Overcoming iGaming Payment Processing Barriers
The global iGaming and fintech sectors have expanded rapidly, with businesses targeting international markets to serve a broader customer base. However, offshore-licensed gaming operators frequently face barriers when seeking reliable banking and payment processing solutions.
Financial institutions and Payment Service Providers (PSPs) are often cautious due to:
- Regulatory Scrutiny: Gaming is tightly regulated, requiring enhanced due diligence.
- Risk Profile: Transactions can involve higher chargeback ratios, fraud, or money laundering exposure.
- AML Requirements: Strict anti-money laundering obligations discourage risk-averse banks.
To overcome these challenges, many businesses establish a Cyprus Payment Processing Agent Company (CPPAC). Acting as an intermediary, a CPPAC leverages Cyprus’s EU membership, favourable tax regime, and strong financial framework to connect operators with banking and PSP partners.
What is a Payment Processing Agent in iGaming?
A payment processing agent company serves as a link between an iGaming operator and licensed financial institutions. Its functions include:
Facilitating Transactions
Agents forward player deposit or withdrawal instructions to a licensed PSP, which executes and settles the payment.
Administrative & Reconciliation Functions
Funds may appear in designated accounts under the agent’s name but remain under the control of the operator. The agent does not independently manage or profit from these funds.
Compliance & Risk Management
Agents provide AML/CTF monitoring, fraud prevention, and transaction oversight, ensuring operators meet strict regulatory standards.
Operational Integration
Systems are integrated with PSPs for seamless data transfer, transparent record-keeping, and real-time monitoring.
Key Insight: The agent facilitates and coordinates payments, while the PSP handles execution—ensuring compliance and reducing risk.
Setting Up a Cyprus Payment Processing Agent Company
Forming a CPPAC involves structured planning, regulatory compliance, and financial preparation.
1. Company Formation & Legal Structuring
- Name Registration: Approval from the Cyprus Registrar of Companies.
- Memorandum & Articles of Association: Must outline facilitation services, ensuring the CPPAC is not classified as a PSP or EMI under PSD2.
- Official Incorporation: Usually completed within 1–3 weeks.
- Tax Planning: Benefit from Cyprus’s 12.5% corporate tax and extensive double tax treaty network.
👉 Proper structuring positions the CPPAC as a commercial agent, avoiding unnecessary licensing burdens.
2. Corporate Governance & Substance Compliance
To prevent shell structures, Cyprus enforces substance requirements to ensure genuine economic presence.
- Directors & Secretary: At least one director and a secretary are required; appointing a Cyprus-based director improves credibility and tax residency.
- Registered Office: Legally required for official correspondence.
- Local Presence: Employing staff, leasing offices, or managing operations locally enhances acceptance by regulators and financial institutions.
3. Banking & Financial Setup
Securing reliable banking remains one of the most complex steps for iGaming operators.
Corporate Bank Accounts
- Partner with EU banks experienced in iGaming.
- Prepare KYB (Know Your Business) documents, including incorporation papers, AML policies, and business plans.
- Align internal compliance procedures with bank standards to reduce onboarding delays.
Multi-Currency Accounts
- Set up accounts in EUR, USD, GBP, and other currencies to handle global transactions efficiently.
- Minimise forex risks while streamlining cross-border payments.
4. PSP & Merchant Account Onboarding
To process payments effectively, a CPPAC must establish relationships with licensed PSPs.
- Merchant Account Applications: Highlight the CPPAC’s intermediary role and offshore license details.
- Payment Gateway Integration: Ensure technical and legal compatibility with gaming platforms.
- Compliance Maintenance: PSPs conduct regular reviews—operators must maintain AML and risk policies to prevent service interruptions.
⚠️ Note: Since CPPACs do not directly process or hold player funds, they typically do not require a PI or EMI license under PSD2.
Key Benefits of a Cyprus Payment Processing Agent
- EU Recognition: Strengthens credibility with banks and PSPs.
- Tax Efficiency: 12.5% corporate tax plus double tax treaties.
- Regulatory Transparency: EU-aligned legal framework reduces reputational risks.
- Substance Compliance: Tangible presence builds trust with regulators and financial partners.
- No PSP License Needed: Operates legally as a commercial agent without requiring a PI/EMI license.
Next Steps: Setting Up Your Cyprus Payment Agent
A Cyprus Payment Processing Agent Company is an ideal solution for offshore iGaming operators needing dependable, compliant, and cost-effective access to financial services within the EU.
When structured properly, a CPPAC provides:
- Access to secure multi-currency banking.
- Seamless PSP onboarding and payment gateway integration.
- Compliance with AML and EU regulations.
- Credibility with stakeholders and regulators.
- Operational freedom without licensing burdens.
Final Takeaway: By setting up a CPPAC, iGaming operators gain financial stability, credibility, and compliance—all while ensuring efficient international payment flows.