By Denys Melnykov, CBDO and co-founder at Corefy.
My co-founder recently shared a conversation on the topic you can see in the headline, and asked my opinion on how to constantly push boundaries to expand and grow in the gambling industry. I think that question strikes a chord with a lot of people. The challenge lies in ensuring that all the gambling licenses for various geographies are maintainable within the system.
The question is intricate, but I can provide an answer for the portion of payments. You’re welcome to share your thoughts about other aspects of this question in the comments.
Why virtual merchant accounts are worth considering
Let’s say a company is constantly exploring new possibilities to expand and grow, but the industry presents challenges regarding regulations and dynamics. It is not always clear what a company’s moves will be until conducting extensive research on a potential market.
Segregation of payment accounts is a banking practice in which funds from various sources are kept in separate accounts. In our case, these accounts are virtual merchant accounts (not sub-merchant accounts), and the funds are not physically moving. However, they serve a valuable purpose as they provide a more detailed view of the business and help improve compliance and tax payments.
Virtual merchant accounts are all connected to a central hub or, in other words, a payment processor, where transactions and financial information can be tracked and organised. This central hub connects to various payment methods through numerous payment providers, acquirers, and traffic sources.
How you can benefit from virtual merchant accounts
While implementing virtual merchant accounts may add complexity to managing payment operations, it also provides numerous opportunities for flexibility. Now, you may be able to design and manage payment flows independently. Moreover, you may offer a country-specific variety of payment methods and use a unique set of options for each brand. This way, you can support various payment flows for multiple brands and manage multiple payment traffic sources separately.
It can be challenging to track, analyse and calculate all the cash flows associated with gambling, but implementing these strategies can help you stay competitive and compliant. Most importantly, they will help you to adapt quickly to changes in regulations, so you can continue to grow your business.
This concept is valid not only for regulated but all global online enterprises. It can not only streamline your business operations but also help determine the correct tax rate based on the user’s tax residency, IP address, or payment details. Implementing virtual merchant accounts can help make the process of managing and ensuring compliance with tax regulations much easier. At some businesses’ scales, automation is essential in order to manage payment operations efficiently.
How to implement this strategy
When it comes to the technical aspects, online payment cashier software most companies have in place accounting-wise is the register of transactions. It is not suitable for managing a zoo of virtual merchant accounts, since it can usually handle only one. You need to become a payment facilitator for yourself, so you need payment processor interfaces to implement this concept.