US Poker Site Payment Processors: What You Need to Know
The advent of the internet brought prompted the need for payment processors. The old way of paying for things in cash was not going to work with web vendors, at least not in the traditional sense. People needed payment processors to transfer money from their banks to vendors, or they needed alternative ways of turning cash into internet currency, other than a credit or debit card.
Payment processors stepped in to do the job.
A payment processing system is one that a vendor can use to enable their customers to transfer money in the way of a purchase for goods or services. It is as simple – in technology, that term is relative – as one company making the connection between a customer’s bank and the provider of the product or service. A payment processor is an intermediary, a go-between to transfer funds securely and promptly.
Banks themselves offer payment processing via wire transfers and ACH funds transfers. Credit card companies operate much the same way as in live transactions, serving as the transferer of funds via bank debit or loaning the funds via credit. But the evolution of customer needs on the internet created numerous new payment processing systems. Ewallets provide online accounts not necessarily tied to banks, and a prepaid card allows customers to purchase with cash and transfer to a vendor online.
Cryptocurrencies are the latest form of online payment processing. This involves companies inventing their own technology-based currencies, assigning value, and allowing mostly-anonymous transactions using their currencies online.
Payment Processing for Online Gambling
While people use payment processors for all types of goods and services online, this option for online payments came in particularly handy for online gambling.
When the first gambling sites began emerging just before the turn of the century, those operators needed to make it possible for people to play for real money. Play-money gambling, especially for activities like sports betting, had much less appeal than real-money action.
In the beginning, especially during the early 2000s, bettors and players could use some credit cards and most ewallets for transferring money to and from online gambling sites located anywhere in the world. The virtual gaming world was global and very popular. When lawmakers in various countries, specifically the United States, began to realize how much money was flowing to and from those sites, they cracked down on it and made it more difficult.
Today, payment processing remains a multi-faceted industry, even within the gambling industry. Some banks forbid the use of any credit or debit cards that they issue to be used for anything related to gambling, while other banks allow the transactions and even facilitate wire transfers. PayPal continues to change its gambling-related policies, allowing use to and from state-regulated sites but not offshore operators, but even that policy is continually changing and evolving.
Poker Payments Online
Poker players often react negatively to being called gamblers. The prominent role of luck in poker makes many players feel that their game should not be lumped in with gambling games and sports betting, especially since poker operators’ profits don’t rely on players winning or losing, thus eliminating the house advantage.
Even so, most financial institutions see no difference between poker and gambling. Thus, policies prohibiting the use of bank funds or credit/debit cards for gambling certainly do include poker.
Poker players with a decade and a half or two decades of experience remember the Neteller funds seizures of 2007. The United States forced Neteller out of the US market, and it seized funds in the Neteller system to the tune of millions of dollars. Famously, poker pro Isaac Haxton had about $800K stuck in that seizure for quite some time.
More significantly, poker players remember Black Friday, April 15, 2011. It was the day that the United States government seized the funds of major poker sites like PokerStars and Full Tilt Poker. While payment processors weren’t holding player funds at the time, some processing executives were indicted as a part of the crackdown on “illegal gambling.”
These incidents and more have made poker players leery of some payment processors. It is the reason that online players are so careful – and should be – when choosing the method of depositing and withdrawing funds from online poker sites.
Finding the Right Payment Processor
There are many characteristics that poker players want their payment processors to possess and demonstrate. Obviously, they want their transactions to take place quickly, accurately, and safely. But there is more to it than that.
A good payment processor should have experience and a history of reliable service to online customers, especially within the gambling world. They should be able to demonstrate their ability to process funds transfers quickly but also while protecting customer information and banking data. They should charge only minimal fees, if any, to customers rather than poker site operators.
Let’s take a look at a list of things to look for when choosing the best payment processor.
- Experience: A good choice of a payment processor is not one new to the industry but one that has a wealth of experience in moving funds to and from online poker sites.
- Simplicity: Customers should be able to easily understand the process by which the company transfers funds, despite the complexity of the technology involved.
- Reliability: Poker players will testify as to a payment processor’s reliability. Check any social media platform or online poker forum for complaints – or positive reviews – of a payment method. The processor itself should also be able to show good reviews from a variety of customers.
- Timeliness: Most online payments should be processed immediately or within 24 hours. In the day and age of modern technology, there is little excuse for transactions to take days or weeks.
- Security: Payment processors should use the highest level of encryption technology to protect transactions and customers’ personal information. The company should advertise the types of security used and guarantees in cases of hacking attempts or data breaches.
- Fees: Ideally, a poker site operator would assume the fees associated with transactions, especially deposits to their sites. The best payment processors should charge very minimal fees to customers, which is better a set amount rather than a percentage of the amount of a transaction.
- Clarity: Companies that want to handle customer transactions should offer terms and conditions that are easy to find and understand. Ideally, the terms and conditions should guarantee the safe transfer of funds.
- Customer care: Easily accessible customer service representatives are essential for payment processors. Customers should be able to contact someone via online chat, telephone, or email around the clock and obtain quick, accurate answers to questions and queries.
Finally, a financial institution or ewallet should not have terms and conditions that prohibit gambling transactions. This may seem obvious, but some companies (PayPal) process some transactions for gambling-related companies but have been known to seize funds from transactions that management deems “gambling.”
Major Payment Processors Used by US Poker Sites
These are the most commonly used payment processors and the ones that customers most frequently request:
PayPal
PayPal functions as an ewallet but is the most popular one in the United States by far. It serves as a processor for online transactions and has been in business as such since 1999. Based in California, the company recorded nearly $30 billion in revenue in 2023.
This company’s gambling policies have changed numerous times over the years. In 2003, amidst an onslaught of new igaming customers, PayPal cut off all such transactions. That changed in 2010, though PayPal tried to allow transactions only in countries and jurisdictions with regulated gambling. In 2015, the company decided to process transactions for parts of the US with state-regulated online gaming sites. And after the overturning of the Professional and Amateur Sports Protection Act (PASPA) in 2018, the ewallet began accepting sports betting-related deposits and withdrawals.
Several poker players have reported PayPal seizing their funds for things even semi-related to gambling. For example, Chris Moneymaker held money in his PayPal account for a fantasy football league with friends, but PayPal seized those funds for violating the company’s gambling policy. The involvement of an attorney for Moneymaker forced PayPal to release the funds, but the situation demonstrated the uncertainty around PayPal and gambling.
For state-regulated sites that use PayPal, there have been no serious problems reported.
The details of legal PayPal transactions:
- PayPal account can be funded by direct bank transfer or debit or credit card
- Deposits require no fees and appear in the online poker account within 10-20 seconds.
- Withdrawals may require 1.75% of transfer amount in fees and take 24 hours after any internal reviews per KYC (know your customer) requirements
- Must have made a successful deposit with PayPal within 6 months of withdrawal request.
PayPal uses TLS (Transport Layer Security) and HTTPS for secure connections and data encryption for transactions. In addition, users can employ the use of facial or fingerprint recognition, passcodes or PINs, or passkeys to prevent hacking.
Visa & Mastercard
There are two primary credit/debit cards used in the United States – and indeed, around the world. Visa and Mastercard have long histories of providing reliable debit cards for direct use of bank account funds and credit cards for interest-based loans.
Visa, originally BankAmericard, emerged in 1958. MasterCard started as Interbank several years later, changed to Master Charge and then MasterCard. Both have decades of experience and collect tens of billions of dollars in revenue each year.
Mastercard has had the most public trouble with gambling transactions, as a group of plaintiffs sued the card in 2000 for allowing them to gamble at internet casinos and not reimburse them for their losses. The courts sided with Mastercard. Ultimately, Mastercard and Visa have decided to only allow gambling transactions if the site operators can verify their legal status and verify geolocation usage.
While players have used Visa and Mastercard through the years to fund various online poker endeavors, most non-US-regulated sites no longer present this as a payment option.
For a little more about these payment processors:
- Visa and Mastercard can be credit or debit methods.
- Deposits are instant and free.
- Withdrawals are available only for debit and certain cardholders, and they take 5 hours or less.
- Fees for withdrawals depend on the customer’s terms with the issuing bank.
Both Visa and Mastercard use extensive levels of encryption to prevent fraud, and they guarantee that customers will have no liability in the case of fraud, loss, or theft. Issuing banks also employ various levels of passwords and recognition software, as well as two-factor authentication, for customers’ further peace of mind.
Cryptocurrency
When Bitcoin first introduced itself to the world in 2009, many people were skeptical of a virtual currency only available online, decentralized and with no government oversight. But they slowly but surely fell in love with it. Today, there are more than 25,000 other cryptocurrencies available, such as Ethereum and Litecoin.
Poker players believed that this may solve many online poker funding issues, especially with offshore poker sites unregulated within the United States. There is certain amount of anonymity built in to crypto, and there is a distinct lack of regulation and taxation in most countries around the world. Players were correct that it would be a net positive for the poker industry, as it has become one of the most utilized methods of depositing and withdrawing from poker sites.
There are numerous reasons for crypto’s popularity, especially involving Bitcoin. The primary reason that poker players use it so frequently is that it is not tied to a bank account, meaning there is no paper trail. It is also the fastest withdrawal option for poker winnings and one with the lowest amount of fees.
While cryptocurrencies can feel overwhelming to some, as they involve mining and trading, poker sites like Americas Cardroom do much of the heavy lifting for their players and walk them through the process.
Bitcoin and crypto options are currently not available for state-regulated poker sites in America, but all offshore poker operators accept Bitcoin. Most even accept Ethereum, Litecoin, Tether, and more.
- Most sites offer Bitcoin and a variety of crypto payment processing tools for player deposits and withdrawals. Some sites even offer special bonuses for those who use it.
- Deposits usually start higher than other payment options, such as at $50, but they are instant.
- Withdrawals are faster than other methods, as they take less than one hour.
- Fees for all transactions are generally low but vary depending upon network congestion.
The safety of crypto transactions depends on the type of wallet used, though most do practice customer identify verification processes to prevent money laundering. However, there are few legal protections for cryptocurrencies because of the lack of insurance from the US government. And considering it is a value-based currency, any crypto can be worth a certain amount today and half of that tomorrow. The market decides its value.
Poker Site and Processor Choices
One of the two most important factors in securing the safety of payment transactions is the choice of an online poker site.
A poker player who chooses a site – one of the few available – in a state that regulates its own igaming industry will have more protections. The state and federal governments protect customers who use licensed payment processors.
Most poker players don’t have those state-regulated options, however. They often choose poker operators based offshore, ones that are regulated by non-US entities. While they are often reputable, and the sites and regulators have decades of trust built with the poker community, there are risks involved. For example, if a site shutters and does not issue honor withdrawals, customers have little recourse. This is also the case if a payment processor mishandles funds.
The other important factor is the payment processor that the player chooses. Cryptocurrencies are laden with inherent risks, but the benefits may outweigh those risks in the eyes of some players. PalPal and credit/debit cards like Visa and Mastercard are much more reliable and secure, but they don’t usually allow transactions to offshore gambling sites.
Tips for Safe and Secure Transactions
There are steps that poker players – any consumer, actually – can take to protect their online transactions. These require a bit of extra time on their part, but they provide extra layers of protection against hackers and glitches in the matrix.
- Use strong usernames and passwords, preferably with a unique mix of numbers, letters, and symbols. Use different ones for different payment processors, and change names and passcodes regularly.
- Enable mobile password entry or fingerprint or facial recognition if banking from a mobile device.
- Do not use unsecured wireless connections for any banking-related searches, account lookups, or money transfers.
- Enable two-factor authentication, such as the aforementioned fingerprint or facial recognition, or a secondary passcode via an authenticator app. People can also require a confirmation code be sent to an email address or mobile device to verify the user’s identity before the payment processor allows any transaction.
Online gamblers and poker players must choose online operators and payment processors wisely. By doing the proper research, finding the right matches for each person, and using additional protections for online accounts, they can further protect their personal data and funds.
