The past few years have been a game-changer for the gambling industry. Through digitalization, the betting market witnessed a growth of around $63.53 bn in 2022, according to Grand View Research. The same study predicts that the industry can rise to $153.6 bn by 2030. Easy access to gaming through smartphones has been a key differentiator for this tremendous growth rate. However, the boom in online gambling also increased the chances of cybercrime.
Thus, a fear of fraudulence still makes many gambling enthusiasts wonder are payment processors regulated. Problems do exist. However, payment processors and gambling merchants leave no stone unturned to manage the roadblocks. Let’s dig deep to understand the future of online casinos.
Massive Gap in Global Gambling Regulations
The online betting market sees no boundaries. However, there is a massive gap in gambling laws from one country and state to another. So how is online gambling regulated in different parts of the world?
To date, there’s no global regulation for the online gambling industry. For instance, the UK Gambling Commission ensures that real money casinooperators in European regions strictly follow the KYC (Know Your Customer) format. Before signing up on betting sites, this identity verification process reduces the risks of various scams, including money laundering. On the other hand, online sports betting regulations vary in each US state.
Varied laws worldwide became an additional challenge for payment processing service providers. Thus, compliance solution providers focus on facilitating specifically designed services for different online betting markets.
Chargebacks Claims by Players
Users can often request chargebacks for fraudulent payments, dissatisfaction, and non-receipt of services from the service providers. Buyer’s remorse is common when the user bets and loses more money than expected. Gambling businesses usually lose the unending argument due to a lack of track.
Thus, online casinos and sportsbooks are more susceptible to repayment of chargebacks to a bank, Paypal, or credit card company for a disputed transaction. Claims against gambling companies can highly impact the reputation and revenue of online merchants. Hence, it’s vital to implement robust security systems and disciplinary practices by partnering with proficient payment processors specializing in high-risk processing.
These third-party solutions for fraud prevention can help gaming vendors manage the complex regulatory environment. Fiserv, Fraugster, and Global Primex are market players regulating global payment processing systems for real money online casino operators. They can monitor and get insight into potential defrauding transactions to take on-time action. Eventually, saving gambling platform operators from unnecessary chargebacks.
Fraud Detection Strategies
Optimum payment security enables regulated gambling sites to build reliability in the industry. To tackle online fraudulence issues, digital payment methods are ideal solutions to suffice both customers and regulators.
Tokenization technology used in digital transaction processes mitigates the risk of data breaches for users. It converts the card number into a token, which replaces sensitive banking data with random identification symbols. Hence, hackers can’t gain access to players’ data. Besides, gambling merchants don’t need to comply with the PCI DSS (Payment Card Data Security Standard).
Unlike traditional banking options, digital payment systems like Cash App allows convenient payments in most online casinos. Moreover, it ensures high-level security for gamblers during online transactions.
Further, payment processors can get a complete picture of the transaction with AI and ML-powered solutions. It allows them to analyze abnormal behavior patterns indicating fraudulent activities, such as money laundering.
Striking the Right Balance Between Convenient and Problem Gambling
Players can seamlessly deposit or withdraw payouts with just one click using digital payment gateways. However, businesses usually find it challenging to offer a convenient payment method while protecting players from problem gambling. Responsible gambling plays an integral role in providing a balanced experience to gamblers.
AI-powered payment systems changed this scenario as well. The technology makes transactions easy to track and notifies site operators of any problem gambling signs, like frequent betting. Thus, AI won’t just improve the transaction process but will also help manage players’ behavior.
The online gambling industry is growing exponentially, but it comes with a price. With the currently existing problems in the gambling sector, fortifying against fraud is crucial for payment processing companies. Leveraging the latest technology that adheres to security compliances is a road to building credibility worldwide for gambling businesses.
Both merchants and consumers need access to highly efficient, secure, and reasonable transaction systems. If not, thriving will be impossible for the industry.