Payment systems’ chargebacks and commissions for gambling operators
Every gambling operator strives to choose the ideal payment system. When making that choice, consider various points, such as the ability to make chargebacks, commission size, reputation, etc. Forethought prevents many potential problems.
Online casinos chargebacks
Chargebacks are extremely important to an online casino’s reputation. Too often do we hear scandalous reports about casinos refusing to refund their clients, leading to allegations of fraudulent activity. Let us take a closer look at why these things happen.
Quite often, a situation arises where a person loses their credit card. A fraudster can then take possession of it and start playing in an online casino. In such a case, the cardholder may apply to the bank with the request to cancel certain payments. In an ideal situation, the bank contacts the casino, which, in turn, checks all the data and refunds the money.
Transactions can be canceled for several reasons, such as:
- The bank refused to process the payment as there were not enough funds in the player’s account to pay for the purchase;
- The casino has reason to believe that the player is trying to make a fraudulent transaction;
- The user stated that they did not make the purchase;
- The player did not authorize the purchase;
- The user’s account was compromised, and someone else made the purchase without the owner’s consent;
- The casino made an error processing the transaction.
If an error occurs, the player must contact technical support for help with refunding the payment. Licensed casinos will not refuse a fair request from the player, since they care about their reputation.
Why are some casinos against chargebacks?
Not all casinos welcome chargebacks as there is a considerable number of users trying to deceive gaming establishments. According to certain statistics, 1 out of 20 accounts are created by scammers.
They might use malware, such as viruses, Trojan horses, and worms to deceive the casino. These allow them to score unfair wins or withdraw money from other players’ accounts, then seek chargeback assistance.
It is worth noting that casinos are not the only type of service that has to deal with fraudulent chargebacks. It also applies to online stores and various other platforms that provide internet services.
Anti-chargebacks measures used by casinos
As was already mentioned, many casinos consider chargebacks to be risky, so they do everything to deny them. Among the easiest ways to identify scammers are:
- The gambler pays with the same card but from different IPs and devices. For example, one payment can be allegedly made from home and another from a café;
- The player plays from the same IP but with different cards. Suspicions arise even if the gambler is the legal holder of all these cards;
- Casinos, issuing banks, and gamblers are registered in different countries. This filter works by default if the player is an online casino from Russia.
Once the casino proves that a player is a scammer, it can block their account.
Today, there are 2 popular chargeback dispute services — Chargebacks911 and Ethoca.
Although some casinos are willing to refuse chargebacks, in most cases they will still have to pay the required return amount. The truth is that other business types also lose a lot of money due to theft and fraud (in some cases, large retail chains lose up to 9% of their profits), but they do not cover these calculations due to neglect of consumer rights.
Fees and commissions
When choosing a payment system, casinos should pay great attention to their fees and commissions.
Every payment system sets its own fees and commissions. The less money a casino spends on paying for the payment system services, the faster their business will grow.
It is worth noting that most payment systems with good security and favorable conditions charge a reasonably high fee for their services, while a low cost may only get you relatively lousy data protection.
Most casinos operate on the territory of several countries, creating the need for constant currency conversion. Many payment systems provide this service, but one needs to monitor the rates as well as keep in mind related fees and commissions. Some payment processors offer subscription fees to help casinos cut costs for high conversion volumes.
Of course, every payment system sets its own rules of cooperation, and finding a system that is perfect for your business can be tricky. We have previously reviewed the top 5 payment systems, as well as their commission rates. This information may once again come in handy here.
Reputation and public issues
When a payment system has been operating on the market for a while, the opinions and feedback about its services are beginning to pile up. This is colloquially known as “reputation.”
The better the reputation, the more popular a payment system becomes, and the more casinos are willing to work with it. At the same time, a terrible reputation will make the service lose customers.
Several things can affect a platform’s reputation:
- Work experience. The longer a payment system operates on the market, the more confident everyone feels about it;
- Reviews. User feedback regarding their experience with a particular payment system appears on different websites;
- Partners. If a system works with successful brands, they and everyone else will grow to trust it;
- Safety certificates. The level of security is fundamental when choosing a payment system. Working with Visa and MasterCard, for example, requires that the system complies with the PCI DSS standard;
Many casinos tend to use debit and credit cards. Popular platforms only cooperate with systems that comply with the PCI DSS standard, which was developed by the Payment Card Industry Security Standards Council (PCI SSC) and established by international payment processors such as Visa, MasterCard, American Express, JCB, and Discover.
Certification directly depends on the gaming platform’s architecture’s creation and development. A modern online game is an extensively distributed program that runs on numerous servers in different parts of the world. In other words, almost all online games are based in cloud technologies.
Among providers of such ready-made cloud solutions, the most popular are:
- Amazon AWS;
- Microsoft Azure;
- Google Cloud Platform.
The software must perform several functions — monitoring events, keeping the critical data integrity, as well as identifying and blocking network attacks.
The system should conduct regular tests and moderation to identify possible vulnerabilities.