Never has an issue troubled the online gaming industry like the crackdowns recently implemented by banks and credit cards when it comes to buying chips and coins to play your favorite games. Over 400 credit card issuing banks across the World, most in the United States, have begun blocking code 7995 – the code given to online gaming transactions. MasterCard has announced they will no longer allow third party processors (such as PayPal and FirePay) to process MasterCard transactions. Worst of all, industry experts expect it to get worse before it gets better. What can be done?
On Wednesday, May 15th, 2002, a large group of concerned industry members crowded into a small room at the River City Group’s 2002 Global Interactive Gaming Summit to hear Melody Wigdahl of Glenkirk West, Mario Wells of iGlobalMedia, and Charles Crawford of Crown Services discuss payment problems and the potential solutions to them.
“IT’S GOING TO GET WORSE BEFORE IT GETS BETTER …”
It was Crawford, also of the IGC Payments Policy Working Group, who first made note of the staggering number of mostly MasterCard-issuing American banks that had begun blocking online gaming transactions – 400 and counting, including notice that Citibank had joined the group only hours earlier. With MasterCard also ceasing their relationship with both PayPal and FirePay, the latter had also announced “you can no longer fund your FirePay account with Visa or MasterCard.” Crawford noted he expected “the problem to get worse before it gets better” due to a new Visa policy of charging a $25,000 per incident fee to organizations that did not properly code their transactions, thereby making it near impossible for an operator to not transfer payment requests as 7995.
Mario Wells followed up by stating that, only a few months earlier, credit cards had amounted to over 90% of the financial transactions at the casinos using iGlobalMedia software, also noting that chargebacks were the “bain of the industry”. Attempts at sending requests that were not coded 7995 had seemed successful for some time until Capital One, a large American bank, discovered the improper partial coding and reversed the charges. Coupled with the fees associated with chargebacks, they were on the hook for over $500,000. The lesson he offered was perhaps not what the casino owners had wanted to hear – always code 7995, as the penalties far exceed the benefits. He continued that through their efforts to encourage deposits using PayPal, FirePay, ACH, Western Union, and electronic checks, they had significantly reduced the percentage of transactions attributed to credit cards.
Melody Wigdahl finished up by first reiterating Mario’s comments that improperly coding transactions as a short-term fix could cost far more in the long run, and continued the recurring theme of coding properly. However, she also went over the future and the solutions to the payment problems plaguing the industry. She noted that Visa not only did not seem to be following in MasterCard’s footsteps, but was also developing the “Verified by Visa” program, “a customer registration and site certification program to be implemented … with the goal of making ecommerce safer for all involved.” She continued that the most promising of the solutions to payment problems come from ‘alternate payment solutions’, such as pre-paid debit cards or online and electronic checking systems. Her closing comments were positive and challenging:
“The entrepreneurial spirit that invented this industry is now hard at work again – this time reinventing existing payment solutions technology. Some of the most creative minds that pioneered online gaming have now turned their efforts towards overcoming the current payment issues facing us.”
Taking your money and placing it in account for real-money Judi Slot Online games of chance and sports betting has become far too difficult. Operators are having trouble providing you the service, and organizations such as MasterCard are making your decisions for you. Attempts to reinvent the deposit procedures have thus far been met with only nominal levels of success – so how do players and providers take control? MasterCard users can switch to Visa, who has thus far been far more lenient in allowing properly coded credit card transactions. We can all adopt the new technologies as they become available. There is no excuse for a software provider or E-cash supplier to not offer methods such as PrePaidATM/Debit, PayPal, NETeller, and even items such as ACH or a form of electronic check processing. Players need to support these methods and allow them to thrive. Online gaming helped revolutionize ecommerce and the use of credit cards online – now at least one of these credit cards is telling you they no longer want your business. Only by playing smart and hitting them where it counts – on the bottom line – can you take back the ability to make your own decisions