Today’s edition of Today in Payments covers the scrutiny Mastercard and Visa face over illegal gambling transactions and the rising interest in pay-by-bank among businesses looking to cut costs and improve security.
Welcome to Today in Payments. I’m your host, Patti Murphy, bringing you your daily dose of payments insights.
Mastercard and Visa Under Fire for Gambling Transactions
Mastercard and Visa are under scrutiny over allegations that illegal gambling websites are using their networks to process payments. These websites have reportedly scammed customers in the UK out of thousands of pounds.
An investigation by the group Investigate Europe found that Mastercard was listed as a payment method on nine illegal casino and live sports betting websites, while Visa appeared as a payment option on two, according to published reports.
None of these websites hold gambling licenses, as required by UK law. However, they still appear in search listings and are promoted on social media. The five most popular sites collectively attracted approximately four million UK visitors between October and December. Accusations against these sites include failing to pay winnings and exploiting problem gamblers.
According to PYMNTS.com, Mastercard stated that it has “zero tolerance” for illegal activity on its network and is actively investigating the sites in question. Visa issued a similar statement. Mastercard further emphasized that acquirers are responsible for conducting due diligence to ensure the legality of the payments processed on their network.
Pay-by-Bank Gains Traction Among Businesses
A new report from PYMNTS.com highlights the increasing adoption of pay-by-bank in consumer-facing sectors. While still in its early stages, the payment method appears to be reducing cart abandonment rates.
The report, titled “Cost Concerns Hinder Merchants’ Pay-by-Bank Adoption – But Current Payments Could Cost More,” is based on interviews conducted with business executives last summer.
Beyond reducing cart abandonment, 80% of surveyed firms that have implemented pay-by-bank cite enhanced data security as a major benefit. Another key advantage is ease of use for consumers, with 80% of respondents noting that this factor has been particularly beneficial in industries like retail, groceries, and ridesharing.
However, cost remains a concern. According to the report, 78% of companies that have not adopted pay-by-bank are worried about expenses such as system integration and consumer education. Yet, these concerns may overlook the all-in costs of card acceptance. Businesses report paying between 4% and 10% of their revenues on card processing fees, chargebacks, fraud losses, and other associated costs.
To encourage adoption, some companies are offering consumer incentives. The report notes that 95% of businesses that have adopted or are considering pay-by-bank are willing to provide cash-back rewards or fraud protection. Additionally, 69% of firms indicated they would offer purchase price discounts of up to 2% for customers who choose pay-by-bank.
Larger companies appear more eager to implement pay-by-bank than smaller businesses. Among all surveyed companies, 91.4% expressed interest in offering pay-by-bank options. Notably, 100% of companies with over $1 billion in revenue showed interest, compared to 84.2% of those with revenues between $100 million and $1 billion.
Closing Thoughts
That’s it for Today in Payments. Thanks for tuning in, and be sure to check back for your daily dose of payments news and insights.
No Comments Yet
Let us know what you think