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Credit Cards and Online Betting

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Some Background Information

Credit CardsIt’s no wonder that credit and debit cards are some of the most offered forms of financial funding for online gambling accounts. Use of cards, whether debit, credit, or prepaid, has skyrocketed around the world, especially over the last ten years.

It’s hard to believe that with Visa, Mastercard, American Express, Diners Club, Discover, and JCB being such household names, that the first actual credit card wasn’t available until 1950 when Frank McNamara had the idea for Diners Club.

Diners Club started with 200 cards issued for acceptance at just 27 restaurants, and by the end of 1950, 20,000 customers were using the Diners Club card for easy purchasing power.

Revolving balances didn’t come into play until 1959, so Diners Club members needed to pay off their card debt in full on a monthly basis.

The Bank Americard issued by Bank of America in California as well as American Express launched shortly after that, in 1958. American Express was known as a travel and entertainment card and charged annual fees to its cardholders. Bank Americard remained regional until 1966 and then went national, and eventually was renamed Visa in 1976.

In the UK, the first card wasn’t issued until 1966, and it was the Barclaycard that was based on the US’s Bank Americard premise. Australia got into the credit card business a bit later with their Bankcard credit card making its appearance in 1974.

It was China, though, that was the real latecomer to the party. The Great Wall Card was launched in 1986 for foreign exchange transactions. And, it wasn’t until just recently that China started accepted Visa, Mastercard, and American Express but it’s the China’s Union Pay, that links all of its ATMs that is the largest payment organization in the world for combined debit and credit card use.

Speaking of debit cards, if you were born before 1970, debit card availability may seem relatively recent to you. In actuality, though, the Bank of Delaware issued the first ever debit card back in 1966, but debit card use didn’t catch on until the 80s and 90s when ATMs started popping up across the United States.

The first debit card in the UK also came from Barclays who issued the Visa Delta Card in 1987. Debit card use picked up quickly, though. In 1994, half of the adults in Britain possessed a debit card, and in Australia, international debit cards gained momentum in the 2000s.

From credit and debit cards to the relatively new prepaid and gift cards, cash is becoming more and more obsolete as consumers have their wallets packed with dozens of cards or they pull up their virtual card on their smartphone and have purchase power with a push of a button.

The newer versions of the traditional credit or debit variety have enabled more sports bettors to stake their wagers online. If a bank isn’t willing to allow for a gambling transaction, rest assured, they’ll find an alternative card that will work. Prepaid and gift cards can be purchased online or at retail locations in most countries around the world and allow for more flexibility as they’re less tied to a traditional banking method.

Credit? Debit? Prepaid? Gift?

Credit and Debit CardsFinding a card to fit the bill for anyone, anywhere, is easier than ever. The biggest card providers, Visa, Mastercard, American Express, JCB, Diners Club, Union Pay, and Discover are still out there offering the traditional card services.

Credit cards can be applied for directly from the card provider service online or through a bank or credit union. Credit cards are the most difficult of all financial methods as they are essentially just a loan. We mentioned that the first Diners Club and American Express cards did not provide revolving balances. They gave the customer the opportunity to pay without cash in hand. But, the balance needed to be paid monthly. There was no carryover of balances or minimum payout due. The original cardholders were required to pay the balance in full each month.

In 1959, revolving balances came into play and are similar to today’s service. Customers have the option to pay the entire amount or to pay a minimum payment and have the balance extend to the next month or beyond that with the addition of monthly fees. In essence, a credit card is a type of loan.

Customers are receiving a service or a product without having to pay for it all at once. That’s why the credit card is hardest to acquire of all card services. Depending on the provider and the location, verifications such as credit history, finances, employment, and longevity at an address all factor into the decision-making process of issuing credit or not.

For quite awhile, credit cards were the only game in town but then came the debit card that changed consumer behavior forever. Debit cards are linked to a bank account, and when they first came to be, they were simply for ATM use, meaning that they were an easy way to withdraw money from a bank account without having to go into the bank itself.

Gradually they progressed to the branded cards like the Visa Debit or Maestro international debit card that’s issued by Mastercard. The designation of Visa or Mastercard allowed for the cards to be used for direct purchases. They look like credit cards but don’t act like them. The money needs to be in the account for the purchase to be approved. Debit cards are a great way to facilitate easy and quick transactions without incurring additional debt.

Before the millennium, debit card use increased significantly in most countries. The convenience they provided to both the customers and the merchants was evident and, by 2001, debit card expenditure exceeded credit cards in many areas.

Let’s also remember that a little thing called the internet was also relatively new and growing exponentially. Retail operations that were popping up online needed to facilitate remote non-cash payments, and debit and credit cards suited that purpose almost exclusively in the early days. Gambling operators were also launching their new services online at this time and also took advantage of the convenience of debit and credit cards. Early merchant processing really didn’t allow for much more anyway.

The increase in business for card providers prompted them to discover more and more ways to satisfy consumer demand so, also before 2000, gift and prepaid cards came into mass production, but it wasn’t until the last ten years or so that they contributed significantly to overall card use.

Prepaid cards, especially, can be handy when used for gambling purposes. They aren’t registered or attached to a bank account which makes them easier to approve as long as the sportsbook or casino permits their use.

How to Get Started

Unlike information we tend to provide for payment methods like Skrill or Paypal, card use is so prevalent that it’s unnecessary to have a step by step guide for securing a card.

Suffice it to say that cards are available everywhere. Credit and debit cards are typically issued by the bank or credit union and not the actual company. We contacted Visa about a special prepaid card and their response was “Visa does not issue Visa cards.” Customers need to go to a distributor, and if it’s not their bank or regular financial institution, it can be a card provider who acts on behalf of Visa, Mastercard, or some of the others. American Express does issue directly, but American Express also isn’t tied in with debit card use although it does offer gift cards.

Gift and prepaid cards can be purchased online or at any number of retail locations from grocery stores to gas stations to some department stores. If you’re looking for a gift or prepaid card, chances are you don’t have to venture very far to find one.

Using Card Transactions to Fund Online Gaming

As card payments are so prevalent both in-person and online, it would only make sense that sportsbooks are also authorized merchants for card acceptance.

In areas like the United Kingdom where gambling is permitted by law both in-person and online, card use has the least amount of limitations but is still not one-hundred percent approved across the board. The cards always depend on the banks or financial institutions that issue them and the way that they code their merchant categories.

In the United States, where use is gambling use is only allowed in three states, those merchant codes really come into play. Mastercard used to assign one code straight across the board for gambling operators that would also cover track betting, lottery tickets, and purchase of casino chips. When that code popped up in conjunction to online wagering the banks would typically block that type of transaction. However, Mastercard recently added a new code that was assigned to cash advances for legal gambling.

Note the term “cash advances.” The designation of cash advance automatically adds a higher fee or monthly percentage rate.

If you look at an American catering sportsbook like 5Dimes or Bovada, you’ll see that they don’t offer credit or debit cards for account funding simply because those transactions more often than not will be declined.

The newer alternative, prepaid cards, have been increasing in popularity and are now even directly issued from certain gambling operators. In the states, New Jersey has been recently approved for online wagering and the Golden Nugget, licensed in that state, started offering their own Golden Nugget prepaid card, part of the Discover network.

The card is essentially an intermediary between the debit and credit cards and the Golden Nugget as customers load the prepaid version from their traditional card. This innovation prompted Golden Nugget’s win of the “Most Innovative Gaming Technology Product of the Year” award in 2013.

Outside of the US, prepaid and gift cards have also been added as options and customers can also try to transmit those cards as a regular Visa or Mastercard transaction depending on the brand. It still is a crap shoot as to whether the approval will be given or not, but new cards provide additional coding options and expanded opportunities for use.

Let’s Talk About Fees

If a sportsbook charges their customers for deposits, they will usually include credit and debit cards in the mix.

Bovada, a US book, charges a hefty 4.9% fee for Visa use and 6.9% for Mastercard. Sports Interaction in Canada, though, allows for free credit and debit card transfers, but charges fees for other methods employed, and most UK and Asian bookmakers will allow for fee-free transactions despite the selected means. Betfair, both a sportsbook and betting exchange, imposes a 1.5% fee on credit card use.

There’s another part of the fee equation, though, the fees that are assessed by the card providers. As we previously mentioned, deposits to player accounts are now being treated as cash advances in some instances. Cash advances can come with a higher percentage rate anywhere from 4-10% so players should factor in that additional expense.

How to Use a Card to Deposit to an Online Bookie

Secure Card DepositUsing a card payment is as fast as inputting the card number, expiration date, and card verification code (the three-digit code on the back of the card). Enter the amount to transfer and then click submit, and it’s now in the hands of the merchant processor as to whether it will be approved or not.

Limits will always depend on two factors:

1. The card services provider
2. The sportsbook (or casino or poker room)

The more recreational-type sportsbook will have a lower limit available but, again, even that limit depends on the bank or card service supplier. The higher payout books tend to have more generous deposit limits. Bet365, for example, with a £2 million payout on top level football allows for Visa, Mastercard, and Maestro transactions for as low as £5 and as high as £20,000 in a single request.

William Hill, a sportsbook that also has high payout limits allows for Visa, Mastercard, and Maestro transactions as low as £5 and as high as £99,000.

Intertops, that does have global clientele, primarily caters to US players and its maximum deposit amount is only $1,000. That’s quite a bit less than the £99,000 available to punters from the United Kingdom.

The turnaround time for all credit and debit cards, regardless of what sportsbook is accepting the deposit, is nearly instant. There’s usually a few second delay to find out if the request was approved and then either the funds are available or the players needs to come up with plan B.

Here are a few sportsbooks and their specific information regarding card acceptance:

Before we get into the individual sportsbooks, we do need to note that card acceptance for the cash out procedure is extremely small compared to the deposit availability. In cases where players use credit and debit cards and especially prepaid or gift, a bank transfer or mailed cheque are usually the backup plans.

Sportsbet in Australia does not offer the credit or debit card cash out option, and also is set up for some prepaid and virtual card deposits, but states that some may be declined. It also publicizes that account holders of Virgin Money, Bank of Queensland, and Citibank do not permit for account funding in conjunction with gambling use.

188bet and SBOBET, both Asian sportsbooks, do offer the withdrawal option but 188bet allows for a Visa payout only.

Bet365, Betfair, Betway, Coral, Unibet, and William Hill are some of the prominent bookmakers who also allow for debit or credit card withdrawals. Again, keep in mind that prepaid cards can’t be used for withdrawals due to the nature of their setup.

BetOnline, Bodog, Intertops, and Sports Interaction count amongst the online providers that allow for debit and credit card deposits but don’t enable them for the reverse process.

What are the benefits?

Why to use cards for online sports betting?

What are the disadvantages?

Bookmakers Have Embraced This Deposit Method

Card payments were the original ways to fund online player accounts and continue to be one of the top methods in most regions of the world. Bookmakers appreciate card approvals as they’re straightforward and both the customer and the merchant have some levels of protection.

Credit and debit card acceptance opens the door to so many players that don’t choose to open e-wallet or virtual wallet accounts. The more old-school players want a method that they are comfortable with and understand, and card payments just fit the bill.

Prepaid and gift cards are good viable options, and bookies certainly want to allow as many ways to get the bets staked as possible but, again, they’re up to an approval process.

Some books have their own personalized payment card that they issue to players to make the entire process even that much easier. The Sportsbet Cash Card, William Hill Direct Card, and Coral’s Connect Card, to name a few, act as a go-between with credit and debit cards and the sportsbook to help facilitate those challenging transactions.

Common Questions (Plus Answers)

What are the restrictions imposed by sportsbooks for credit and debit card use?
Every sportsbook has different rules, but all must abide by the card provider’s merchant transaction codes and approval process. Not all cards are accepted, and individual banks may impose even stricter guidelines for payments toward online gambling. Some sportsbooks, like Bovada, charge fees to use credit or debit cards and some allow them for depositing but not withdrawing. It’s best to check with the bookmaker of your choosing and clarify card use before initiating any request to move money.

If I deposit to a player’s account using a credit or debit card, can I withdraw using another method?
If a bookmaker allows for withdrawals using a card, they typically prefer the same method that was employed for depositing. However, many sportsbooks will pay out using a bank transfer or cheque by mail as viable options.

Why would I use a credit or debit card instead of another financial service?
One of the main reasons for credit and debit card use is that the cards are the most accessible for most players. The majority of people who participate in online gambling already possess at least one card, and many people have a whole slew of them from which to select. If one is declined, there’s a chance that a different card will be approved. Debit card use keeps spending until control as the player isn’t taking on new debt that comes with finance charges.

Finally

On the one hand, you have the sportsbooks and the customers who are anxious to use credit and debit cards for the convenience that they offer. On the other, some banks and other financial institutions are hesitant to allow their customers to use cards for gambling purposes as they are trying to avoid fraudulent transactions, chargebacks, and any association with problem gambling.

It seems as though gambling account funding always carries uncertainty and it’s greater when it involves traditional banking organizations like the ones that provide credit and debit cards.

In any case, players still opt to use cards whenever possible as the convenience and access that they provide make the fees and the approval process worthwhile.

…and to Conclude

PayPal leaves online bettors with a good news, bad news scenario.

On the one hand, you have the sportsbooks and the customers who are anxious to use credit and debit cards for the convenience that they offer. On the other, some banks and other financial institutions are hesitant to allow their customers to use cards for gambling purposes as they are trying to avoid fraudulent transactions, chargebacks, and any association with problem gambling.

It seems as though gambling account funding always carries uncertainty and it’s greater when it involves traditional banking organizations like the ones that provide credit and debit cards.

In any case, players still opt to use cards whenever possible as the convenience and access that they provide make the fees and the approval process worthwhile.