Impact of COVID-19 on Virtual Gambling Sector: ConnectPay Calls to Fortify Payment Security as Industry Fraud on Rise
May 2020 by ConnectPay
Online gambling has increased during the pandemic. Evidently, so did the illegal activity related to the industry. Scammers are abusing the vulnerability of the circumstances, which is reflected by the rise in financial fraud and exploitation schemes. ConnectPay, an online banking service provider, encourages businesses, especially the ones considered to be higher-risk, to make security of payment transactions their top priority in order to build trust with new and existing clients, and protect them from falling victim to fraudulent payments.
Illicit activity concerning monetary transactions has been a long-standing issue for the virtual gaming industry even prior to the pandemic, with financial crime estimated to be at $2.1 trillion per annum. That said, the COVID-19 crisis has brought new challenges as new fraud schemes started to plague various markets. This has influenced some countries, fearing an increase of illicit activity in online gambling, to issue tighter measures for the vendors to protect consumers during lockdown.
“The increased online gambling sessions correlate with the noticeable jump in payment transactions”, explained Liutauras Varanavičius, Head of Business Development at ConnectPay. “When comparing data from January with the stats from April, we have noticed a 30% increase in gambling-related transactions. Even though it’s hard to predict how prolonged will the aftermath of the pandemic be, the necessity of instating more precautionary measures to support secure payments is too apparent to be left unaddressed.”
The surge of online gambling activity has greatly increased the public’s exposure to digital risks. While others are capitalizing on the crisis, businesses have to face the conundrum on how to disassociate from the perpetrators, remain credible and retain their target audience.
“The spike in fraudulent financial activity could hit the sector even harder than others: it’s already under a magnifying glass due to the nature of acquired revenue, thus any association with financial fraud could be leveraged as a pretext to revoke acquired licenses and restrict business”, said L. Varanavičius.
As the global health crisis continues, the need for reliable security measures and prevention of illicit financial flows will only continue to grow. Implementing timely and adequately prepared safeguards to combat arising threats is paramount, as, until brick-and-mortar casinos are once again operational, gambling industry relies on digital-only vendors.
Preserving secure payment transactions could be the difference between remaining operational or having to close up shop. The pandemic has already hampered AML supervision and presented new threats that could aid criminals in avoiding customer due diligence. However, having acknowledged current obstacles enables businesses to evaluate measures that would help avoid being juxtaposed with illicit activity and choose partnerships accordingly.
To keep the scammers at bay, ConnectPay continuously invests in innovative fraud prevention solutions, latest AML safeguards and other smart tools, helping companies in underserved markets to maintain credibility and keep the associated risks to the bare minimum. Furthermore, the company places high emphasis on a thorough screening process: this prevents taking on clients involved in unethical business practices, limiting the grounds for financial fraud. In 2020, ConnectPay is planning to invest additional 750 thousand euros in Anti Money Laundering and Counter-Financing of Terrorism compliance solutions.