Table of Contents
- 1 Applying For A Fantasy Sports Merchant Account/Credit Card Processing Solution
- 2 Can You Use Paypal/Stripe For Fantasy Sports Processing?
- 3 Why is Fantasy Sports Credit Card Processing High Risk?
- 4 Fantasy Sports Chargebacks
- 5 What Corepay Can Do To Help Prevent Chargebacks To Your Business
- 6 High-Ticket Values
- 7 Rampant Fraud
- 8 Are Fantasy Sports Legal In All 50 States?
- 9 How To Choose The Best Merchant Account For Fantasy Sports
- 10 Fantasy Sports Fraud/Security
- 11 Why Do I Need A Fantasy Football High-Risk Merchant Account?
- 12 What Are The Largest Daily Fantasy Sports Websites?
- 13 Fantasy Sports Merchant Account Fees
- 14 Which Countries Are Fantasy Sports Most Popular?
- 15 Corepay – Your Slam Dunk To Credit Card Processing Solutions For Fantasy Sports
Seeking out the best payment processor for your fantasy sports business can be a daunting task. Whether you’re a brand new business or you’ve been unfortunate enough to have your fantasy sports merchant account terminated, you’ve come to the right place.
Fantasy sports merchant accounts are considered high-risk, which means you will need to find a payment processor that deals with high-risk merchant accounts.
The U.S. fantasy sports sector is expected to bring in over $10 billion in revenue in 2021. This should come as no surprise as sports are starting to come back to regular attendance levels with COVID restrictions generally easing globally. This means that fans and gamblers will now be able to put together their favorite fantasy teams for significant sports such as football, MMA, soccer, etc.
Since fantasy sports often have a connotation with gambling, low-risk processors and traditional mainstream banks will often shy away.
Fantasy sports merchants run the risk of having their accounts frozen/held or, in some cases, terminated should they choose a low-risk processing solution.
If this happens, payments can be frozen and withheld for up to 180 days, depending on your merchant processing agreement (MPA).
Fantasy sports merchants can avoid this by choosing a high-risk processing solution from the start. High-risk processors understand the risk and nature of the business more so than low-risk processors, and they also can offer ways to mitigate against chargebacks/fraud.
In the fantasy sports industry, chargebacks can be the bane of a merchant’s success as they are expensive and can even lead to processors terminating your merchant account.
At Corepay, we have over two decades of high-risk credit card processing experiencing as well as years of experience processing in the fantasy sports market, and we are confident that we can offer bespoke processing solutions for your business.
This article will explain why we believe we are one of the best fantasy sports merchant account providers and offer tips and guidance into how merchants can grow their business.
Applying For A Fantasy Sports Merchant Account/Credit Card Processing Solution
Applying for fantasy sports payment processing is made simple with Corepay. Our goal is to get you pre-approved and processing payments as quickly as we possibly can, with approvals ranging between 24 and 72 hours.
At Corepay, we guarantee the following for fantasy sports merchant accounts:
When applying for your fantasy sports merchant account, not all payment processors are created equally. Some of the fantasy sports that Corepay offers credit card processing for include:
Note: Many of these sports have benefited significantly in terms of popularity due to fantasy sports/companies such as Fanduel, Draftkings, Lucra Sports, etc.
When applying for your merchant account for Fantasy Sports, you will need the following:
Can You Use Paypal/Stripe For Fantasy Sports Processing?
The short answer is no. One of the things that separate high-risk processors from low-risk is that the majority of high-risk companies will do their underwriting at the time of the application.
While Paypal and Stripe are great solutions for certain industries, they don’t work with high-risk businesses. They also can take up to 6 months to audit your merchant account.
This becomes a problem should your fantasy sports business be operating on a limited cash flow. Paypal can audit your account and deem it to be against the merchant terms agreement and terminate you without any questions asked.
This ultimately can put a 180-day hold on your account and funds, which can be devastating to your business. Our advice for any merchants who have their funds held is to seek out high-risk solutions immediately.
You will not be able to access your funds until Paypal allows you to access them, which can take the full 180 days. If your account was terminated, all is not lost. We frequently have clients come to us looking for high-risk solutions which are unfortunately dealing with this situation.
We will do our best to quickly get you approved and set up with the best payment solutions for fantasy sports.
Why is Fantasy Sports Credit Card Processing High Risk?
While the biggest culprit for any industry is typically chargebacks, they are even more devastating to banks and processors in the fantasy sports industry.
Outside of chargebacks, ticket values in fantasy sports can often be pricey. Merchants will automatically be considered medium to high-risk from sponsored banks when they are dealing with high-ticket items.
Here are the main reasons why the Fantasy Sports industry is deemed high-risk:
Fantasy Sports Chargebacks
Chargebacks frequently occur in the Fantasy sports world. Having the right payment processing provider can significantly aid in chargeback prevention for your business.
The way a chargeback occurs in this industry is if a customer is upset over a bet they placed and disputes it with the bank. For example, your customer lost a significant amount of money and decided to look for a way out of it.
This is an act of fraud; however, it can be challenging to fight against if your business doesn’t have the proper procedures and guidelines in place.
What Corepay Can Do To Help Prevent Chargebacks To Your Business
We understand in the high-risk industry that chargebacks are of utmost importance. We keep a close and personal relationship with all of our clients to ensure they are doing everything in their power to not only prevent chargebacks but also fight against them once disputed.
Fantasy Sports merchants should have a clear set of guidelines on their website that inform customers of all of your companies policies. In these guidelines, it should be clear what your stance is on refunds.
You should also have 24/7 customer service that is ready to respond to any complaints that a customer may have. Customer service can be another line of defense against chargebacks in the fantasy sports industry by simply responding and trying to quickly ease the customer’s frustration.
If this is done, there is a good chance this will prevent customers from going directly to the bank to file a dispute. Keep in mind, since customers are gambling, they are potentially playing with big tickets frequently.
One of the situations that can occur in this industry is a double-charge on the customer. This is when a customer places a fantasy bet and is charged twice or claims they were charged twice. Where this gets tricky is if the customer ends up winning. Your company should have clear guidelines on any situation such as this that can occur.
Here is a quick reminder of what your business should do to mitigate chargebacks.
Corepay also uses chargeback prevention tools and will make sure your website is up to date with all the current protocols to fight chargebacks. To help with this, we have designed our partner product CB-ALERT, and we can implement this for your business.
Since Fantasy Sports falls into the MCC of 7994, which is considered Esports, banks, and processors typically come across large ticket values.
When a sore loser comes around decides they want to dispute their charge, this can become a grey area. If your business isn’t set up with the proper chargeback tools and security solutions, you could be in a for a rude awakening. At Corepay, we make sure our clients have the most up-to-date solutions to fight fraud.
Fraud relates to chargebacks in the sense that an unhappy customer can commit fraud by filing a dispute for a bet that they did in fact place.
This frequently occurs in the fantasy sports industry, especially if the company doesn’t state specific policies and guidelines for customers on their websites/apps.
Are Fantasy Sports Legal In All 50 States?
Daily fantasy sports aren’t yet legal in all states because of state-specific laws that bar online gambling in any form.
Interestingly, under federal law, they are entirely legal as there is a specific exemption in the legislation that covers online gambling. The following are states that do not allow daily fantasy sports (DFS).
It is important to note that those who live in states in which DFS is banned will not be able to place bets.
How To Choose The Best Merchant Account For Fantasy Sports
Choosing payment solutions in this industry isn’t always easy. While you are likely looking to begin processing payments quickly, we highly advise you to compare the rates and solutions offered by various high-risk processing companies.
You will find that every company will be able to offer you different services along with other pricing structures.
Below are 5 things you should look for when choosing the best payment processing:
Fantasy Sports Fraud/Security
There will be copious amounts of fraud when dealing with any high-risk industry, and there’s no way around it. That being said, merchants can do plenty of things to mitigate fraud and increase their security.
In order to bring your company up to date with the most secure solutions, Corepay recommends the following standards be met within your business:
At Corepay, our gateway, Solidgate, was specifically built to support high-risk merchants who deal who process high volume. Solidgate has full payment tokenization, which guarantees your business a high level of encryption and is particularly useful for recurring payments.
Another way that Corepay helps stamp out fraud is by having direct integrations with all of acquiring partners, thus eliminating unnecessary middle-men/access points.
Why Do I Need A Fantasy Football High-Risk Merchant Account?
According to Yougovamerica, over 15% of Americans have played fantasy sports in the last 12 months. This percentage is rapidly increasing, so having the ability to process diverse forms of payments is crucial.
With Fantasy football merchant accounts specifically, the industry isn’t all first-downs and touchdowns. While there are many industry perks, there are some pitfalls, including high-ticket-priced chargebacks initiated by consumers.
Working with a high-risk processing provider will help combat chargebacks and prevent your merchant account from being terminated or funds being held.
What Are The Largest Daily Fantasy Sports Websites?
Currently, the most populated daily fantasy sports sites are:
Fantasy Sports Merchant Account Fees
You may be wondering how expensive processing for your fantasy sports business. The fees will vary depending on the risk associated with your business.
Factors to be considered here are:
While you will probably still be paying more in fees overall with your fantasy sports merchant account, you also won’t have to fear your account being terminated, should you choose a high-risk credit card processor.
At Corepay, we are well aware that fantasy sports processing fees can dilute your profit margins, and we do everything to minimize this from occurring.
To do this, we choose to operate with 100% transparency with all of our clients. We also waive application fees, setup fees, and over-the-top early termination fees.
Which Countries Are Fantasy Sports Most Popular?
Fantasy sports are currently the most prevalent in the United States. Outside of the United States, India has an up-and-coming market for fantasy sports as they have such a large population.
Currently, cricket is a popular sport to bet on in India.
According to GlobeNewswire, the growing cellphone penetration rate in the United States is one of the primary reasons that the United States leads the market and shows no signs of letting up.
Corepay – Your Slam Dunk To Credit Card Processing Solutions For Fantasy Sports
Unlike low-risk processors, Corepay ensures all underwriting is done at the time of application so that the risk of a surprise that can adversely affect your processing is negated.
We have a dedicated and highly experienced team for all things high-risk, including fantasy sports. Not only can we provide chargeback solutions to help save your business money, but we will also make sure your company gets approved and stays approved.
Fill out an application below to speak with our team about our slam-dunk fantasy sports payment processing solutions.