Credit & Debit Cards

There are four main types of credit and debit cards used in the world today. These are Visa, Mastercard, American Express, and Discover. These four “Card Networks” issue more than 99% of all credit and debit cards used throughout the world today. The card networks work separately from the banks, so if you want to acquire a VISA card, you do not go to VISA directly, but one of the many financial institutions that issue their cards.

VISA and MasterCard are issued by a multitude of different companies which includes banks, credit unions, and other types of financial institutions which may or may not exist in your country.

Visa & Mastercard differ significantly from American Express and Discover, as these two companies not only operate their own networks but also issue the cards used on them as well. For this reason, this article centers mainly around Visa & Mastercard. We have a separate article which discusses Discover and American Express, which you should read if your own credit or debit card is issued by one of those companies.

A debit card is linked directly to your own funds, which means you can only spend money you actually have available in your account. In contrast, a credit card allows you to make purchases and spend funds that you are required to pay back later, usually (but not always) with interested added on top. Some countries have banned the use of credit cards for gambling transactions, but there are many loopholes which allow players to get around these rules if they wish to.

It should be understood, however, that gambling with money you do not have is generally a very bad idea; casino gambling is a form of entertainment with a negative expectation outcome. The very nature of casino gambling means that you will lose more often than you will win, so it is understandable that responsible authorities such as the UK Gambling Commission and Malta Gaming Authority would prefer it if you did not gamble using money you do not have.

History

In the early days of the internet, paying using your debit or credit card was the only option available. It did not take long for the problems with this situation to became known, however. Card details were frequently stolen from poorly secured servers, and then used to make fraudulent purchases or transactions without the cardholder’s knowledge. A better solution was required if trade on the web was to be truly successful.

Early attempts at creating purely digital cash were hampered by the inability of software developers to produce an effective fix for what later became known as the double spending problem. Satoshi Nakamoto eventually solved this problem in 2009 when he created the Bitcoin cryptocurrency, which used an innovative technology that he called the “blockchain”. This prevented savvy individuals who understood the underlying technology from duplicating their digital “cash” and spending it repeatedly.

Before Bitcoin, web-based money was achieved by companies such as DigiCash and PayPal, who used the existing financial networks to facilitate the transactions, but ultimately, banks accounts and cards were still required in order to get money in and out of the system.

In his White Paper, Satoshi referenced Hashcash, B-Money and Bit Gold as early inspirations for the technology he created. Whilst cryptocurrencies such as Bitcoin have a great deal of potential, they have a long way to go before they can rival the simplicity of making card transactions for most ordinary people.

Credit Cards are popular when making large purchases, because of the additional security that is provided by the issuers of these cards. If you suffer fraud whilst using a credit card on the internet, you can be quite sure that you will get your money back – although you may well be seriously inconvenienced in the process. Credit cards go further than this, however – they protect you from inadequate service, failure to receive the goods you pay for, and receiving an item that is not of the quality of workmanship that you have the right to expect.

Debit Cards too offer protection against fraud, and most card issuers will refund any monies spent on your debit card without your permission. The burden of proof is on you, however, to show that it was not you who spent the money in the first place. This is easy to achieve if somebody has ordered physical goods to an address in another country – a little harder to prove if the contents of your bank account have been deposited at an online casino, then gambled away.

If you do make a habit of using your debit and credit cards to make online purchases, we recommend looking into Virtual Credit Cards as a way of preventing fraud on your primary card. Privacy.com is one of the biggest providers of this kind of service in the USA, and revolut.com offer something similar in the United Kingdom. These services allow you to create individual cards with specific limits for certain retailers – they can also allow you to manage your spending, too.

Online Casinos: Making a Deposit

Gamblers based in Europe have It easy: most European countries have already legalized and regulated online gambling. Even in countries which do not have their own regulator, the licenses provided by both the UK Gambling Commission (UKGC) and Malta Gaming Authority (MGA) require that all players be treated the same, even if they do not live in Malta or the UK.

Players based in these countries are free to use any type of debit card they wish to deposit at an online casino, although every responsible licensing authority prohibits casinos from accepting deposits made with credit cards. The reasoning behind this should be obvious, but nevertheless we do go into a little more detail about it in the FAQ section at the end of this article.

Credit & Debit Cards in North America

On the other side of the Atlantic, things are currently hugely different. States such as Las Vegas and New Jersey have already legalized online gambling, but the Federal Unlawful Internet Gambling Enforcement Act (UIGEA) is still in effect and supersedes any laws passed by the individual states.

When the UIGEA first came into effect, almost every major gambling company immediately pulled out of the US market. Some online casinos and poker rooms had no choice but to try and continue operating in the United States, but the card networks also took immediate action after the law was passed.

Suddenly, players were unable to deposit using their credit or debit cards. This was a total disaster for many casinos, as there were few alternatives available in 2006., Neteller was the most popular e-wallet in the United States at the time, and they too made the decision to pull out of the US market.

This left American players with no choice but to use slow and expensive payment methods such as bank wires, checks, and Western Union. Players could no longer gamble at their leisure – they had to plan the activity in advance. This resulted in many US-centric online casinos going bankrupt.

Had these companies studied the text of the UIGEA more carefully, it is possible all of this could have been avoided. The UIGEA does not criminalize online gaming as a leisure activity – Its purpose was to protect American citizens from rogue online casinos based overseas.

The text of the UIGEA specifically states that companies must not process payments to and from unlicensed gambling websites. There were some savvy payment processors who must have noticed this very soon after the law was passed, as they continued to provide debit and credit card payment services to online casinos who were willing to pay their excessive fees and charges.

The Start of The New Beginning

Neteller restarted US operations in 2014, but transactions were strictly limited to offshore casinos holding at least one license from a respectable regulator. Upon seeing this, other e-wallet companies and payment processors decided they too would get in on the act – after all if Neteller felt they could do this legally, why couldn’t they?

Another federal law, the Professional and Amateur Sports Protect Act (PASPA) previously gave Nevada a virtual monopoly over all kinds of sports betting, including online sportsbooks. This law was famously removed from the statute books after the Supreme Court ruled that it was unconstitutional in 2018.

As soon as the Supreme Court handed down their decision, the landscape of the online gambling industry in the United States began to change dramatically. Suddenly, many more casinos were willing to accept debit and credit card payments from American gamblers.

The situation in the United States continues to improve every year – at least twenty states are seeking to legalize online sports betting, and around half of those also want to allow some combination of online poker rooms, casinos, and bingo halls as well.

Prior to the passing of the UIGEA, online gambling was hugely popular in North America. This begs the question: why was the UIGEA ever passed in the first place, when both Congress and the President knew it would devastate an entire industry?

One common theory is that lobbyists made huge donations to politicians, effectively bribing them to vote for this law to safeguard the land-based gambling market in America. However, if this were true, why were both Nevada and New Jersey – the locations of Las Vegas and Atlantic City respectively – the very first states to enact their own legislation to permit online gambling?

Whatever the reason, it was both pointless and unfair – thousands, perhaps millions of Americans had to wait a year or more to get their funds back from the gambling and payment processing companies who had suddenly found themselves on the wrong side of the law.

Poker players were particularly badly affected, as these types of gamblers will typically keep their entire bankroll on their favorite site. Poker Pro’s such as Phil Ivey, Phil Hellmuth, and Antonio Esfandiari all had millions of dollars which they were suddenly unable to withdraw.

And let us not forget, those who got their balances back in full were the lucky ones – some players received pennies on the dollar from websites that had been forced into administration by the UIGEA.

Online Casinos: Making a Withdrawal

Making a withdrawal back to your card used to be a real pain, especially if you were with Mastercard – for whatever reason, this network would not allow online casinos to send funds back to their cards for years. High street retailers had no problems giving refunds to customers who had paid using a Mastercard, so the network definitely had this capability.

Thankfully, there were no such problems for VISA owners although card withdrawals did take several days to process, just like bank wires and checks. The global banking system is slowly but surely being upgraded for the digital age, and instant bank transfers are now both common and affordable. Checks are still common in the United States, but are now exceedingly rare in most European countries, where instant bank wires are simply much more convenient (and cheaper to process!) for both parties.

As for the frustratingly slow processing time of card refunds, VISA have led the charge in fixing this. They began offering instant refunds to their cards sometime around 2019, although both the sending party (the casino) and the receiving party (such as a bank) had to upgrade their systems to support the new “Visa Direct” technology.

Why was VISA so keen to implement this technology?

Online casinos, like every other merchant, receive payments from debit and credit cards instantly. Cardholders rightly asked why they should have to wait an entire week for payments to be sent back to the same card?

A considerable number of online gamblers began choosing to make their deposits and withdrawals using e-wallets such as Skrill, Neteller and PayPal. In countries where those options were not available, alternatives such as Cryptocurrency, CashApp and Venmo quickly gained traction.

This was unacceptable to VISA and Mastercard, as the commission they previously received on these transactions was now going to other companies instead of them. When huge companies such as VISA and Mastercard begin to see a huge drop in profits, you can be sure they will find a way to rectify this quickly!

The Situation Today

This type of payment is now called an Original Credit Transaction (OCT), and Mastercard were quick to follow VISA’s lead with their “Mastercard Moneysend” service. OCT enables a fast and convenient transfer of funds directly to a beneficiaries’ card. The technology is now available to more than a billion cardholders in more than two hundred countries.

When I make a casino withdrawal to my own bank card, a Mastercard, I usually receive the funds in the next 6-12 hours – an enormous improvement over the previous situation, where I would often wait up to five working days for my winnings to appear back on my card.

VISA are pushing to improve this still further by requiring card issuers to make funds available within 30 minutes of the transaction being approved. Better still, some Banks such as Barclays promise to push OCT payments to the account linked to the cardholder’s debit or credit card instantly. If other major banks follow suit, we could soon see card withdrawals become the fastest way of receiving your winnings from an online gambling site.

Frequently Asked Questions

When I enter my debit or credit card information into a website, what happens next? How is it transmitted, and where is it stored? Surely, I should feel uneasy about depositing at an online casino in this way?

It all depends on where you live. All online casinos encrypt financial transactions with the highest-grade security possible, so there is no chance of the information being stolen whilst in transit. Many casinos offer the option to store your card details for convenience, but many browsers also offer that feature nowadays too.

You have no idea if every online gambling site you play with is storing your details in a secure manner. If you are using Google Chrome or a similarly modern browser, saving your card details to your own computer rather than the casino, poker room or sportsbook provides a higher level of security, without sacrificing convenience.

Password managers such as LastPass and Dashlane both have extensions available for modern browsers and provide an even greater level of security. If you are the type of person who feels nervous about using your cards on the web, it is well worth paying the small subscription fee for one of these services.

I used to like using Skrill, but the restrictions associated with it are now so complicated that it seems easier just to use my card. Why did things end up this way? It used to be so convenient.

Moneybookers, the company that eventually became Skrill, were not overly concerned with the identity of their customers in the early days. This led to a rude awakening for the firm when KYC laws were introduced, and Moneybookers found themselves with millions of accounts linked to people who they knew for sure did not even exist – the accounts had been created purely for the purposes of claiming gambling welcome bonuses multiple times.

Since cleaning up their act and rebranding, Skrill has ended up purchasing both of its main rivals – PaySafeCard, who also operated UKash, and Neteller, who were previously the largest e-wallet in the United States. All these companies now part of the Optimal Payments group, which also includes Payoneer, Netbanx and Stripe, amongst others.

Optimal Payments is now one of the largest payment processors in the world, and yet many online casinos are yet to forgive the company for its earlier mistakes. As a result, new customers making their deposit via Skrill or Neteller are often ineligible for the introductory offers and welcome bonuses offered by the majority of online gambling site.

The only way around this is to use your card for your first deposit, then switch to using your e-wallet afterwards. Most reload bonuses permit Skrill deposits – it is only the more lucrative welcome bonuses which are going to take some time before gambling sites feel comfortable allowing players using Skrill to take advantage of them.

My debit card is not accepted at an online casino – what can I do?

Most online casinos offer a variety of different payment methods. You might find you miss out on a bonus or two (see the previous question to learn why), but you shouldn’t have any problem finding an alternative payment method you can use to make your deposit.

Revolut are quickly becoming the world’s leading digital banks, and their cards are accepted virtually everywhere. Personally, I believe it is well worth opening an account with this company. Not only do they allow you to create virtual cards for maximum security, but they can also give you a sort code and account number in any country in the world, and charge zero commission for transferring funds between currencies.

A number of fraudulent deposits have been made at an online casino using my debit card, but the casino is insisting that it was me who made the deposits and are refusing to refund the money. What can I do?

First, contact your bank. The first thing they will do is look at previous patterns of behavior – have you played at this site before, did you deposit similar amounts and so forth. Unfortunately, there are a lot of players who will decide to pull a stunt like this after losing more money than they could really afford whilst playing at an online casino.

I had a similar thing happen me once after I went to bed and left my friends still up in my living room where we had been playing online slots together. In that situation, I had to accept I had left my friends with easy access to my computer and payment method, and they simply carried on doing what we had been doing before I had gone off to bed. My friends did eventually pay me back, but I lost that casino account and I’m sure my bank thought I was trying to pull a fast one too. Be careful who you allow to use your devices when you are not around!

I want to use my credit card to gamble online, but it is not allowed within my jurisdiction. Is there any way to get around these restrictions?

I am sure there are many, but there are excellent reasons to justify banning credit cards from being used to fund online gambling. Firstly, statistics showed that a sizable percentage of credit card deposits were made late at night.

Whilst there is no proof that the cardholders were intoxicated when they made these deposits, licensing authorities also noticed that gambling transactions made using credit cards resulted in significantly higher numbers of chargebacks and claims of fraud than deposits made using debit cards. Such a correlation makes it fair to assume that credit card holders often regretted having gambled using their credit card.

E-wallets such as Skrill and Neteller have now implemented measures which stop funds deposited using a credit card being transferred to gambling sites in jurisdictions where direct credit card deposits are prohibited.

They can’t stop you from transferring the money backwards and forwards around various different accounts, paying fees at every turn, before finally sending it back to your Skrill account and depositing it as “clean” money … but don’t be surprised to find a “Source of Wealth” form landing in your inbox if you pull a stunt like this often.

In short – respect the rules, they are there for a reason. Only gamble when you can afford to – It is meant to be fun, after all!

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