3 ways online gaming operators can reduce chargebacks
The word “chargeback” is enough to make any iGaming operator cringe. Dealing with the process is time-consuming, costly, and can feel like an uphill battle. After all, banks tend to side with the consumer. So why waste time, money, and resources challenging chargebacks? The truth is, with the help of technology, you can improve your win rate. But for this to happen, it helps to understand why chargebacks are so prevalent in the iGaming industry.
Why chargebacks run rampant in online gaming
It’s no secret. Online sports betting has seen record growth in the past few years[1]. With more and more states legalizing online sports betting, millions of players are signing up for iGaming platforms. The low barrier of entry, lucrative promos offered by operators, and rise in first-time gamblers have created a perfect storm for a now common type of chargeback: friendly fraud.
Friendly fraud isn’t a typical case of fraud. In other words, it is not usually perpetrated by someone who has a history of crime, but rather an ordinary person who suffers a case of bad luck and buyer’s remorse. Inexperienced gamblers are highly susceptible. They may place big bets, lose, and are suddenly in over their heads. Panic sets in. Then the only sensible resolution isn’t the most ethical. Users tell their banks they didn’t wager the bet or their account credentials were stolen and falsely claim they were victims of fraud.
The good news is that identity verification is an area in which fraud management technology has excelled. Chargebacks are one of the most easily identifiable forms of fraud, and one against which operators can be armed.
3 ways to reduce chargebacks and the accompanying financial loss
The best way to manage chargebacks is by verifying devices and players. There are thousands of background processes that can determine whether an individual is who they say they are and performed a transaction. Operators can confirm data about device location and player identity by using the three below certifiers:
Behavior analytics
Betting behavior can be measured in two ways: via a global metric and on an individual level, in which collected data of users’ online behavior gives clues about their identity. If the user’s behavior is unusual, this could be a sign of an account takeover. However, if the user’s behavior matches their normal behavior, it could mean the case was friendly fraud.
Device intelligence
Using a device’s location and connection attributes, operators can discern where the activity took place as well as other traits of the device itself. For example, if a bet was made overseas and the device’s language is not consistent with other account location criteria, this could be a sign of fraud.
Patterns
Similar to behavior analytics but much more specific, user patterns can be analyzed to take a closer look at an individual’s behavior. Keystrokes, mouse patterns, and touch patterns can be inspected to reduce uncertainty about the identity of an individual who placed a bet.
The above three solutions as well as the representment process can all be automated. This means the usual tedious job of gathering evidence can be done quickly and efficiently, without the operator’s involvement.
Reduce chargebacks. Increase your win rate.
Chargebacks no longer need to be a constant frustration for operators. Technology has advanced to the point where identifying friendly fraud and fraudulent chargebacks is easy. By utilizing the above certifiers, you’ll not only reduce chargebacks, but also increase your win rate. The result? You will save money and countless hours, which can then be used to improve your operations, player experience, and build a more profitable platform.
How can you get started?
Accertify can help. Our chargeback management solution has successfully supported eCommerce platforms, iGaming, online sports betting operators, and more. We can help you streamline your fraud prevention and identification systems, steadily reduce the frequency of fraud, and prevent fraud before it occurs. Your players come to your site for a fun experience. Preserving the player experience while making a profit is the two-fold mission of our chargeback management tools.
Request a consultation to learn how you can implement a chargeback management system to reduce fraud in iGaming and Sports Betting.
1 Source: The Sports Gambling Gold Rush Is Absolutely Off the Charts