to the way traditional banking is structured.
Challenges the Online Gaming Sector Faces
There are a lot of grey areas in regulations governing the gaming industry. There are no uniform rules governing the gaming industry, as in some countries gambling is illegal, in others it is regulated, and in still others it is encouraged.
Online gaming on the other hand, is available to anyone with a device and an internet connection. This makes compliance difficult.
As a result, the online gaming industry faces a challenge because it must stay on its toes and keep an eye on regulatory changes across many jurisdictions. .
Having a licence in one country in Europe does not mean that you are eligible to operate in all of Europe or outside it as all markets have different sets of regulations.
One thing that is consistent across most countries is that online gaming providers must be vigilant in their AML/KYC process to protect their customers/players from fraud.
Fraudulent practices are a chronic issue in the online gaming industry. For fraudsters, the amount of money generated in the sector is like a beacon.
Fraudulent activities by consumers who wish to outsmart the game can generate huge losses for a gaming merchant.
Online gaming fraud does not only mean fraudulent accounts but also consumers having multiple accounts trying to increase their chances of winning. Although this type of fraud isn’t that much of a threat, it can still cause significant loss of profit.
As a result, the online gaming industry requires a payment partner capable of addressing and managing this risk by rigorous AML/KYC checks in place.
Chargebacks refer to the price you must refund to players for a variety of factors, the most common of which is illegal activity. Regulations, incentive demand clashes, dissatisfaction, or even buyers’ remorse may all be factors.
This is one of the features of online gambling that banks dislike. Most of the time, it’s a he-said-she said case, and proof is difficult to come by.
And, to be honest, it takes a long time for a dispute to be resolved and gaming retailers will almost always have to pay.
And this can have a huge impact on gaming merchants’ profits and reputation.
Online gamblers expect a smooth, seamless, and simple experience when depositing funds, placing bets, and withdrawing winnings.
According to research, more than a quarter of online gamblers have given up on creating a new account with a gaming website because of the difficult sign-up procedures.
Players want gaming merchants to offer a simple sign-up mechanism that does not jeopardize protection against fraud.
PayPugs for Online Gaming
Collaboration with payment providers as well as gaming and casino operators should lead to innovative approaches for recognizing and verifying good customers while providing a reliable online experience.
PayPugs offers bespoke pricing that is agreed upon with our customers, taking into account the most important aspects of their business — and ours. For account opening, PayPugs charge a one-time fee. There are no secret rates or agendas, and there are no subscription fees.
And we guarantee a high-risk friendly approach for our customers, and we understand the difficulties that the online gaming industry faces in seeking the same banking treatment as other sectors.
- API and white-label: Allowing customers to focus on their core market while maintaining their players within their ecosystem.
- Individual client account: Allowing end users to transfer and withdraw their winnings.
- Debit and prepaid cards: Cover the costs of your operations and affiliate marketing.
- Multi-currency accounts: Allow you to receive and conduct payments in 39 FIAT currencies via SEPA, SWIFT, and RippleNet.
- Crypto transactions: Receive and send funds in +8 cryptocurrencies
- Dedicated IBAN: For everyday B2B/B2C transactions.
We’ve put in a lot of time and effort to provide hassle-free financial services to high-risk companies like forex brokerages, gambling, crypto, and other businesses and individuals all over the world.
We are licenced in MSB, SPI, Crypto Exceptions, API and EMI. Because only the best is good enough for the PayPugs family!