Visa Helps Designate Payments for Gambling
Credit card giant Visa has assigned a code to transactions involving reloadable cards and digital wallets, the same code used for direct deposits for gambling. In the long run, the move should improve transactions.
As of January 1, Visa has designated payments to reloadable cards and digital wallets for the purpose of gambling with code 7801, the same one used to accept direct deposits to sportsbooks, according to Legal Sports Report.
However, these transactions could result in failed deposits because some banks put a block on them in response to the federal Wire Act. If that happens, gross gaming revenues for sportsbooks could decline by as much as 10 percent, according to payments consultant and Eilers & Krejcik analyst Jerry Rau.
Yet such disruptions expect to be temporary. For one thing, sportsbooks can offer alternative payments from Play+ to Visa Debit.
But long-term, the approach used now by Visa should improve transparency and form a framework for banks to know which payments comes from gambling.
“Does this create a little bit of short-term pain?” said Joe Pappano, CEO of Sightline Payments. “Yes, but this change will inform banks’ rules engines so they know what to do with these transactions. Visa is heavily engaged with the sports betting industry, and hopefully more issuers are coming on board.”
Bank of America, Capital One and Chase banks remain uncommitted to gambling, but Chase now accepts debit card transactions and is expected to expand that to credit in the first quarter, Pappano said. He believes Bank of America will take debit cards for gambling during the quarter as well.