Guidance on credit card payments made through Money Service Businesses (MSBs)
The Gambling Commission’s recent ban on credit cards extends to payments for gambling made by credit card through any money service business (MSB).
The new licence condition 6.1.2 prevents gambling operators from accepting payments by credit card either directly or through any MSB (such as an e-wallet or other fintech and electronic money institutions enabling e-money transfers) which allows credit cards deposits.
One of the key intentions in banning gambling with credit cards was to maximise the levels of friction during the process of accessing and using borrowed funds for gambling, in order to reduce the risk of consumers experiencing harm from gambling with borrowed money.
It is important for operators to ensure that the credit card ban cannot be easily circumvented by simply topping up an e-wallet or online money transfer account directly from a credit card, where those funds could then be used for gambling with very little friction in the transactional process.
Gambling Commission explained in the credit cards consultation and in responses that this would mean that operators could not accept any payment through an MSB unless the MSB has prevented the use of credit cards for gambling through their services. This includes, for example, circumstances where an MSB allows its customers to transfer funds from a credit card into a wallet or account which could then be used by the customer to make gambling deposits.
For clarity, and further to specific queries raised by operators, this includes electronic money institutions such as Revolut which has confirmed that its customers can add money using credit cards. Operators must therefore put systems in place to prevent gambling payments from these products.
However, it is important to note there may be other e-money businesses which operate a similar service to Revolut and which also allow their customers to make credit card deposits which then could be used for gambling.
Operators are therefore reminded that they must take the following course of action before accepting customer payments via any MSB (including through any card payment instruments issued by those MSBs to its customers):
- operators must satisfy themselves that customers of that MSB cannot fund their e-accounts or e-wallets with credit card deposits and then use those funds for gambling.
- operators will need to reject all payments made through such MSBs that have not developed a ‘block’ to prevent credit card deposits being used for gambling through their e-account or e-wallet facilities.
