A lot of companies have started transferring their businesses into World Wide Web, that’s why it’s a common practice nowadays that the majority of them have both merchant accounts and ordinary bank accounts. In this article we are going to give a short review on merchant accounts, their functions and potential risks.

Merchant account and its functioning

Merchant account is a special type of corporate accounts enabling to receive payments from clients’ credit cards and online bank accounts. This system is perfect for gambling and e-commerce. Merchant accounts are used by gamblers while placing bets or playing slots and board games enabling them to make instant Visa/MasterCard payments.

Moreover, such accounts provide a possibility of making payments via POS terminals and mail systems. In order to make a payment clients have to enter their credit card number and identification code of the merchant account. Money is not charged instantly from users’ accounts, as:

  • First, clients have to contact their banks requesting withdrawal of funds;
  • Banks charge payments via processing systems of acquiring banks. Later on such payments are transferred to merchant accounts of online casinos;
  • Finally, funds are transferred to the bank account of the casino operator.

Acquiring banks seem to be an important link in the said chain of events, as long as particularly these institutions process clients’ requests and transfer money to merchant accounts of final beneficiaries. The system functions rather quickly processing around 1000 requests per minute.

There are two types of merchant accounts:

  1. Casinos that temporarily do not have large client bases allow registration without tying accounts to certain bank cards. This is the most widespread type of merchant accounts which is practically similar to the majority of online payment systems;
  2. Casinos that have a sustainable number of clients whose accounts are tied to bank cards. Usually such types of merchant accounts are used by those who can withdraw money from cards via scanning magnetic strips in terminals.

Additionally, while registration of a merchant account, it is possible to estimate potential risks (high or low), depending on the type of e-business. The given parameter points to the fact that the level of risk can be easily managed.

Difference between merchant accounts and bank accounts

The main difference between merchant and bank accounts lies in absence of limits regarding timing, as long as transactions via merchant accounts can be executed practically 24/7, unlike in case with bank accounts.

Merchant accounts are not subject to monetary control and they do not require transaction documents, as long as the majority of such accounts are opened in offshore zones that means preferential taxation for them.

Opening of merchant accounts

In order to open a merchant account it is necessary to prepare a whole package of documents and pass the process of verification. Banks advance strict requirements to their applicants:

  • merchant accounts are only available to legal entities;
  • the company has to be the owner of a webpage providing a full list of related services, payment systems, prices, customer support and confidentiality policies;
  • the webpage has to be hosted on a separate official hosting and all pages have to be hosted on a single domain zone;
  • pages containing payment services have to be protected;
  • the webpage has to have a separate system of registration and authorization;
  • the company has to open a bank account in a certified bank connected to a reliable processing system.

As for the documents necessary for registration of the merchant account, you might need company statutes and corporate documents, licenses and full descriptions of goods and services the company provides, its credit record, personal data of owners and location of potential operation. In a couple days after the documents are filed, clients get an official letter containing documents confirming opening of the merchant account. Companies acquire individual identification codes with electronic keys. Later on it is necessary to integrate all the said services into the platform you are going to use.

How to choose a proper acquiring bank

The choice of the bank depends on company’s preferences, though you have to bear in mind certain conditions, including the technical ones. The acquiring bank has to be able to process big numbers of payments, having no limitations for the number of transactions. The second condition is availability of licensing for processing activities. Acquiring banks usually require comprehensive information regarding the company, while opening of the merchant account is very similar to loan granting. Banks are trying to minimize potential risks that’s why the whole process is quite complicated.

Merchant accounts and potential risks

Among the main issues that might occur while using processing systems are as follows:

  • uncontrolled money withdrawal of funds by the owner of a merchant account from the client’s card after authorization on the webpage;
  • risk of refund of payment. In this case banks fine owners of bank accounts that’s why companies are thoroughly checked while opening of the merchant account. Banks are obliged to reimburse all funds in case of failing to purchase. Banks bear full responsibility, not processing centers.

It should be noted that not all financial institutions eagerly open merchant accounts for online casinos, as long as such procedures are tightly connected with certain risks. Banks are well aware of the percentage of illegal online casinos that’s why have a quite cold attitude to them and frequently are reluctant to open merchant accounts for them. Sometimes it is better for operators to make use of services of legal firms in order to open a merchant account.


Merchant account is a great tool that makes your online business handy and convenient. Opening of a merchant account is usually linked with certain complexities for online casino operators, though it makes sense to own such an account, as long as it enables to withdraw/input funds via a reliable processing system protected from unnecessary delays and losses.