For numerous reasons, many financial institutions have considered the online gaming industry as an industry which involves great financial risks.
There are more than 25,000 platforms for online gaming that generate an overall worldwide revenue of USD $40 billion. Given the regulatory and the legal environment that surrounds online gaming, it is crucial for online gaming companies to address all the risk factors so that the industry can mature.
If you’re interested in online gambling or gaming, it is good for you to think about how the websites are keeping your payment information safe.
Payment options available for online gaming websites
Operators of online gaming websites need highly comprehensive solutions because of the high value and high frequency of transactions they take care of. Transactions involve people from various geographies, and each country has different regulations and laws.
Unlike all other e-commerce businesses, online gaming companies operate in an environment where transactions are two-sided. Money is continuously being paid out and received thus making the payment information and the payment process more vulnerable.
How is the payment information of the players handled?
Considering the constantly evolving regulatory and legal landscape of the online transaction industry, there isn’t any standard set of available options which is why many online gaming websites accept many types of payment.
Payment through Bitcoins and prepaid cards are two common options; however, the most popular and simplest payment method for operators, as well as players, is credit cards which bring along many risks.
Digital e-wallets provide better protection and are a recent payment option which is why they are being increasingly adopted in the online gaming industry.
Risks faced by operators of online gaming companies
Operators of online gaming companies face all the risks that eCommerce businesses face. In fact, because of the dual nature, the gaming websites are more vulnerable. Regardless, online gaming websites are at a risk of money laundering, theft of customer’s payment information, and other financial crimes.
The frequent use of cards raises many access and authorization issues. Criminals try to use the stolen credit card numbers which consumers use to their advantage by committing a crime called friendly fraud.
For a friendly fraud to occur the consumer uses the credit card details to wager; however, they later claim that the charges from a game were unauthorized. So, the consumer did lose money; however, he or she can win a chargeback by telling the card company that the payment wasn’t sanctioned by them.
How can the company combat the latest threats?
It is expected that more access-focused features and validation will be introduced soon. For instance, an emerging technology; the visual card functionality requires the player to take a picture of his or her card for authorizing it for playing. After the authorization, the player will be able to use the e-wallet or load funds.
Due to all these involvements, the gaming website will be able to protect the payment information of the customer better. Protecting the players and the platforms from crime must be a priority of all the websites in the online gaming industry. So, using digital wallets can greatly reduce the vulnerability of the gaming platform to fraud.
Also, gaming websites urge players not to give out their payment information to other players themselves.