Unlike the traditional merchant transaction processing environment, the delivery of cash access services, and the products through which they are delivered, need to meet extremely high standards of reliability and efficiency in order to handle the high transaction volume of the casino gaming industry.
Gaming Industry:
The overall US gaming industry operates in over 40 States and generates an estimated $90 billion in revenue (Data: American Gaming Association). Cash access services are present in numerous venues, which include the traditional casinos of Las Vegas and Atlantic City, Native American Casinos, Riverboat Casinos, Pari-mutuel Race Tracks, and Card Rooms.
Cash access products play a mission critical role for gaming operators with an estimated 70% of gaming revenue being derived from such services. Most gaming operators rely on outsourced third party companies like Sightline Payments LLC to provide these services to their patrons. We estimate the North American (on an annual basis) Gaming Cash Access market to be $25 billion dispensed to patrons and over 100 million transaction approvals, generating an estimated $950 million in revenue for the industry.
The largest provider of these cash access services includes Sightline Payments (PRIVATE: Sightline), Global Cash Access, Inc. (NYSE: GCA), Global Payments Inc. (NYSE: GPN) with an approximate combined 90% market share. The remaining 10% is divided amongst other providers including Money Centers of America (MCAM.PK), DiTronics Financial Services, and ASAI.
Here is a description of the common types of Cash Access Services found in a casino:
• Credit Card Cash Advances (Smart Station Advances): Credit card cash advances enable a gaming patron to access funds up to a specified limit set by the card-issuing bank. The consumer fees average about 6% of the amount requested.
• Debit Card Cash Advances: POS debit card transactions are processed much like a regular merchant transaction, whereby a patron is able to access funds up to the cardholder’s purchase debit limit, which is usually higher than the daily ATM limit. The consumer fees average about 3.5% of the amount requested.
• ATM and ATM3X: A patron can withdraw funds directly from his or her checking or savings account subject to a daily limit average of $300. The consumer fees average about $4.00 per transaction requested. A recent phenomenon throughout the industry is the migration of ATM services onto Glory, NRT, and Western Money Ticket Redemption and Bill Breaking Devices.
• Check Cashing (Certegy and Global Payments): Check verification, processing and guarantee services, enables the cashing of patron checks at the casino cashier. Generally there are no fees to the consumer, but, in certain geographic regions the fees can be upwards of 6% of the amount requested.
• Markers and Gaming Credit: Casino establishments subscribe to credit bureau services to obtain detailed credit information for the purpose extending markers or credit to patrons. Generally these services are reserved for a casino’s “high end” players and there are no fees to the consumer.
The principal costs and expenses of Cash Access Services include:
• Casino Commissions: For cash advance, ATM and check cashing transactions, service providers pay a commission to the gaming establishment at which the transaction occurred.
• Interchange and Processing: Service providers pay credit card associations like Visa and MasterCard interchange fees for services they provide in settling transactions routed through their networks. In addition, fees are paid to participate in various ATM and credit card networks. The amounts of these interchange fees are fixed by the card associations and networks and vary base on the network and the amount requested. Connectivity and processing fees are paid to those companies that provide the service providers with network services.
• Check Cashing Warranty: Check cashing warranties relate to the costs incurred in connection with dishonored checks that are warranted.
• Operating Expenses: Operating expenses consist primarily of salaries and benefits, armored carrier expenses, the cost of repair and maintenance on the cash access devices.
• Interest Expense: Interest expenses in connection with the procurement of currency to fund the operating requirements of the ATMs.
Archive for Payment Systems
Casino Payment Systems – How They Differ From Traditional Payment Systems
Shop Safe With Secure Payment Systems
The internet is a fast and rapidly expanding business that the world has embraced and warmed to with open arms. It is the source of all knowledge with people more likely to refer to the internet than text books to find answers on history, cooking or hundreds of other topics.
With it has come the opportunity to purchase just about every worldly object from the many, many pages that make up the World Wide Web resource. Initially people were skeptical about purchasing off of the internet as there were very few secure portals and payment systems and there was far less browser protection.
Thankfully the world and more importantly the developers have managed to wise up to the possibility that people want to purchase products from this resource and are constantly spending time and money in an effort to make more secure payment systems for people to use.
If you make your internet purchases with certain companies or brands these days then you will be asked security questions or for a password to ensure that the person making the purchase is actually the card holder. This is just another example of how card companies are getting their own back at the card thieves who have managed to cost them hundreds of thousands of pounds over the course of the last few years.
The web developers have also been hard at work when it comes to making online banking more secure, lots of people choose to use the internet to transfer money or make payments to their credit cards these days, because of this developers have had to make ever more complex payment systems a protection systems to keep the users accounts secured from the credit thieves.
It is amazing how quickly these technologies move forwards it was only five years ago when people were still logging on to sites with reduced encryption rates and basic protection. Now thanks to the lessons learned the new payment systems include the three digit security code, password protection and 256 bit encryption.
What the future hold no one knows, but as with the way of the world as quickly as people make things, someone else will attempt to break it, this does help with the evolution of the payment systems though so how we will be paying for our online purchases next Christmas is anyone’s guess. All we do know is that thanks to the ingenious work from the web developers it’s now safe to shop online.
Internet Payment Systems
You may have just completed your sales letter on your web
site and preloaded your autoresponder with your messages.
However you may not have thought about which internet
payment system to use with your web site. If you are
selling an ebook or downloadable software there are many
options that you may want to consider depending on the
product that you are selling. The most important thing
being that you want to make it easy for your customers to
order within three clicks and also want to protect your
software if you are selling shareware products from being
pirated.
My favourite credit card processing system to use is Paypal.
The reason for this is that many people will only buy
online using this method. They already have their credit
card details stored in Paypal and are too lazy to type it
in again. Regardless of what you read about Paypal if you
are not using this on your web site you are losing sales.
My second favourite method for credit card payment is
2Checkout. The reason for this is that once you have
submitted your application and paid the processing fee you
could literally be up and running within minutes. They make
it that easy for you to get setup. However, you still need
to have scripts which do the back end for you like
downloading ebooks etc…
If you are selling software using the shareware method you
may want to use payment systems like SWREG where they also
help you to protect your software. There are other payment
options like Kagi where you set up a Kagi store and the
administrators help you with the back end where they
customize your storefront and allow buyers restricted
access to download your products. Sometimes getting the
back end scripts to work with your payment system can be a
real pain and if this saves you all that trouble it may be
worth a look.
When you implement your payment system you need to test it
and make sure that it works with your back end. Also try to
offer many different payment options as possible as many
people do not use credits. The more options you offer like
money orders and telephone billing you can increase your
sales by twenty percent.