Payment certainty and the future of online gambling
Online gambling is built around immediacy; a player can open an account, make a deposit, and start playing within minutes. This convenience has helped transform the industry, but it also creates a difficult commercial and regulatory balancing act.
Gambling operators must decide just as quickly whether or not to accept the player’s deposit. And if they get those decisions wrong, the consequences can be significant – if a fraudulent deposit gets through, the money may already have been played by the time the fraud is reported. But what about the genuine player whose deposit gets blocked? If they leave, a good player may be lost forever.
This is a familiar challenge for anyone involved in online payments, in any sector. But in gambling, where transactions are closely tied to the customer experience and funds can be used immediately, the stakes are particularly high.
The cost of getting it wrong
The gambling sector has spent years investing in ways to make better decisions about payment risk. Fraud detection systems have been increasing in sophistication, drawing on device information, transaction patterns, customer behaviour, and any other data signals that can be used to identify suspicious activity. Authentication technologies have also been deployed to provide additional guardrails to strengthen identity verification and account security.
These are all important advances as they provide some protection for gambling operators and customers in an environment where fraud is a constant and evolving threat. But there’s another commercial reality that’s quite uncomfortable: the more caution an operator applies to a transaction, the greater the potential to disrupt a genuine customer’s experience. And sometimes, that caution results in a legitimate transaction being flagged as suspicious. I’m talking about false positives.
A customer who is asked to undergo additional verification steps may still complete the payment. Or they may get frustrated and abandon it. Conversely, a legitimate customer who looks unusual and has their payment blocked represents far more than just a declined transaction. It means lost revenue, a frustrated customer, and damaged reputation. The cost of the payment risk therefore isn’t just about fraud losses and chargebacks; it’s also about the business that never happens because legitimate customers cannot complete their payments.
When security becomes a competitive issue
The gambling industry competes on experience, and operators invest heavily in intuitive platforms that offer fast onboarding, compelling products, and seamless customer journeys. Yet payments can often be a point of tension.
Today's consumers are savvy. They've grown accustomed to immediate, straightforward digital experiences, shaped by businesses that have made convenience central to their success. But gambling operators must balance these expectations with increasing pressure to demonstrate that their platforms are secure, their customers are appropriately verified, and their payment controls are effective.
Neither expectation is unreasonable. But they can be at odds with one another. The difficulty is that the measures designed to protect the business can sometimes work against the experience the operator is trying to deliver. And while the industry has become adept at assessing transaction risk, it is worth exploring whether there are opportunities to reduce some of that uncertainty.
Is there another way to think about payment security?
Much of the evolution of online payment security has focused on making better predictions about whether a transition can be trusted. That approach has delivered real improvements, but fraud techniques are also evolving. And as customer expectations also increase, there is a broader question worth considering: what if the next opportunity isn’t simply to make better predictions around payment risk, but to establish stronger evidence a payment is genuine?
This is a distinction that has implications well beyond fraud prevention. Greater confidence at the point of payment would help gambling operators make better decisions about genuine deposits, reduce the need for intervention, and reduce some of the operational costs associated with managing uncertainty.
For an industry where customer experience, regulatory obligations and commercial performance are so closely connected, that’s a conversation worth having.
A different approach to online payments
One way to address this challenge is to change the nature of the payment itself. What if the established security of card present payments could be brought into online environments, with the physical card playing a role in authenticating the transaction?
That's the thinking behind Card Present over Internet (CPoI®). It enables genuine card present payments in online channels, with customers simply tapping their physical card on their own mobile device and securely entering their PIN, the same as they would in-store.
For gambling operators, this opens up the possibility of greater certainty at the point of payment, with the potential to reduce fraud and chargebacks, approve more genuine deposits and deliver a more straightforward payment experience.
Beyond the odds
Our new white paper, Beyond the Odds: Moving payment security for online gambling from prediction to proof, explores these issues in greater depth.
From the commercial consequences of payment uncertainty to the limitations of conventional online authentication, it examines why a different approach to payment security deserves consideration, and what that could mean for the future of online gambling.
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