Opinion: How to protect yourself from cybercrime

MiFinity Payments CTO Jonathan Bowman on how operators need to safeguard themselves against cybercrime

Every country has its own laws and regulations related to online wagering, which complicates discussion of egaming companies’ compliance requirements, accepted payment methods, and risk factors. Yet across the sector, frequent use of credit cards raises numerous authorization and access issues. Criminals frequently attempt to use stolen card numbers on wagering sites, and consumers play that to their advantage by committing ‘friendly fraud.’

Friendly fraud occurs when a consumer uses credit card information to wager, but later claims that the related charges from a gaming outfit were actually unauthorized. The consumer simply lost money, but can win an undue chargeback by telling the credit card company that he or she did not sanction the payment.

Incidents of friendly fraud are commonly caught by egaming operators and card companies after they happen – leading to unnecessary and expensive investigations by both parties. But technology is now helping the online wagering industry to get ahead of friendly fraud and other consumer-driven financial crime risks by placing a stronger focus on validation.

Bolster protections

By leveraging digital e-wallets gaming companies are now requiring players to supply their bank account or credit card information to an online account prior to game play– creating a verifiable access trail – and to utilize only the tokenized digital wallet for all wagering activity, bolstering security protections for both the egaming company and the consumer. (Tokenization replaces the consumer’s original cardholder data with a randomly generated virtual card number, or “token,” bundled with business rules for its exact use – where, when, and by whom.)

In addition, common banking rules classify digital wallet transactions as “quasi-cash” (aka, representative of actual currency) rather than as regular merchant transactions – preventing users from earning chargebacks.

Digital wallets don’t resolve all of gaming companies’ risk factors – like competitor DDoS attacks, for example – but overall, the technology serving the egaming market is evolving rapidly to conquer new and existing threats, especially those related to consumer fraud.

The next level

More validation and access focused features are expected to enter the market in 2016. For example, emerging ‘visual card’ functionality will require each player to snap a photo of the credit or debit card to authorize it for game play; only then will the player be able to load funds or otherwise utilize the e-wallet.

Ultimately, to mitigate as many of their risk factors as possible, gaming operators must seek out technology solutions geared specifically to the unique needs and threats of their industry. The sector is high-risk enough before you add in the vulnerabilities of digital transactions (on both the acquisition and disbursement sides) and the creativity of tech-savvy financial criminals (drawn to an already high-stakes sector).

Taking all of those factors into consideration for financial crime prevention, it’s clear that the house can only win if it utilizes the most effective tools.

Bio: Jonathan Bowman is the chief technology officer of MiFinity Payments.