Video games are popular, fun and legal, making selling them a popular form of ecommerce business in the U.S. and around the world. Given these facts, you may be wondering why you need to work with a high-risk video game payment processor if you want to sell these items online.

A word about the high-risk categorization

Any business applying for a payment processing account must be reviewed by an underwriter. 

If that entity determines that a gaming or video gaming business represents added jeopardy to the merchant account provider, the company will be placed in the “high-risk” category.

What makes video gaming companies riskier?

Gaming companies are considered to represent more danger to account providers for several reasons. For one thing, there is a high turnover rate in the industry that makes it riskier for companies to furnish a credit line to them. 

Furthermore, many gaming companies are based offshore and are vulnerable to fraud and money laundering. The games or other products sold have a higher-than-normal risk of refunds and chargebacks. Finally, many gaming entrepreneurs are new to the business, representing additional risk to the provider.

It might surprise you to also learn that casinos and other gaming providers are only a small part of the high-risk business community. 

Other types of companies that are also routinely placed in this designation include adult entertainment sites, dealers of firearms and related accessories, travel websites, dating companies and sellers of CBD and nutraceutical products. 

All of them share many of the above traits that cause them to appear riskier in the eyes of potential payment and lending partners.

The solution for high-risk video gaming companies

At first glance, the relegation to the high-risk category can be upsetting if you are new to the gaming sector. In fact, there are many types of high risk businesses that continue to flourish in spite of – and even because of – this designation.

Yes, it is true that high risk merchant account providers will require you to undergo additional scrutiny during the application process. They will also charge you higher per-transaction fees and make you pay other costs. They might even require you to put funds in a reserve account to cover their expenses should you default on payments or go out of business.

These facts aren’t appealing, but there is a silver lining in the cloud. As it turns out, high-risk accounts can provide your video game company with some unique benefits that help to make the downside easier to swallow.

For one thing, these providers work hard to establish relationships with financial institutions that have already demonstrated friendliness toward the gaming sector. As a result, you will be given a wider variety of payment choices for your customers.

Additionally, these entities understand the unique regulatory and security landscape in which you operate. Therefore, they can help you to navigate the rules, tax specifications and data management pitfalls that are found only in the gaming sector.

Finally, they understand better than anyone the importance of uninterrupted online service. Should you encounter a technical glitch or, in a worst-case scenario a security breach, they will work tirelessly with you until you are up and running again. 

After all, time is money, and they don’t get paid unless you do.

Characteristics to prioritize when choosing a high-risk provider for your gaming business

Not all high-risk merchant account providers are created equal. As with every other aspect of setting up and running your business, taking the time to choose the right one is vital.

To that end, only pick a provider with demonstrated expertise in the gaming sector. If someone touts themselves only as a “high-risk account provider” is not enough. You need the special understanding and dedicated relationships that only a video game payment processor will have.

Also require that all pricing and agreements are disclosed and easy to understand. Be sure that the company adheres to the highest updated security protocols, and demand prompt and dedicated customer service. Look for a provider who can grow with your business by offering a wide selection of configurations and payment choices. You might not want all of them now, but things could change, and you want a provider who can scale with you.

When you partner with a topnotch high-risk video game payment processor, you can look forward to a positive long-term collaboration that provides your customers with multiple payment choices. 

At the same time, you will benefit from industry and regulatory expertise, optimized security, transparent pricing and dedicated customer service that can see you through virtually any difficulty.