The global online casino industry is on a roll. Its market was worth USD 53.7 billion in 2019 and is expected to grow at a Compound Annual Growth Rate (CAGR) of 11.5% between 2020 and 2027. This market growth is driven by increasing internet penetration and the growing use of smartphones. Furthermore, factors such as quick and easy access to online gambling and gaming, legalization and cultural acceptance, corporate sponsorships, and celebrity endorsements are all helping to drive market growth.
Entering the online casino industry seems promising, doesn’t it?
Yes—but there are numerous challenges that you will face as an online casino merchant. Here are three of those:
1. Fraud
The rapid growth of online casinos comes at a cost—increased cybercrime. The most serious threat is either identity theft or spoofing. Many new account registrations are frauds. Meanwhile, during peak attack periods, automated bot attacks can account for about half of daily casino traffic.
2. High Risk
Traditional payment processors consider online casino merchant accounts as high risk for various reasons, including age limits, vague regulations, high-volume turnover, higher-than-average chargebacks, money laundering, and fraud. Save time when looking for a merchant account for your online casino business by seeking out high-risk merchant providers who explicitly support online gaming and gambling businesses. The right high-risk merchant provider will help you minimize your risk and improve your data security by utilizing cutting-edge data protection technology and fraud prevention mechanisms.
3. Chargebacks
A chargeback is a credit card transaction that a cardholder disputes because of non-receipt of services, dissatisfaction, or outright fraud. Say a player at an online casino table loses big time and then calls his credit card company to dispute the charge. It’s a “he-said, she-said” debate that online casino merchants often run the risk of losing. When a player does this and gets away with it—whether it is a genuine mistake or not—they are 50% more likely to do it again within 90 days. Chargebacks are exacerbated by buyer’s remorse, the convenience of calling the credit card issues and disputing a charge, and merchant policies. Of course, the greater the number of chargebacks your online casino has to pay, the greater the effect on your business’s bottom line and credibility. You could also lose your merchant account if you have too many chargebacks!
What’s the takeaway?
In tandem with high-risk merchant account providers, online casino operators must devise new methods for identifying and authenticating good customers while providing a seamless online experience to overcome these three challenges.
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