A complete guide on virtual IBAN accounts and how to open one as a high-risk companyContinue reading
The Covid 19 pandemic has resulted in a rapid increase in both the volume and value of digital payment options. In fact, according to Statistica, the total transaction value in the digital payments segments is projected to reach $7,860,739m in 2022 and $10,715,390m by 2025.
Mobile wallets, cryptocurrency and voice-activated payments – it’s all changing so quickly that it’s hard to keep track. But at Capitalixe, we’ve got your back.
Below are some of the biggest trends in digital payments today and what the future holds for them. So grab a pen and paper (and a lovely hot cuppa) because here are the trends you’ll be discussing at your next dinner party…
Now one of the most used digital payment methods by consumers, mobile payments use will continue to rise with 26.93% of CAGR projected between 2020-2025.
These services offer customers convenient, instant payments with no need for cash or PIN numbers. And they’re changing more than just the shopping experience, they’re even revolutionising how we make utility bill payments and send money abroad.
Today, we can use our mobiles to pay for groceries and petrol or even delve into the world of digital currencies by transferring Bitcoin and other cryptocurrencies between wallets. And we can do it all with just a tap of our phones.
However, there’s still room for improvement in this sector as many retailers are still reliant on cards as an alternative to cash. This is mainly due to the fact that not everyone has a mobile wallet and some customers still don’t trust them.
Buy Now Pay Later schemes are quickly becoming the preferred payment method, especially with millennials and Gen Zs. StudentBeans found that 42% of UK shoppers aged 16 to 24 used a BNPL service for big-budget fashion items and expensive tech purchases.
These schemes allow users to spread the cost of expensive purchases over time. Let’s say you want to buy a product for £200. You can split this purchase into three or four monthly instalments with zero interest.
Klarna is one of the leaders in this field, with an impressive 90 million users utilizing their services. They are quickly replacing traditional credit cards, especially for internet shoppers. Last year, the company announced it had raised $639 million in funding rounds, bringing the company valuation to $45.6 billion.
If you own an Alexa, Google Home, or Siri device, you probably use it to get the weather report or book a cab. But did you know that these devices can also make your shopping easier?
Statista found that 35% of users use smart speakers for buying products like home care, groceries, and clothing.
So how does voice-assisted shopping work? You simply tell your digital assistant to order you a new pair of shoes, and they do it for you – there’s no need to type in any payment details as they are already logged into your account!
The future of digital payments is undeniably crypto. And with mainstream providers like PayPal, Stripe, and Square now accepting Bitcoin as a form of payment, it’s easier than ever to use these new currencies.
40% of large corporations in the Americas, Middle East, and Africa are considering using digital currencies for purchases over the next year. Plus cryptocurrency is helping a number of our clients who have high-risk merchant accounts.
Named one of the biggest trends in the payments industry by PYMNTS, crypto is becoming an increasingly attractive payment option. If you’ve still got doubts about them, here’s why more and more companies are looking into crypto payments.
Artificial Intelligence & Machine Learning
AI is already changing the way we live, and now, it’s also revolutionising digital payments.
Machine learning algorithms are helping to identify fraud and prevent them, as well as providing real-time security measures against hacking.
AI can also help companies personalise the customer experience. Algorithms can identify a user’s shopping habits, preferred payment types, and any special requests – all in real-time!
As people become increasingly reliant on AI to provide a better user experience, these technologies will continue to gain in popularity.
As well as improving the user experience, AI is also starting to take on some of the back-end tasks that are traditionally handled by humans.
For example, AI can now provide automated financial advice based on individuals’ spending habits. Meanwhile, chatbots are also helping customers manage their accounts and complete simple transactions – without ever having to speak with a human being!
In the future, we may even see AI-enabled financial advisors replacing some of the roles of human advisers. For example, rather than recommending a specific assortment of products to invest in, an AI system would be able to provide financial advice based on individual circumstances.
So there you have it. Our top digital payments trends for 2022.
As technology continues to advance, we can expect to see more innovative payment technologies – particularly in the fields of artificial intelligence and cryptocurrencies. These could all become integral parts of our daily financial routines over the next year, from voice-assisted purchases to chatbots.
At Capitalixe, we leverage the latest in financial technology solutions to help high-risk companies like those in the gaming and cryptocurrency sectors. We can help attain high-risk merchant accounts, multi currency IBANs or even bank accounts for financial institutions and the latest payment solutions.
Contact us today to find out how we can help your business grow!
Online gambling has been growing exponentially in the last decade. The market is growing rapidly and according to a report by Research and Markets, it is expected to reach $72.02 billion by the end of this year, at a compound annual growth rate (CAGR) of 12.3%.In part, it is due to a fast internet connection becoming available to more people and the demand for online gaming increasing. For most of its history, online gambling was a reasonably secure environment. Still, recent developments have brought about significant changes in how people can pay for their time at the tables, slots, or sports events.
1 Security Issues
One of the biggest problems facing all online casinos is security issues, especially around payments. For many years ‘phishing’ was a big problem for several major casino groups, with hackers sending out emails that appeared to have come directly from the site asking for personal details including passwords, credit card information etc. These attacks were designed to steal money from accounts without raising suspicion until after it was too late. This type of security problem is still a concern as casinos have been targeted several times in recent years, but now the biggest threat comes from within. The employees of online casinos are a serious security issue with many incidences of theft either by internal staff members or ex-employees. This type of breach can cause huge damage to a casino’s reputation and players tend not to trust them again after such incidents.
One major issue that operators face is regulation. Generally, gambling sites are regulated at the host country level, which means that if you want your site to accept customers from around the world, you need to get licenses from all those different jurisdictions. If you only operate within one territory, this isn’t really an issue, but it makes expansion difficult. The other side of the coin is that regulations can change very quickly, and this makes planning a business difficult.
3 Payment Options
Given that gambling has been a fairly cash-only business for a long time, finding ways to pay online was not always easy. In recent years technology has made it possible to use all the usual payment options, including credit cards, bank wires, and e-wallets such as PayPal/Alert Pay, etc. All these methods have their own pros and cons, but they work well enough for most players as long as they are reasonably secure. For those who don’t want to use traditional payments, there are newer alternative payment providers who also offer solutions. Cryptocurrency Bitcoin has become a popular payment method in the online gambling world, and there are now a number of Bitcoin casinos that offer excellent games and bonuses.
Another issue that operators face is the different currencies that their players may want to use. For example, you might have customers who want to deposit and play in Euros, while others might want to use British Pounds.
This can be a problem if your site is only set up to deal with one or two currencies, as you then have to find a way to convert them. Most gambling sites now use some form of currency conversion, but it can be an expensive process so casinos are always looking for ways to reduce these costs.
One of the biggest problems for any business that deals with payments is chargebacks. A chargeback happens when a player disputes a payment that has been made to a casino. This can be for a number of reasons, such as the player not receiving the product they paid for, the product not working or being defective, or simply that they didn’t authorize the payment in the first place. In some cases, the player may have been scammed by the casino and so will try to get their money back. The problem for casinos is that chargebacks are often difficult to fight and can be very costly. Not only do they lose the money that has been disputed, but they also lose any associated fees such as those charged by payment processors. In extreme cases, a casino can even have its license revoked if there are too many chargebacks.
6 . Fraud
Another issue that operators face is fraud. This can come in many shapes and forms, but essentially it involves someone trying to either steal other people’s details or break into the casino itself by targeting its software. There are many ways that an attacker can try to get access to other people’s data, but one of the most common is DDoS attacks, where thousands of computers are used to attack a website with traffic until it becomes overloaded and can’t function correctly. The attackers then offer to stop the attack in exchange for money. Another type of fraud includes rogue employees who may be tempted into stealing account information or installing keyloggers on players’ PCs in order to collect passwords etc. As you might imagine, this type of fraud causes huge damage to both the player and operator reputations.
7 Customer Retention
Finally, one of the biggest challenges for any business is customer retention. This is especially true in the gambling industry, where players can be very fickle and may switch sites at the drop of a hat if they are not happy with the experience. It’s therefore vitally important that casinos keep their players happy by offering good customer service, bonuses, and other promotions and by keeping the games running smoothly. If they can do this then they are likely to keep their players for a long time.
As you can see, there are a number of different payment issues that operators face when running an online gambling site. By understanding these challenges, casinos can put in place the necessary procedures and systems to reduce the risk of financial loss and reputation damage.
At Capitalixe, we aim to assist online casinos in finding reliable payment solutions that fit their needs. We’ve partnered with leading financial institutions and payment processors from all over the world, which means that we can provide access to a variety of banking options for our operators.
We constantly monitor all transactions, so you can be sure that your customers’ funds are safe and secure at all times.
Give us a call and see the difference for yourself.
In the business world, risk is unavoidable. But while all businesses have some degree of it, several factors make some industries riskier than others.
Banks and financial institutions evaluate your industry and categorise it into either high, medium or low risk. If you are perceived as a business in a high-risk industry, many banks and financial institutions are likely to refuse your request to open a merchant account or to set up payment methods with them.
If banks and payment processors do choose to work with high-risk companies, they often charge them a lot more in rates and fees. Plus, these companies may have to give up a portion of their daily transactions. This is known as a rolling reserve.
So what makes an industry high-risk? And how can businesses open high-risk merchant accounts and access high-risk payment solutions if they are in this category?
High-risk merchant accounts?
A high-risk merchant is an identification by a Card Processor of a business that operates in a high-risk industry, sells products or services that experience a high level of chargebacks, is prone to fraudulent transactions, and receives stolen credit cards .
This means that, as well as your company’s financial health, banks and payment processors also make their decision based on the industry you operate in.
Industries that are considered high-risk
CBD products are becoming legal to produce and sell worldwide after their medical benefits were discovered. Each country has different legislations around its use. For example, CBD can be consumed in the majority of EU countries. According to EU law, hemp growing and selling is permitted if the THC content is less than 0.2% . Countries outside of Europe have legalised or are legalising CBD, including Canada, Russia, South Africa and the United States of America.
The main reason why this industry is considered high-risk by banks and payment processing companies is that the industry’s legislation is constantly changing. Businesses have to navigate through unclear regulations regarding how CBD can be sold in various countries. Brexit also had a massive effect on the UK market, as there are now further regulatory restrictions they must meet .
According to a report by Research and Markets, the online gambling industry is expected to reach $72.02 billion by the end of 2021, at a compound annual growth rate (CAGR) of 12.3% . The gaming business merchants offer many different forms of gambling, including casinos, sports wagering, online poker and mobile gaming.
There are a number of reasons why this industry is considered high-risk to banks and payment processors. Firstly, a lot of online gambling businesses are based in offshore jurisdictions like Malta, Isle of Man etc. Because of this, the industry often falls victim to fraud and money laundering suspicions. There’s also a high volume turnover associated with this business, so banks are cautious about offering merchants a credit line.
The global adult entertainment market is estimated to exceed the value of US$ 300 Bn by 2030, expanding at a CAGR of ~5% during the forecast period . This includes companies that deal in toy and novelty sales and dating services, telephone services, adult and live stream services.
Many of these companies struggle to obtain a merchant account, and they need this to accept credit and debit card payments from customers and clients. This is because a lot of them are subscription-based services. This means that customers pay on a minute-by-minute basis. Banks are also sceptical about getting involved with this industry because there has been some unfortunate coverage surrounding this industry, relating to illegal activity. Because of this, many payment processors fear there will be a reputational risk associated with this industry.
Financial institutions encompass a wide range of business operations within the sector including banks, trust companies, insurance companies, brokerage firms, foreign exchange and investment dealers .
This industry is categorised as high-risk because working with other financial institutions requires a lot more due diligence. Payment processors need to ensure that the financial intuitions they work with strongly comply with regulations. Plus, financial institutions are much more prone to money laundering. This risk is heightened if their clients are also categorised in a high-risk industry.
Mainstream banks are a lot more hesitant to work with crypto companies, with many unable to accept this new age style of payment method. Cryptocurrency is known for wanting to be unregulated and not tied to any government. Because of this, banks are far less likely to want to work with them. Plus, many payment service providers associate crypto with international criminal organisations and money laundering, which stops them from working with these companies.
Sign Up For Payment Processing For High-Risk Merchants
Although many banks and payment processors refuse to work with high-risk businesses, there are definitely still ways to receive a number of merchant solutions. Choosing the best high-risk merchant account is crucial, and you want to ensure that you’ve done enough research and ideally work with a company that specialises in these industries.
At Capitalixe, we bridge the gap between your business and the financial institutions you choose to operate with. We can provide several solutions, to help businesses open offshore high-risk merchant accounts, forex merchant accounts, and bank accounts for gambling businesses.
Based in London and operating internationally, Capitalixe is a payments and banking consultancy specialising in helping companies in high-risk industries obtain the latest financial technology.
Our team brings a wealth of experience and industry expertise, leveraging our network of trusted providers for the benefit of our clients. Fintech has brought a wealth of products and efficiencies to businesses and individuals – matching these opportunities to our client needs is at the core of the Capitalixe ethos.
Get in touch to set up a free and non-obligatory consultation and learn more about how we can help resolve your payment and banking challenges today.
Because of the rise in fraudulent and scam activities, more and more individuals are becoming extra cautious about disclosing their financial information to other parties. All of the major corporations and enterprises are attempting to devise methods of making safe payments without having to worry about their data being compromised. One of the most popular and secure methods has been presented by technology professionals and has been widely used.
The Payment Gateway is the name given to this system. The purpose of this article is to provide you with all the necessary information regarding this technique, including whether or not payments made during certain periods will be beneficial to your company in any kind. So, let’s get started.
What is a payment gateway?
Payment gateway for high-risk merchants is technology that enables businesses to accept payments made by credit and debit cards from their consumers. Through the facilitation of safe digital transactions, they assist not just online companies but also businesses with physical locations. Investment in a payment gateway not only protects your company from liabilities, but it also allows you to welcome new clients by accepting payments via a variety of ways. For companies looking to scale their business, a high-risk merchant account would be the best to save the merchant from greater risk of fraud.
How does a payment gateway work?
The payment gateway procedure is straightforward—especially if you invest in the appropriate technology or service provider. The following are the stages involved in the whole process:
Step1- An order is submitted by the client. There are many options for this, including online or at a physical shop, in which case you would be placing the order for them.
Step2- The data is encrypted via the use of a web browser. The information provided by the consumer (if they are buying online) is sent securely from their browser to the merchant’s web server using SSL (Secure Socket Layer) encryption.
Step3- It is the merchant’s responsibility to transmit transaction data to the payment gateway. This is also accomplished via the use of SSL encryption.
Step4- The transaction is sent via the gateway to the payment processor. The payment processor connected with the merchant’s acquiring bank is notified of the transaction details and receives them.
Step5- Once the transaction has been completed, the payment processor transmits it to the card association for processing. VISA and Mastercard are only a few examples of card organisations.
Step6- The transaction is verified by the bank that issued the credit card. If the request is accepted, the bank will acknowledge receipt of the request and provide a response number for the transaction. If your application is denied, the bank will give a reason, such as inadequate money, to explain why.
Step7- The issuing bank provides a response code to the payment processor, which the payment processor uses to complete the transaction.
Step8- The payment processor transmits the code to the payment gateway, which then sends it to the customer.
Step9- In order to complete the transaction, the payment gateway provides a code to both the business and cardholder.
Despite the many stages involved, the whole payment gateway procedure is completed in a matter of seconds rather than minutes. It is a safe and convenient method to take payments from consumers, regardless of whether they engage with your company online or in person.
What level of security does the payment gateway procedure provide?
One of the most significant advantages of utilising a payment gateway is the high level of security it provides. According to Pixelmattic, major card associations have established a set of regulations and security requirements, known as the Payment Card Industry – Data Security Standard (PCI-DSS or PCI), that must be adhered to by anybody or any organisation that has access to sensitive credit card information. All payment gateways, in turn, must satisfy these criteria in order for the service business to connect with payment processors. If they are not authorised, the service company will not speak with them. You will be shielded from any liabilities or fraudulent transactions as long as you are utilising a secure payment gateway for your business operations.
Importance of Payment Gateway
The importance of a payment gateway to any business and e-commerce website can be explained by a variety of factors. According to a research conducted by Shape Security, 90 percent of all login attempts to online stores and companies occurred as a result of unauthorised hacking efforts throughout 2018. Payment gateways are crucial for preventing hacking efforts such as this one, and they are particularly important for small and medium-sized companies.
The following are some of the most significant benefits that both large and small companies and eCommerce sites may get from the use of a payment gateway:
1. All the alternative online payments are accepted
A payment gateway is a tool that allows merchants and business owners to accept and process payments made using credit cards and debit cards, among other methods. It also opens the door for companies to accept alternative forms of online payment that may become accessible in the future. The increased number of payment alternatives makes it simpler for company owners to meet the diverse requirements and expectations of their customers.
2. The risk of Credit Card fraud is reduced
Payment gateways are primarily intended to reduce the occurrence and potential of online payment fraud, which is why they are so widely utilised. Payment fraud is a problem that online companies and merchants often face when processing transactions that require the usage of credit cards to collect payments from consumers. Using a payment gateway, companies may benefit from specific security measures that guarantee that both the operators and the purchasers have a safe and secure means of processing information, money, and the entire transaction.
3. Smooth site surfing
Some payment gateways provide a feature that allows companies to create unique checkout pages for their customers. Customers will no longer be required to be transferred to another website when placing purchases or making payments as a result of this.
4. Customer data is in safe hands
Security and encryption of consumer information are enhanced by payment gateways. Because of the increased level of client security, it is highly recommended as an additional layer of protection against online fraud for online companies. Businesses that use payment gateways often get positive feedback from the vast majority of their consumers.
5. Easy installation and maintenance
The fact that a payment gateway may be completely automated means that it does not need frequent maintenance or a hefty installation price. The majority of payment gateways simply need companies to establish an account before the software can be activated. Frequently, further software upgrades are planned, and companies are notified when it is time to upgrade their current payment gateway.
Where to find the best Payment Gateway?
There are a variety of payment gateway service providers accessible, and it is the duty of online company owners to identify and choose the payment gateway that best meets the requirements of both their business and their consumers. Furthermore, they must consider the safety of their website as well.
Payment gateways that are reliable and efficient should be equipped with SSL certificates issued by authorised organisations in charge of validating the gateway’s credentials to operate. Payment gateways must also be PCI-compliant and adhere to policies and procedures that ensure the security and privacy of customer information throughout all transactions.
The success of an online company may be guaranteed while at the same time ensuring that client pleasure is completely satisfied by carefully selecting a trustworthy and appropriate payment gateway. In addition, business owners may develop a checklist that outlines the requirements of their company and consumers, as well as their firm’s previous errors in online transactions, if this is beneficial.
We hope that this article has provided you with a good understanding of how Payment Gateway for high-risk merchants would work. If you would like some further insight on the best payment solutions available for your business, please don’t hesitate to get in contact for a free and non-obligatory consultation.
The IBAN, in general, is that unique code that helps identify a particular bank during a cross-border transaction. You must know the IBAN of your beneficiary to ensure that you are receiving the money properly.
If you are doubtful about the IBAN or input the wrong one, it is most likely that the beneficiary bank will restrict the transaction. Moreover, you will be charged a retrieval fee against the failed transaction. In this post, we will give you details about virtual IBAN, which is more important in the era of digitisation. Besides, it is highly beneficial for high-risk businesses in the UK. Let us now dive into more details.
A virtual International Bank Account Number or virtual IBAN is a non-tangible account issued to a person to receive and send money from one country to another hassle-free.
Having an IBAN means that you do not need several bank accounts to carry out international transactions. That’s also the reason why high-risk merchants prefer to use an IBAN to make payments and receive money from other countries. Moreover, not having to maintain too many physical accounts saves so much time and money too.
Virtual IBAN- What is the meaning?
For any high-risk merchant across Europe, having a proper bank account is mandatory, especially if international transactions are taking place. However, it is often very challenging to manage international transactions using only the local bank accounts.Moreover, it is very tedious, time-consuming, and costly due to the constantly changing monetary transaction policies and total resources.
IBAN is that unique number that is part of a standardised international banking system capable of identifying overseas bank accounts. The concept of IBAN was first introduced by the ECB or the European Committee for Banking Standards.
The same body developed and also implemented the IBAN concept to make the process of international payments smoother. A proper IBAN can be divided into distinct parts that are all mandatory. The first two digits make for the country code, then there are two numbers, and the rest are 30 alphanumerical characters.
When the concept of IBAN was introduced, it was supposed to be used especially for cross-border transactions within Europe only. Gradually, other countries also started adopting the concept, which is now used extensively worldwide. Licensed under ISO 13616:1997, presently, the Caribbean and Middle-Eastern countries apart from Europe are the ones that use IBAN the most. These are also countries where high-risk businesses such as gambling and casinos are more popular.
Since virtual IBAN is merely a verification process, you will have to stop using an existing account number under no circumstances. Instead, when you require an IBAN, the bank will issue additional details that have nothing to do with your existing bank account. While IBAN is highly beneficial for high-risk merchants, it may not be the best option for organisations carrying out massive amounts of international transactions.
Each IBAN account is usually linked to a single primary account, which means that irrespective of the amount of money exchanged, all of it will automatically route to the primary account. Also, while using IBAN, one of the most difficult situations is when you have to keep track and reconcile various incoming payments made by clients sitting at multiple locations across the world. Now, virtual IBAN comes in at this point because it can sort out the various transaction sources.
An IBAN permits high-risk businesses to specify unique virtual details to receive money from various clients. This can be for specific currencies and product lines that will be redirected to a primary or master account. As a result, it is now possible for a business to carry out important transactions without the requirement of multiple physical accounts, which are highly expensive and tedious. Of course, the concept of IBAN and virtual IBAN is the same, but the latter has several benefits, especially for high-risk businesses.
What is the advantage of using Virtual IBAN for high-risk businesses?
Here is a list of the most common benefits that high-risk businesses have when using virtual IBANs.:
Setting up a business account is easier
Setting up a virtual IBAN account is basic and direct. Any entrepreneur comprehends the long and regulatory interaction of setting up a conventional account. For instance, in many nations, you must dwell in a nation to have a minimum financial balance. Such prerequisites are not restricting when managing virtual IBAN.
Improved transaction management
Your business can set up an actual solitary record and acquire numerous virtual IBAN accounts, which course to the one real ledger. Accordingly, the organisation can copy the impacts of having various records, in numerous nations, for various exchanges. You can set up virtual records for every customer making instalments, or for every instalment made in particular money, or for a particular product offering.
The business will want to get independent proclamations for each virtual IBAN, which improves on explanation compromise. Having separate articulations will empower your business to effectively find every instalment, henceforth simple investigation and recognisable proof of exchange designs.
Opening and running various records in various nations are tedious and arduous as well as expensive. Envision the kind of banking expenses a business will pay to run 20 records! It’s anything but a ton of cash.
For Instance, Smiths Autotech of India, a provider for Mercedes Benz, sells 2 million yearly to the vehicle producer, yet the bank charges are just about as high as 8% in FX.
This organisation used to lose 12% of their monthly revenue in bank fees! In any case, since they embraced virtual IBAN, the expense has extraordinarily dropped. Virtual IBAN empowers organisations to make numerous virtual records that serve practically as actual records while staying away from the high FX charges for exchanging over each instalment that comes in when utilising the account.
Virtual IBAN works with one real record. Consequently, settlement and steering of instalments are a lot quicker than in the actual record.
Security is a vital angle when managing monetary records. Having numerous records opens the proprietor to more dangers. As the administration gets dreary when running numerous real records, the shots at committing network safety-related errors also increment.
A virtual IBAN, nonetheless, is kept in redundant, encoded cloud servers. In this way, they have a generally safe of misrepresentation or vacation. The start to finish straightforwardness and isolation offered by virtual IBAN likewise make it simpler for organisations to follow Anti-Money Laundering (AML) Know Your Customers (KYC) security guidelines.
High-risk businesses that are presently using virtual IBAN have a competitive edge over others. These organisations are now saving a lot of money that would otherwise be required to maintain multiple physical accounts. Moreover, there is added transaction security now. Well, these may look like basic factors but are make or breakpoints in the industry.
How we can help you
Capitalixe is a leading banking and payments consultancy that is based in London and operates globally. With the help of Capitalixe, it is now possible for all businesses to access financial technology, payments and banking. Whether you are a start-up, a crypto, or gambling business or simply looking to enter into a new market, we have got you covered.
We leverage our network that we have with over 80+ financial institutions, EMI’s and banks worldwide.
The ultimate goal of the team here is to help take the pain away from our clients in finding a trustworthy and suitable solution that is happy to onboard their business. We understand these sectors very well and know how difficult and time consuming it can be to find a good provider.
Feel free to reach out to us for a complimentary consultation, we will be more than happy to help you.