Fantasy Sports Merchant Account
Almost any kind of business that allows customers to purchase a product or service, especially if those transactions take place through a website, requires a merchant account to give customers the freedom to make their purchases with a debit or credit card. However, businesses in some industries inherently have a more difficult time obtaining payment processing accounts than others, simply due to the way those industries are viewed by banks and processing companies. Sports forecasting and Fantasy Sports websites are among the businesses that face these challenges, as many standard payment processing companies will simply refuse to provide a merchant account.
The difficulty in obtaining a fantasy sports or sports forecasting merchant account comes not from any problem with the business of generating and selling sports forecasting tips, but from the fact that customers who buy these tips and picks are generally doing so for the purpose of gambling. Gambling is one of several industries, along with adult entertainment, cigarettes and e-cigarettes, and collectibles and antiques, that banks and payment processors view as inherently high risk, and those institutions will generally not offer accounts to companies that deal even tangentially with any aspect of those industries. Businesses that offer products or services under the umbrella of any of those industries need to turn to a processor that specializes in high risk merchant accounts in order to accept payment card transactions. For sports forecasters and fantasy sports merchants, this is true despite the fact that the transactions processed through a sports forecasting or fantasy sports merchant account are not themselves more vulnerable to chargebacks or fraud than those of any other business, assuming the website is updated frequently and the tips and picks provided are reasonably accurate. Simply having a connection to gambling means that sports forecasting is perceived as high risk, and rather than trying (unsuccessfully) to change a financial institution’s decision on that score, seeking a sports forecasting casting merchant account through a high risk processor is the best approach.
Your choices for high risk merchant account providers largely fall into one of two categories: domestic high risk processors and offshore high risk solutions. For a sports forecasting business just starting up or looking to move away from third-party payment processing for the first time, a domestic high risk processor is likely to be the better choice for a number of reasons. Many offshore banks and payment processors prefer to deal with companies that expect a high volume of transactions, at least $50,000 per month. Several offshore processors are payment aggregators, meaning that your transactions will be processed alongside those of other high risk businesses, with the potential that their chargebacks and problems may impact your ability to process credit transactions. Domestic high risk processing institutions are much more welcoming to small businesses and start-ups, and you will get the individual attention and personalized terms of a direct merchant account.
When applying for your sports forecasting or fantasy sports merchant account, you will need to provide your social security number to the payment processor for the necessary credit check. As part of the application process, be sure that your sports forecasting website is up and functioning completely, as the underwriter in charge of your account will need to access the members’ area to ensure that everything is working and that the tips and picks you offer are readily available and regularly updated. If all goes well and your application is approved, you should be able to get your sports forecasting merchant account set up and ready to accept transactions within a week or two. Despite fantasy sport businesses being lumped into a high risk industry, it’s still possible for you to accept credit and debit transactions without paying unreasonable processing fees.