The Growing Problem of Credit Card Decline RatesCredit card rejections are the bane of the online casino. When the online casino rejects your credit card, they are not only denying themselves the opportunity to win your money, but they are often denying you access to their casino completely. If your credit card was rejected by your bank due to gaming restrictions imposed by your bank, it is likely that your credit card will never be accepted by that casino.
Of course, the casinos don't want to reject your credit card; they simply hand off the transaction request to their credit card processing company, which in turn requests approval from your bank, who in turn denies the transaction. By some accounts nearly half of all Internet gaming transactions are declined by the card issuing bank due to their MCC code - the identifier that tells the card issuing bank what type of transaction is being processed
Hiding the Transactions
Some casinos get around this problem by trying to hide the type of transaction by changing the MCC code. Visa has a strict policy against this, and merchants who engage in this type of deception may be subject to fines and loss of their merchant accounts. The casinos have a tough choice between hiding their transaction types, thus increasing their access to players and their money, and heavy fines by the credit card companies.
Of course a discussion on the morality, legality, and propriety of banks declining these transactions would be the basis for a much more detailed article, the simple truth remains that online casinos are beginning to espouse alternative technologies and payment mechanisms to help players easily deposit funds to the casino accounts. However, at this time a significant majority of all online transactions made by credit card.
To combat this difficulty, some online casinos have started to ask their customers to switch their credit cards to certain banks which don't mind processing online gaming transactions. These casinos have assembled lists of 'non-hostile banks' as they call them, and give bonuses to their players for switching their credit cards to them.
Those casinos are also asking their players to write letters of complaint to their current banks that don't process online gaming transactions. Some online casinos and software providers have gone a step further to begin lobbying for legislation against this sort of transaction discrimination. The Interactive Gaming Council has a special committee dedicated to this problem.
Another counter measure the online casinos take is to encourage their players to open accounts with some of the larger electronic wallet companies, such as PayPal of FirePay. Many online casinos now interface with these electronic wallet systems, and allow you to easily transfer money back and forth between the wallet and your casino account.
For the benefit of the player, and for ease of making the transactions into your electronic wallet, both of these providers allow you to fund your wallet using your credit card. Since electronic wallets can be used to purchase a variety of goods and services besides online gaming, the funding transactions can be coded as non-gaming, and therefore, the approval rates from the issuing banks are much higher.
It is still not a perfect solution for online casinos or players, since these systems require a two step process to make a deposit. Step one is to deposit money to your electronic wallet, and step two is to make the transfer to your casino account.
What it all means
It is likely that for the short term credit card declines will continue to be a growing problem for online casinos and for players. Hopefully, with some of the lobbying efforts just underway the problem will only be temporary.