Different Types of Gambling Site Payment Methods
The online gambling industry is really quite a marvel when you think about it. All the way back in the mid-1990s, when the Internet was barely in people’s homes, and many still didn’t quite understand what it could be used for, a group of folks realized that they could create software that would allow you to gamble without having to leave your home. Now, to do that, you would have to be able to put real money into your digital account. This would turn out to be one of the biggest leaps of faith that any individual would make – sending your personal banking information over a wire to an unknown source to pay for your gambling.
Of course, we all know what has happened with online payments over the last 20 years. Today, people pay online for basically everything, and it has become second nature for us to have our banking information stored on these sites. However, even though the online gambling industry can be credited with being one of the earliest adopters of online payment processing, in certain areas it has faced a more uphill battle than any other industry. This page will give you an outline of the industry – what payment processing looks like today, as well as links to details about many of the companies in the space looking to help you make your real money deposits.
US-Friendly Deposit Methods
When we talk about all the deposit options that are available in the online gambling industry today, the easiest way to separate them is by region. Specifically, as a result of the UIGEA bill, we split our deposit methods into two groups – US-friendly and non-US-friendly. Now, many of the methods you see on the US list are, of course, still available in other countries.
Despite all the challenges that have been faced in the online gambling industry in the United States, it is still a huge business with millions of dollars of deposits being taken in daily. Americans do have to put up with the risk on the operator going out of business, which at times can dissuade them from making large deposits. Operators, on the other hand, must pay processing fees that are significantly higher than in other countries given the complexity of trying to process cards from American banks in light of the law.
Over the last few years, there has been a major shift in the way money changes hands online. Back in 2009, a new and decentralized form of currency came to prominence called cryptocurrency. This highly secure ledger-based method of paying for goods and services took off with the first currency, Bitcoin. Today, there are hundreds of coins available on the market. The online gambling industry was one of the first to fully embrace this new technology, especially for processing US deposits. However, these digital currencies are also a commodity and have faced highly volatile valuations over the years. Below is a list of many of the more popular cryptocurrency deposit options.
Non-US Payment Methods
The rest of the world has had a much easier time with online gambling transactions. A lot of this, especially in Europe, comes from much stricter regulation of the industry, which has forced operators and payment processing companies to comply and be licensed to do business. Although the licensing process can be costly and cumbersome, once a site is licensed it’s going to be paying far less in processing fees than those taking action in the US.
Of course, there are many more currencies to worry about in regions like Europe, and that means that deposit options can also be tailored to a specific country. As you can see from the list below, there is no shortage of deposit methods available for online gamblers outside the US, and we have provided details on all of these.
A Brief History of Depositing Money at Real Money Gambling Sites
Back in the 1990s, there was only one deposit method for players to choose from at online casinos and sportsbooks (that is all that existed back then, by the way). Credit cards were a product that most people had in their wallets, and since people were able to make electronic payments in retail locations (we had come a long way from the old physical machines that took a copy of your card details), taking that technology and porting it online was not as tough as you might think. The bigger challenge was convincing someone, who barely understood the internet, that sending this information into a black hole (now known as the cloud) was safe and secure.
Despite early pushback, the desire to gamble without going to a casino was stronger than the fear, and with that, the real money online gambling boom had begun. Players from all over the world were downloading casino software, or installing it from a CD, and connecting to the internet with their dial-up connection to make deposits and play. We won’t get into the challenges of playing on such slow connections (that’s for another page).
Credit card companies loved this new flood of transactions, with operators very willing to pay the fees that came along with them. However, some problems started to pop up – mainly fraudulent behavior. As the methods of verifying an account were nowhere as sophisticated as they are today, it was only too easy for someone who stole a card to create a casino account and use it to play online. Also, there was an issue of age verification – not having the right checks in place meant that children could take their parents’ cards and play without permission (and illegally, we might add). This resulted in a lot of chargebacks from cardholders, which did not please the credit card companies at all. Rates started to skyrocket, while online gambling companies scrambled to find a solution to their verification process.
Of course, this also made it difficult for someone without a credit card to make a deposit at an online casino. Here is where the folks from PayPal stepped in. They created a safe and secure online banking system that was a peer-to-peer system. Once you created a PayPal account and verified your bank and personal details, you could send money to anyone with the click of a button without having to input your banking information again. The gaming industry ate this up, and before anyone realized what was happening, over 60% of all the online gambling transactions in the United States were being run through the PayPal system.
This all seemed too good to be true, and it was. PayPal was also being used almost exclusively for people to complete purchases on an online auction site called eBay (you may have heard of them), and so they decided to make an offer to purchase PayPal. However, in the terms of the agreement, the payment company would have to stop taking online gambling transactions. Within 60 days of the deal agreement, the online gambling world was once again scrambling to find alternative solutions.
Fortunately, the success of PayPal spurred significant development in the space, and e-wallet solutions like Neteller started to become viable options. The idea of giving your data to a company to create a more anonymous third-party digital wallet, then using that wallet to fund your gambling accounts (and for any other online payments) was catching on, and these companies started growing like a wildfire.
UIGEA – The Game Changer
Everything was growing exponentially in the online gambling market, especially in the United States, where online poker had taken off and seemed to be everywhere. Unfortunately, the market in the US was unregulated, and many in the federal government were looking for ways to shut the industry down.
While there were never any laws added expressly making online gambling illegal, the government did figure out a way to choke off the supply of money flowing offshore. In October 2006, the Unlawful Internet Gambling Enforcement Act was passed into law, making it illegal for US banks to process gambling transactions. This crippled the industry in the States, forcing many of the market leaders out of the space. While many stuck around and found ways to make it work (also for another page), it became clear that funding an online gambling account for Americans was going to be a cumbersome process.
What to Look for When Finding a Deposit/Withdrawal Method
Ok, now that you have been brought up to speed on how payment processing came to be, let’s talk about the deposit methods you will find at an online gambling site. When you are researching sites, you can read our reviews and see a list of all the available processing options at any gambling site. However, as many of these are regional products (especially in Europe), you can also just head to the banking section of a website, where due to your geolocation, you will see the trimmed list of deposit methods available for you in your area.
Still, there could be dozens of potential processing solutions available to you. What makes one better than another? Well, here are three things you should think about when you are selecting a payment solution.
This applies more on the withdrawal side, but it could also ding you when you are making a deposit at a site. Credit cards may charge you as a cash advance instead of a purchase, which will cost you more in interest. Also, many of the e-wallet companies charge you a small percentage when you fund your account. All of this adds up, especially when you are planning to try to make a return on your cash. Make sure to read all the terms and conditions when you are planning to choose a payment provider.
Many e-wallet companies require a holding period to verify who you are before allowing you to use your new account to a make a deposit at a real-money gambling site. These delays can be a huge pain especially if you’re trying to make a time-sensitive sports bet. Look for the options that give you instant access to your account and funds so you can make your deposits easily.
While you can never be sure which companies are going to be compromised by hackers, you can do some research to see which companies are the best prepared to handle it. With so many security breaches recently, you also want to find the companies that need the least amount of your personal information to create an account. If you are very concerned about this, you can always lean toward the pre-paid card options where you pay in cash for the anonymous account.