How Online Casinos Handle Payments
Online gambling was valued at over $150 billion in 2019. Buoyed by strong growth in demand for online entertainment during the 2020 global COVID pandemic, the online casino industry is on a purple patch. Estimates indicate that the industry could expand to over $250 billion in transactions by 2025.
Make no mistake – that is a lot of money in the online casino business. Given the largely anarchic nature of the internet, money like that can attract a lot of attention. For players, this raises significant concerns regarding the safety of transactions at online casinos.
So how do online casinos make sure our money is safe? Let’s examine some basics.
The Basics of Payments at Online Casinos
An online casino is an entertainment platform where you create an account, deposit money into that account, and use it for gambling purposes on the games available on the platform. The casino operator has two core concerns when it comes to transactions – speed, and security.
The importance of speed cannot be overestimated from an iGaming perspective. Instant gratification is one of the main attractions of online casinos. You can play whenever you want, unlike land casinos which often require considerable planning and travel.
This also means that online casinos always favor digital payments. This includes internet banking, online use of credit/debit cards, e-wallets, prepaid vouchers, and even cryptocurrencies. Using these methods at a casino is identical to using them for online shopping.
As a rule, deposits tend to be instantaneous at most casinos, allowing players to start betting in a matter of minutes. But withdrawals are much slower, owing to safety and security concerns. Almost all casinos enforce a delay for the processing of withdrawal requests from players.
How Safe are Online Casinos?
In many parts of the world, gambling is considered a high-risk, restricted or prohibited activity. But in many other countries, it is also fully legal and subject to varying levels of oversight and regulations. In general, online casinos serving regulated markets tend to be safer by a huge margin.
This is due to licensing requirements. For example, if a casino wants to legally accept customers from the UK, it needs to get a gambling license from the UK Gambling Commission. And to qualify for this license, the casino has to maintain high standards in a variety of fields, including online data safety, and financial security.
If a casino fails to comply with safety regulations, it faces the prospect of heavy fines or even the revoking of the license itself. As a result, legitimate online casinos take safety seriously when they are licensed by major authorities like UK GC and the Malta Gaming Authority.
Importance of Secure Accounts and Encryptions
Creating a secure gaming platform with limited access is the first step. Only casino operators and verified players should have access to the website. This is achieved by enforcing a strict registration and customer verification policy.
All players who wish to deposit money and bet on the games are required to create a player account. Usernames and passwords are required every time a player visits the casino. And all communications between player devices and the casino servers have to be encrypted.
This step is crucial, as most instances of online financial crimes occur when someone manages to gain access to a private account (either through hacking or other tactics like phishing). High-level 128-bit SSL encryption serves as an effective counter to hacking.
All data sent to and from the casino is converted into complex code that is very difficult to crack. This end-to-end encryption ensures that payment information or personal details about the casino customers are safe and secure.
Why KYC and Security Verification are Important
From a safety perspective, withdrawals are more vulnerable than deposits at casinos. Using phishing, malware, or other social engineering tactics, criminals can gain access to usernames and passwords. In the absence of security checks, anyone can then login and withdraw funds from their victim’s account.
Online casinos use several rules to counter this threat. For starters, there is a cooling period or delay between a withdrawal request and the transfer of funds. And casinos generally do not allow players to withdraw funds to any new account – you have to use the same card/e-wallet/bank account to receive the money whenever possible.
These steps ensure that criminals cannot just log in and quickly take off with your money at an online casino. And it does not end there – many casinos also use mandatory KYC checks before they process payments. It is something simple, like sending a copy of your ID and bank/card info, to ensure that the withdrawal request was indeed from an actual customer. Know Your Customer (KYC) checks are also mandatory due to money laundering laws around the world.
The Importance of Trusted Payment Partners
All the steps mentioned above are within the control of the casino operator, as they occur on the gambling platform. But casinos do not handle payments – those are outsourced to established providers like VISA, MasterCard, banks, Paypal, Skrill, and Neteller.
When you select the desired payment method, you are taken to a secure payment gateway operated by one of the companies mentioned above. These are all global brands with hundreds of millions of customers – the more reputed a payment provider, the safer your money is.
There is one notable exception to this rule, and that is cryptocurrency. But given the questionable legal status of bitcoin and other alt-coins in many countries, online casinos are often unable to provide cryptocurrency as a payment method.
It’s all about best practices
There is no doubt that online payments are safe, as long as you follow certain precautions and best practices. Chief among them is using payments only on legit and reputed sites. There are plenty of reputed iGaming sites available in 2020. Your money should be perfectly safe at these online casinos. After all, they use the same payment partners as other eCommerce businesses like Amazon, eBay, Alibaba, and Google!