Advantages of Alternative Payment Methods
Date Added: May 28, 2009
The ability to process financial transactions online is the backbone of online casinos. In the initial stages credit cards were the sole mechanism by which this could be done. Over a period of time the use of credit cards for funding online casinos began to show some disadvantages. One was that many online casinos could not remit withdrawals to the credit card account but sent paper checks instead. A lot of time was lost in the post and the processing of the paper checks before the player could actually use the funds. Another disadvantage was the fear of identity theft. The credit card details were stored in the servers of the online casinos and players feared that hackers could gain access to these details and misuse them. A problem of more recent origin is the rejection of credit card transactions for funding online casinos by the issuing banks. Alternative payment methods such as e-wallets and e-checks overcome these disadvantages and also offer some other advantages.
Most alternative payment methods accept withdrawals from online casinos. Players who have accounts in the alternative payment methods can directly get these accounts credited online by withdrawing funds from online casinos. This transaction is instantaneous and no time is lost. However there are a few alternative payment methods that do not accept withdrawals and players need to check this out before adopting any method.
The risk of identity theft is considerably reduced using alternative payment methods. If a player wagered in five online casinos then his credit card information would be stored in five different servers. However with alternative payment methods the credit card information is stored only in the server of the alternative payment method supplier and this account can be used to fund as many online casinos as needed without providing credit card information. The fussier online players can even fund their alternative payment account using a bank transfer thereby eliminating all need of providing credit card information altogether.
Credit card rejections are caused by the bank issuing the credit card. This is usually because the bank classifies transfer of funds to online casinos as an invalid operation. This problem is more prevalent in the United States because of the UIGEA. In the case of transfer of funds from the alternative payment account to the online casino account there is no involvement of any bank and hence no cause for the transaction being rejected.
When online casinos accept payments through credit cards they have to undertake a verification process the first time the credit card is used. This verification process involves among other things a lot of paperwork that includes obtaining a copy of the credit card from the customer and maintaining that paper record. This verification process is required to ensure that the player is the bona fide owner of the credit card. This verification process involves manpower and time and adds to the administrative cost of the online casino. When online casinos accept payments through alternative payment methods then no such verification is required to be done by the online casino. This saves them the cost of verification. Most online casinos pass on this benefit to the player by giving him a bonus for making payments through alternative payment methods. Thus the player also benefits by using the alternative payment methods.
Today there are a large number of alternative payment methods available to the online casino player. The choice is much wider than that for credit cards. This competition in the financial services sector for online casinos ultimately leads to advantages to the player in terms of lower costs or additional benefits.
Links