Credit/Debit card payment for online quiz type site

[bigmog]

Hi I'm setting up a site for a client and it is proving difficult to get a credit/debig card merchant account for them.

It's more to do with a quiz site where friends you pay to play and can win a small cash prize.

Does anyone know anybody that can provide this service? Most that I try seem to think that it falls into gambling an therefore will not provide the merchant id.

Regards

[vincevincevince]

Do you pay per play? Or pay a monthly/weekly subscription which entitles play throughout that period? Are you always playing against human opposition, and is there any element of chance involved?

[bigmog]

The game lasts a long time typically 4-6 months. Always play as a group of humans who all know each other and are friends. The subscriptions are taken when the game starts. There is an element of luck.

We are happy to only consider debit cards if it helps and can wait quite a long time for the money because the game lasts a long time and no prizes until the end.

[Corey Bryant]

This is what I have ran into with US processors and almost a similar situation (as far as the time).

Let's say the person puts in $10 for something. And you have 10 people playing ($100). How much money will the "winner" get? If the winner gets something that is comparable to $100 or more, you have somewhat of a better chance of it not being considered gambling in this scenario because you (the merchant) are not making any money.

It is somewhat very tricky, but hopefully that might give you a few ideas on the way it operates.

-Corey

[mangotude]

Hi,

If you are based in the UK, then you have to be very careful with games of chance, because there if there is an element of chance, then you could find yourself classified as a lottery or gambling as such.

My apologies if you have already researched this aspect. I looked into it a little while ago, and found it pretty draconian - if there is payment for a prize, you may also have to include a NPN (no purchase necessary) route.

[RailMan]

as there is a cash prize, it is gambling, therefore high risk, therefore difficult to get a merchant account etc

drop the cash prize, make it a small payment for membership (even better is free basic membership and small monthly fee for enhanced membership) - quiz for fun, not for cash - winner gets the glory of winning (people do still play for glory!)

you should find it a lot easier to get a merchant account as it's no longer a gambling site
use worldpay + their futurepay system to take monthly / quarterly / annual membership fees

[bigmog]

Thanks everyone for your advice. I'll keep looking into it and if I find out somthing I'll let you know.

[nick_irvine]

Hi bigmog,

This is a little bit off the topic but since it is a start up, I would recommend you to have just debit card payments. With credit cards depending on the market ur in (betting in this case) more people are loosing than winning. In your example 9 people are lossing and 1 is winning, so the loosers can make chargebacks.
Generally the chargeback is 4-6% of your deposits. Also banks give their credit card customers certain time frame to deny charges. Normally its 45-60 days. To give you an example a player deposits $10 today and losses that money today. Now depending on the bank he uses, he get a 45 -60 day period to deny that charge. The bank wouldnt ask him if he wants to deny that charge but ya if the player approaches the bank and denies the charge the bank will supposrt him and you as a merchant will have to reimburse the bank the $10 the player deposited. And you cant fight the banks as you would have loads of customers depositing fomr the same bank.
Having said that use debit cards and even better is using Neteller, the only online service which is free of chargeback.
I think these two options are your best bet.
This is all from my personal experience in the online gaming industry for the past 3 yrs.
nick

[bigmog]

Thanks nick_irvine

That is great info. Have you setup a similar thing <snip>. The advantage with my game is that the prize doesn't get paid out for nearly 6 months after the entry fees are paid which makes it a bit safer with respect to chargebacks.

[edited by: lorax at 2:31 pm (utc) on Nov. 11, 2005]
[edit reason] removed solicitation [/edit]

[Joop]

there doesn't seem to be a time limit for chargebacks. you can get a chargeback for at least a year after the payment.

[RailMan]

paying out 6 months after payment is received does not make it safer for chargebacks - not one bit safer ......... your gamblers can charge back 6 months after the game is over, maybe more ...........

[nick_irvine]

I dont see a charge back happening after 6 months.
Though some banks might be giving that kind of leaverage to their customer to deny the charge (though i am not aware of such a bank) but operationally it is not feasible to make a charge back after 6 mtnhs of ur purchase.

The reason being in 6 months you will have atleast 4-6 monthly statements coming in and you have to settle them. Obviuosly the person would keep using his cc (credit card) for other purchses over the next 6 months and if he goes to the bank after 6 months for a charge made 6 months before, nah...i dont see the bank agreeing to it and asking you as a merchant to pay the $10. Its just not feasible. Lets say you do 100 purchases in 6 months after you have made the purchase at this game site. You pay for all of them and one fine day it dawns to you that you dindt make a $10 purchase(which you will tell the bank about). I cant see it happening.

Bigmog, I am sorry I dont do freelancing. It would be unethical to do so as I work for a company and I have my obligations to them. Sorry

But it is pretty easy to set up an merchant acocutn with Neteller. you can go to http://neteller.com/ab/merchant/
and write to them.

As for setting up accounts with banks you also have to go thru processors like V impact etc who are theones who facilitate trasfers from the bank to your site and vice versa.
I dont have idea about how to partner with banks for debit cards(never done that) ...but look around and you will find an answer somewhere.
I will see if I can get more info for you.

regards
nick

[edited by: lorax at 2:30 pm (utc) on Nov. 11, 2005]
[edit reason] delinked [/edit]

[vincevincevince]

Lets say you do 100 purchases in 6 months after you have made the purchase at this game site. You pay for all of them and one fine day it dawns to you that you dindt make a $10 purchase(which you will tell the bank about). I cant see it happening.

How about... you pay for your online-based credit card by direct debit every month and only actually see the total debited from your chequing account. It comes to the end of the financial year and time to work out your tax and you find there's a $10 mismatch. You go through your records matching invoices to payments until you find this one which you cannot account for. On the phone to the bank... and it would be quite unreasonable for them to refuse at least to investigate, if not to issue a chargeback.

[Joop]

or you buy a computer with 3 years warranty, and after 12 months it breaks down and you have no satisfaction from the company in terms of repairs, replacements etc.

The chargebacks are not just for fraudulent transactions, they are there to protect customer who have placed the order.