How Online Gaming Platforms Can Prevent Account Takeovers and Chargebacks
Many iGaming companies aim to grow their businesses while reducing risks and losses caused by fraudulent activities. Online gaming operators, operating under diverse regulations across regions and states, must establish measures to safeguard players.
Nevertheless, it’s advisable for operators to adopt fraud prevention strategies that go beyond the basic requirements. The landscape of cybercrime is evolving, becoming more intricate.
To thrive in this highly competitive and rapidly expanding industry, a strong fraud management system and partnering with the right igaming payment gateway becomes imperative.
Daily challenges for operators include dealing with chargebacks, account takeovers and risky transactions involving deposits and withdrawals. But how do cybercriminals execute these actions, and what measures exist to prevent them? Fortunately, there are effective tactics in fraud management that can mitigate these risks.
The Correlation of Fraud and Online Gaming
The remarkable expansion of the iGaming industry is intrinsically linked to the prevalence of fraudulent activities within it. This sector’s global size has shown an impressive compound annual growth rate of over thirteen parcent largely propelled by the widespread adoption of mobile gaming. By the year 2025, experts estimate its market value to soar past $115 billion.
Examining the growth statistics across different regions sheds light on the industry’s evolution. In Europe, the online gaming market constituted close to 25% of the continent’s total gambling market, with projections indicating a surge to 34% by 2025.
Similarly, in Africa and the Middle East despite an existing value of nearly 5 billion Dollars, forecasts anticipate substantial growth.
The United States, foreseeing a compound annual growth rate of 16% in its online gambling market from 2020 to 2025, reflects the continuous expansion of this sector.
Even in the Asia-Pacific region, where some countries have imposed bans, approximately 37% of the anticipated growth is expected to originate from this area, underscoring the industry’s resilience and widespread influence.
The substantial surge in the iGaming sector has corresponded with a notable uptick in fraudulent activities.
Notably, instances of bonus abuse surged by 72% over the past few years, while account takeovers witnessed a staggering increase as well, resulting in an estimated financial loss of around $12 billion.
Managing fraud prevention while ensuring a seamless and enjoyable customer experience poses a significant challenge for operators within this industry. However, a solution exists in the form of fraud management tactics and aligning with a reliable igaming payment processing service.
Common igaming Frauds faced by Online Gaming Websites
Online gaming platforms have emerged as prime targets for fraudsters seeking to exploit vulnerabilities. Within the myriad of fraud attacks, three particular types stand out as posing the highest risks.
Chargebacks represent a significant challenge for operators, being both labor-intensive and financially burdensome. The online gaming industry faces a distinct form of chargeback known as friendly fraud, which occurs when dissatisfied or regretful customers attempt to reclaim their losses by disputing a valid charge, alleging it as fraudulent.
For operators, combating friendly fraud might seem daunting. It often devolves into a subjective dispute where evidence gathering becomes crucial.
However, modern fraud and chargeback management technologies, along with high risk payment processing solutions have transformed this landscape.
Analyzing user behavior and even subtle patterns like mouse movements can authenticate player identities.
Leveraging such technology enables automatic collection of vital evidence during dispute resolution, streamlining the process for operators, saving time, and significantly elevating success rates in challenging chargeback cases.
Transaction fraud presents itself in various forms within the online gaming sphere. Instances such as deceitful deposits, problematic withdrawals, and other high-risk transactions pose significant challenges to online gaming operators, impacting their profits.
Among these, the withdrawal phase emerges as a critical point where fraudsters aim to convert their illicit gains into real money. However, the dilemma for online gaming operators lies in the manual scrutiny typically applied to each withdrawal, a process consuming substantial time.
While automated withdrawals can streamline operations, they also heighten the vulnerability to fraudulent activities. Therefore, adopting a robust fraud prevention system or igaming payment processing becomes imperative.
Such a system should be equipped to flag suspicious transactions promptly while automatically approving legitimate ones, thus alleviating operators from labor-intensive scrutiny.
Account Takeover Fraud
Account takeover fraud occurs when unauthorized individuals gain access to a player’s account by illicitly obtaining their login credentials. These fraudsters enter the gaming platform using stolen information and proceed to place bets, essentially leveraging someone else’s identity and resources. Consequently, the legitimate account holder raises a valid dispute.
Detecting account takeovers can be facilitated through device intelligence, which accurately pinpoints a device’s geographical location. Anomalies such as logins from foreign locations compared to the typical device location serve as red flags.
To enhance security measures, players can fortify their accounts with multi-factor authentication, requiring two or more forms of identity verification for login, thus adding an extra layer of protection.
If your online gaming platform faces the problems discussed in this piece, it may be time to partner with a reputable igaming payment gateway like Pay.cc. By doing so, you will fortify your entire operations, making sure that you and your customers can send and receive payments with total peace of mind.