The block gambling transactions feature one of the options UK punters have when looking to protect their savings and bank accounts from being used in gambling. Many banks already support the feature, but many more are yet to adopt it. Users must also opt-in (activate the feature) to block gambling transactions. Why banks don’t stop such payments by default is one for banks to answer.
However, several reasons make it nearly impossible for banks to automatically cancel payments to gambling sites. It takes stringent regulations from the UK Gambling Commission to protect UK players from using credit cards on websites licensed by the commission. Although, there are still umpteen available credit card deposit casinos for players who want to use them. In this article, we described some popular reasons why many banks are reluctant to block gambling transactions by default.
Gambling Transactions Generate Revenue
Banks are businesses and aim to profit by charging customers for various services. Gambling transactions made through the bank constitutes banking services subject to processing fees, account maintenance, and other provisions where the bank can make money. The commission finds no grounds to mandate banks to cancel gambling transactions by default without interfering with other existing rights used to protect financial establishments. As such, the decision is left to the customer. Players can activate the cancel gambling transactions feature if their bank supports it and will instantly block all payment requests made from betting and gambling companies. However, until they request the service, the bank has no reason to stop a transaction that could potentially make them money. Below are some of the fees banks stand to get from a gambling transaction made through their service:
- Interest & Cash Advance Fee – If a player uses their credit card to fund a gambling account, the bank treats the expense as cash advance, more like cash withdrawals, albeit with high-interest fees. Banks charge 3% to 5% for cash advances, and gambling transactions get no grace period, so interests start from the next day. The customer will also pay a high cash advance fee compared to if the transaction was for food or other items.
- Other Charges and Surcharges – A transaction triggers the need for maintenance, so using your bank for gambling will result in higher maintenance charges. The user may also pay extra for exceeding credit card limits, late payments, offshore/foreign transactions, and GST charges. Combine this with the cash advance fee, and it’s easy to see why banks won’t cancel a gambling transaction unless the user has requested it.
- Low Expenses – In addition to generating revenue, gambling transactions come with fewer liabilities and costs. There’s no grace period, and the customer doesn’t get any rewards, credit points or promotional offers. As players like credit card casino payments, it also comes with a benefits for the finance institutions. The bank simply spends less and benefits more from allowing customers to make gambling transactions.
Competition from Alternative Payment Solutions
There’s no doubt traditional banks face massive competition from popular online payment systems in gambling. The modern play has access to hundreds of eWallets and crypto wallets they can use to complete instant transactions to fund their gambling hobby. Moreover, online casinos support various payment options spanning credit and debit cards, prepaid cards, digital wallets, cryptocurrencies, eChecks, and Pay By Phone options. Bank users can quickly move funds from their savings and accounts to alternative payment systems from which they can complete gambling transactions. Over time, the play might decide to make large deposits to alternative payments and continue to gamble. For the bank, this translates to lost services and potential income.
Other payment services continue to facilitate gambling transactions and digital payments, so there’s no reason for banks to cancel such transactions if the customer chooses to use their services for the same. What’s more, modern online banking systems offer nearly all the services found in local banks, and the competition for customers is high. Banks are forced to accept gambling transactions voluntarily requested by the customer to keep up with eWallets and cryptocurrency wallets. Otherwise, they risk losing the customer to other banks and popular payment systems that support gambling transactions. However, the bank offers customers the opportunity to cancel all gambling-related transactions whenever they want.
No Law Enforces Cancelling Gambling Transactions
Banks operate under strict laws as it is and aren’t willing to burden themselves with other regulations that aren’t mandatory. Blocking gambling transactions is against what the bank is built to do, offering convenient transactions. Some banks block gambling-related transactions as a measure against credit card fraud or because of specific legislation. For instance, credit cards are banned from UKGC casinos and sportsbooks, so banks may block transactions to known gambling operators. However, no specific law prohibits banks from allowing gambling transactions. The only time banks are required by law to ban such transactions is if the customer requests it or there’s suspicion of fraud, money laundering and legal investigations.
Most banks are yet to include the cancel gambling transactions feature since no laws oblige them to offer such services. If anything, the reluctant banks are keen to maximize the revenue from such transactions before it becomes mandatory to include payment blocking as part of the service. As things stand, banks can freely determine whether they should offer customers the feature. Many operators who provide the feature choose to attract customers looking for such services. Even then, the customer reserves the right to activate or deactivate the feature whenever they want. However, the gambling commission is considering a massive overhaul of the 2005 Gambling Act and might introduce regulations affecting the bank’s decision in providing such features.
Some banks allow punters to cancel all gambling transactions while others don’t have such services. Therefore, it’s upon the player to protect their savings and credit limits from gambling activity by asking the bank to cancel such transactions. Another reason why it is rarely an option is anonymity, many players prefer not to share their documents and if the banks decide to block their transitions without request, it may trigger some misunderstanding. Other than that, banks aren’t required to block gambling transactions by default unless they want to or for other reasons mentioned above. After all, allowing such transactions is more profitable.