Why don’t banks block credit card gambling transactions by default?
Block gambling transactions are one of the options UK punters have when looking to protect their savings and bank accounts from being used in gambling. Many banks already support this feature, but many others have yet to adopt it. Users also need to register (enable the feature) to block gambling transactions. Why banks don’t stop these payments by default is a question banks need to answer.
However, several reasons make it nearly impossible for banks to automatically reverse payments to gambling sites. committee. Although there are still countless credit card deposit casinos available for players who want to use them. In this article, we’ve outlined some common reasons why many banks are reluctant to block gambling transactions by default.
Gambling transactions generate revenue
Banks are businesses and aim to profit by charging customers for various services. Gambling transactions made through the bank constitute banking services subject to processing fees, account maintenance and other provisions allowing the bank to earn money. The commission finds no reason to require banks to void gambling transactions by default without interfering with other existing rights used to protect financial institutions. As such, the decision is left to the customer. Players can activate the void game transactions feature if their bank supports it and will instantly block all payment requests made by betting and gaming companies. However, until they request the service, the bank has no reason to stop a transaction that could potentially earn them money. Below are some of the fees banks expect to receive from a gambling transaction made through their service:
- Interest and cash advance fees – If a player uses their credit card to fund a gaming account, the bank treats the expense as a cash advance, more like cash withdrawals, but with high interest charges. Banks charge 3% to 5% for cash advances and gambling transactions have no grace period, so interest starts from the next day. The customer will also pay high cash advance fees compared to if the transaction was for food or other items.
- Other Fees and Surcharges – A transaction triggers the need for maintenance, so using your bank to play will incur higher maintenance fees. User may also pay extra for exceeding credit card limits, late payments, offshore/foreign transactions and GST charges. Combine that with cash advance fees, and it’s easy to see why banks won’t reverse a gambling transaction unless the user has requested it.
- Low expenses – In addition to generating revenue, gambling transactions come with fewer responsibilities and costs. There is no grace period and the customer does not receive any rewards, credits or promotional offers. As players love credit card casino payments, it also comes with benefits for financial institutions. The bank simply spends less and benefits more from allowing customers to make gambling transactions.
Competition from alternative payment solutions
There is no doubt that traditional banks are facing massive competition from popular online payment systems in the field of gambling. The modern gamer has access to hundreds of e-wallets and crypto wallets that they can use to make instant transactions to fund their gambling hobby. Additionally, online casinos support various payment options covering credit and debit cards, prepaid cards, digital wallets, cryptocurrencies, electronic checks and telephone payment options. Bank users can quickly transfer funds from their savings and accounts to alternative payment systems from which they can conduct gaming transactions. Over time, the game might decide to make large deposits for payouts. alternatives and continue playing. For the bank, this translates into a loss of services and potential income.
Other payment services continue to facilitate gaming transactions and digital payments, so there is no reason for banks to reverse these transactions if the customer chooses to use their services for the same. Additionally, modern online banking systems offer almost all the services found in local banks, and competition for customers is high. Banks are obliged to accept gaming transactions voluntarily requested by the customer to track e-wallets and cryptocurrency wallets. Otherwise, they risk losing the customer to other banks and popular payment systems that support gambling transactions. However, the bank offers customers the option to cancel all gambling-related transactions whenever they wish.
No law enforces cancellation of gambling transactions
Banks operate under strict laws as they are and are not willing to burden themselves with other regulations that are not mandatory. Blocking game transactions goes against what the bank is designed for, providing convenient transactions. Some banks block gambling transactions as a measure against credit card fraud or due to specific legislation. For example, credit cards are banned in UKGC casinos and sportsbooks, so banks can block transactions with known gambling operators. However, there is no specific law prohibiting banks from allowing gambling transactions. The only time banks are required by law to prohibit such transactions is if the customer requests it or if there are suspicions of fraud, money laundering and criminal investigations.
Most banks have not yet included the function of canceling gambling transactions because there is no law requiring them to offer such services. On the contrary, reluctant banks want to maximize revenue from these transactions before it becomes mandatory to include payment blocking as part of the service. As things stand, banks are free to determine whether they should offer this feature to their customers. Many operators who offer this feature choose to attract customers looking for such services. Even in this case, the customer reserves the right to activate or deactivate the functionality whenever he wishes. However, the Gambling Commission is considering a massive overhaul of the Gambling Act 2005 and may introduce regulations affecting the bank’s decision to provide such features.
Some banks allow bettors to void all gambling transactions while others have no such services. Therefore, it is the player’s responsibility to protect their savings and credit limits against gambling activity by requesting the bank to reverse such transactions. Another reason why this is rarely an option is anonymity, many players prefer not to share their documents and if banks decide to block their transitions without a request it can trigger a misunderstanding. Other than that, banks are not required to block gambling transactions by default unless they want to or for the other reasons mentioned above. After all, allowing such transactions is more profitable.