Processors work to capture digital gambling payments
Payment processors have eyed the gambling industry as a just-out-of-reach gold mine for the past few years, especially with the expansion of online and mobile gaming, but the warning signs have always been very large.
Three years ago, Vantiv began placing its own bets on the fact that gaming operators would be looking to integrate payments technology into their services as they shift to digital channels.
Around the same time, some credit card issuers and PayPal (under ownership of eBay Inc. from 2002 to 2015) resisted the urge to jump into Web gambling despite having an early history with that market. That may be changing as PayPal seeks expansion as an independent company. CNBC reported in late 2015 that PayPal was "quietly" beginning to accept payments from online gambling sites.
In mid 2014, First Data launched PayLucky software to allow gambling forums, from racetracks to lotteries to online poker sites, to manage payments from multiple users.
Since then, it has generally been accepted by most in the industry that online or mobile gambling is a legal activity and one that isn't a particularly dangerous scenario for payment processors to engage in, even though criminals are attracted to the high-stakes nature of games of chance.
The current debate centers on the complexity of gambling payments, which tend to grow quickly and can create problems for gaming operators and payment processors to keep tabs on. Companies such as MiFinity have tried to address that with digital wallets specifically for players to store and distribute their funds.
More recently, San Francisco-based gambling app store Betcade introduced Betcade Pay to gambling operators, providing what it is calling the first mobile payment solution for gambling.
Betcade Pay also operates as a general-purpose payment method, but it is designed for mobile gambling. The service for Android devices will make its debut in the U.K. in the first quarter of 2017 when Betcade begins processing Visa and Mastercard payments. The service is offered with or without chargeback protection for the gambling operators.
Betcade, which has an office in London, will accept more than 50 global payment methods though Betcade Pay by the end of the quarter as the service expands throughout Europe, the company said.
Betcade Pay says it is an FCA-licensed payment institution and complies with the Payment Card Industry data security standards. As the payment facilitator, Betcade Pay passes payment data onto the operators, who have full autonomy with their users.
“We’ve been working closely with operators and others in the industry all along to develop our product, roadmap and business model,” David Chang, CEO of Betcade, said when the service launched this month. “Numerous operators are very positive on the payments component and have been asking to use the technology separately, so we have decided to make Betcade Pay available as a distinct product."
Not only will Betcade Pay help facilitate payments for operators and users, it will help drive higher key performance indicators and offer competitive pricing structures for operators, Chang added.