iGaming Payments: Challenges and Solutions
The gambling industry faces unique payment challenges. Here's how operators navigate them.
The iGaming Payment Landscape
Gambling operators face payment challenges that most merchants never encounter. High chargeback risk, regulatory complexity, and limited acquirer appetite create a difficult environment - but not an impossible one.
Key Challenges
1. Acquirer Appetite
Most acquirers won't touch gambling. Those that do are selective about licenses and jurisdictions. You need acquirers with genuine appetite and experience, not ones who'll exit the market in six months.
2. Regulatory Complexity
Different jurisdictions have different requirements:
- UK (UKGC) - Strict requirements, well-established acquirer network
- Malta (MGA) - EU-accessible, reasonable acquirer options
- Curacao - Easier to obtain, harder to bank
- Isle of Man - Respected license, limited acquirer pool
3. Chargebacks
Problem gambling, buyer's remorse, and friendly fraud create elevated chargeback risk. Card networks monitor gambling MCCs closely, and thresholds are stricter.
4. Rolling Reserves
Expect 10-15% of volume held for 6-12 months. This affects cash flow significantly, especially for growing operators.
Solutions That Work
Payment Method Mix
Don't rely solely on cards. Alternative payment methods reduce card dependency and often have lower fees:
- Bank transfers and local payment methods
- E-wallets (Skrill, Neteller, PayPal where available)
- Prepaid cards
- Crypto (where permitted)
Chargeback Prevention
- Clear terms and responsible gambling messaging
- Strong KYC to reduce friendly fraud
- Alerts from Verifi and Ethoca to resolve disputes pre-chargeback
- Responsive customer support
Multi-Acquirer Strategy
Don't put all volume through one acquirer. Diversify to:
- Reduce termination risk
- Optimize for geography (local acquiring)
- Maintain bargaining power
Rates and Terms
Typical iGaming rates:
- Card processing: 3-6% depending on license and history
- Rolling reserve: 10-15% for 6-12 months
- Chargeback fees: $25-50 per chargeback
- Settlement: Weekly to monthly
Key Takeaways
- License quality affects acquirer access
- Diversify payment methods beyond cards
- Proactive chargeback prevention is essential
- Don't rely on a single acquirer
- Budget for reserves in your cash flow planning
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