Despite the importance of affiliates in the sports betting industry, many still struggle to open suitable business bank accounts or receive payments. Elona Attard, Head of Operations at payment solutions provider Xace, explains how the company is addressing these challenges via its Premium Affiliate Accounts. 

Affiliate businesses are the unsung heroes of the online sports betting industry. From small ‘one man band’ tips websites through to major content platforms, they are reportedly responsible for between 60% and 80% of the traffic that arrives on igaming websites. However, despite their importance to the industry, they get very little recognition. 

Think of affiliates as like the defenders in a soccer team. In this analogy, betting websites are like strikers who get all the glory. Meanwhile, the defenders who feed the ball through to them get much less attention – even though the strikers couldn’t score goals without them. 

And this lack of attention means many affiliate websites are underserved when it comes to payments too. Reliable statistics about the industry are hard to come by, but one study found that two thirds of affiliates have experienced difficulties receiving payments from customers. What is more, many of these perfectly legitimate companies struggle to open a business bank account. 

What is happening in this situation? Why are these crucial industry players receiving such inadequate service? At Xace, we collaborate with numerous sports betting affiliates and have gained valuable insights into the challenges they face in receiving payments from their customers.

One of the primary obstacles they encounter is the financial services providers’ limited understanding of the affiliate industry. Most traditional banks, as well as digital-first fintech businesses, possess minimal knowledge about the workings of the affiliate industry. 

Despite being a relatively low-risk sector with distinct differences from actual betting websites in terms of anti-money laundering (AML) and know your customer (KYC) requirements, financial institutions often assume these businesses are high risk by association. Consequently, banks and payment providers hesitate to offer services to them.

There are, of course, legitimate concerns for banks and payment institutions when working with affiliate websites. If the affiliate does not comply with advertising rules in one particular country, or if it actually does engage in some kind of fraud, then the bank could face financial penalties or reputational damage. Judging the risk here comes down to knowing about the industry – experts can spot a ‘dodgy’ affiliate website a mile away and vet them out. 

Another challenge for affiliate businesses is that they tend to have particularly niche requirements that most traditional bank accounts and payment institutions simply don’t support. Many affiliate businesses will usually be receiving payments in multiple currencies from sports betting sites in several different countries – as well as from their international subscribers. 

They’ll potentially receive payments via less common methods (such as e-wallets) too, and some will even receive payments in crypto currency. There are very few standard business bank accounts that can accommodate the kinds of payments that affiliate companies deal with. 

Finally, as noted above, many affiliate businesses encounter problems getting paid by sports betting websites. 

More often than not, this is because the sports betting website struggles to make payments from their bank account to the affiliate company’s own account – due to currency exchange issues, FX fees or some other compatibility issue. This leaves affiliate businesses out of pocket. 

At Xace, we have decades of combined experience in accountancy and money management for businesses in the online gaming industry. Working with affiliates in the sector we’re aware of just how difficult it is for these companies to receive the payments they’re due. And this is why we recently launched our Premium Affiliate Accounts.

The service is designed specifically for the needs of affiliates in the igaming industry. We built the accounts so that sports betting affiliates can receive payments quickly, easily and securely from betting websites around the world. The UK regulated accounts accept payments in 28 major currencies (and we offer FX solutions for payments in other currencies), as well as crypto payment options too. 

Our Premium Affiliate Accounts are easy to use and provide handy features such as multi user access and personal accounts for directors and upper management. And with our extensive knowledge of the igaming industry, our expert teams are well placed to judge risks.

Given just how important affiliates are to the online sports betting industry, it’s surprising just how difficult it can be for them to receive payments. By making it possible for sports betting affiliates to receive payments swiftly and efficiently from all the betting sites they work with, we’re aiming to meet a genuine need in the industry –  and recognise the value that affiliates bring.