How to get a fantasy sports merchant account for high-risk businesses
Fantasy sports have been around for quite some time now, and yet it seems like they are gaining its momentum in Europe just now. If you don’t want to miss your chance to make money as a fantasy sports merchant, then this article is for you. We’ll explain to you what they are, how to get a fantasy sports merchant account as well as what to expect in this industry in the nearest future.
But first, let’s lay the foundation and brush over the basics of fantasy sports.
What are fantasy sports all about?
“If you are really good at something, don’t ever do it for free!”
That is the principle behind the fantasy sports concept. Sports fans from all over the world grabbed it and successfully make money using their knowledge about favorite sports, teams, strategies, and drafts. Today, it is more than just a simple hobby for many people around the globe. It is a rather well-paid activity especially popular in the United States and Canada with European fans trying to keep apace.
Disclaimer: Fantasy sports are legal in only two states in the USA.
So, what are they?
To put it short, fantasy sports allow participants to assemble a virtual team and play a game. The game is played by real players from existing clubs. To assemble a team, all the participants get virtual funds they can spend on the players’ salaries. The trick is that the funds are limited, so you cannot afford to get all the star players for your team. Thus, you have to use all of your talent and knowledge to get a winning team within your budget.
To win, the team has to collect the most points which are assigned for various actions (e.g., goals, saves, assists, shots on target, etc.) in real games during the seasons. One has to build successful strategies and experiment with them as well as take into account that some of the players might get injuries and miss games. It is possible to draft and trade players just like in real life.
There are two types of fantasy sports: daily and seasonal. The winner, or winners in some cases, collect all the money other participants bet with in the beginning.
You might say that it is a high-risk sports forecasting or betting. And you will be 100% correct.
And here is why.
Why are fantasy sports considered high-risk business?
Basically, there are several reasons for it.
First of all, betting and sports forecasting poses a higher risk of fraudulent activities and chargebacks. That is why it is considered to be high risk. That thing is that over the years, payment processors identified that fantasy sports are associated with a high-volume turnover which poses a threat to all of the creditors that provide merchants with credit lines.
Second, customers frequently request a refund or a chargeback in fantasy sports. This is another sign of a business being high risk.
Finally, the gaming industry is often associated with money laundering. To prevent this from happening, certain policies are now in place which require special measures to be taken when processing funds from the fantasy sports merchant accounts.
Therefore, if you’re a merchant in the betting and sports forecasting industry, you have to obtain a high-risk fantasy sports merchant account. There is no way around it.
How can you do that? We’ve got an answer.
How to obtain a fantasy sports merchant account
As with any business, one cannot accept credit card payments without a special credit card processing solution. The solution is to obtain a fantasy sports merchant account.
To get one, a business owner needs to find a reliable payment service provider (PSP) and request help in the process of obtaining a merchant account.
There are dozens of PSPs you can opt for, but it is your goal to shop around and pick the best one based on these factors:
How long has the PSP been in this business? Do they really know the ins and outs of the niche? Can they offer conditions specific to your needs based on their previous experience?
If you answered “yes” to these questions, then you have found a perfect PSP.
Check out whether the PSPs are ready to adjust their conditions to your needs. Are they ready to discuss the rates they offer as well as some legal specifications described in the contract?
PSPs might be highly specialized and focused on a specific type of business, and they might be great at doing their job in one niche, but underqualified in the niche of your choice. Therefore, pay attention to whether the PSP you want to address is experienced in providing professional assistance to sports forecasting and betting businesses.
Happy clients can tell you a lot about the PSP. So, check out who they previously worked for. Also, bear in mind that disappointed clients can also be helpful. And to find them, visit a niche forum and post a question about a payment service provider you are thinking of collaborating with.
Chargeback prevention system.
As we have already discussed, this type of business is often associated with fraud and chargebacks. For this reason, it is absolutely mandatory for business owners to opt for merchant solutions that have cutting-edge fraud and chargeback prevention software. It is the only way to protect your funds and those of your customers.
You might be wondering whether it is possible to get into fantasy sports or any high-risk business without a merchant account.
Truth be told, you can, but there are only a couple of payment gateways that will agree to work with you. And even if they do, their fees will be over the roof!
Should you have more questions about obtaining a fantasy sports merchant account, don’t hesitate to contact us. Even though Ikajo International doesn’t work with high-risk businesses, our expertise and networking can be of much assistance to you in the search.