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Secure payment to bookmakers is also possible via direct debit |
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Resume
Dezember 2007 |
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Anyone wishing to sell goods or services over the internet in Germany has to allow for payment by direct debit. Over 65% of all internet payments in Germany are by direct debit, and more than 90% of Germans can pay this way. On the other hand, only 20% of Germans have a credit card. This payment option is attractive for the customer, but conceals a special risk for the merchant, which does not apply to credit cards. Payment may be rejected by the bank for insufficient funds. The merchant is notified of rejection about 3 to 4 business days later. If no notification is received within this period, then the remaining risk of non-payment is effectively the same as with credit cards. While material wares could be sent first after this period, this is not a practical option for digital goods. Where digital goods are concerned, the customer generally wants to download the product (registration service, lottery ticket, etc.), login to the members' site (singles exchange, adult), or have access to his funds (virtual account, eWallet, sports bets, livecam) immediately. Although many digital wares are reproducible without cost, a business loss is sustained if a customer loads up his account, loses the balance on bets, and thereafter the credit to the account is rejected. When a player registers with a sports bookmaker, he must first load his betting account. A customer should be able to load his account by direct debit, so long as the same account is designated to receive eventual winnings. This excludes the possibility of intentional fraud through use of a false bank account. Naturally, the bookmaker could avoid the risk of default by just not granting access to the player's funds within the first 4 business days, but this in not usually in accordance with the player's wish to begin betting immediately. So the bookmaker should build in some alternative security mechanism. It is advisable to authorize the payment with a confirmation–SMS. For this purpose, the customer enters his mobile-telephone number on the merchant's payment panel. This telephone number then receives an SMS with a 4-digit PIN, which the customer must enter on the next page. Similarly, the customer's existence and address should be checked, and his account number and bank validated. In addition to the account check, a credit-worthiness check and scoring system could be employed. These additional checks, however, also involve additional costs, and thus should be weighed against the risk of non-payment, and the amount involved. In general, bookmakers should run an account-check for new customers, without regard to amount. For amounts over €50, a credit-check is also advisable. If the check-algorithms indicate excessive risk of default, then the payment system should offer bank transfer as an alternative, or propose a smaller amount. It's normally sufficient to perform the checks only for the first payment from new customers, and not everytime a customer wishes to transfer money to his betting account. Such checks identify the player and help avoid intentional fraud. Nonetheless, payment rejection for insufficient funds can always happen. In such cases, an accounts receivable management [ARM] system should be implemented alongside the payment system. The ARM system would request the customer to pay the outstanding amount by bank transfer. To avoid time-consuming manual comparison of incoming payments with players' accounts, it is advisable to assign a unique, individual account number for each player. A dunning letter giving the player 14 days to pay the outstanding amount can be sent via email. If no payment is received within this time, a second letter should be sent by post, and an SMS reminding the customer of his debt to his mobile telephone. If, contrary to expectations, these various dunning measures still do not succeed in eliciting a payment, then it is time to refer the matter to lawyers, who can collect the amount outstanding via the courts. Involving a law firm indicates to the delinquent customer the seriousness of the matter. During the collection process, the debtor is added to various global lists of bad credit risks, which automatically reflects negatively on his creditworthiness and can have extensive disagreeable consequences. An ARM-System doesn't cost the bookmaker anything more, since the costs are simply added to the customer's debt. As was demonstrated at the German Payment Congress, it is becoming ever more essential to combine payment-processing with an ARM system in order to sell digital goods and services securely over the internet. This combination of payment-processing, validation of the customer's identity and credit-worthiness, and an ARM-system can make direct debits, the most widely employed method of payment in Germany, an attractive, low-risk payment system for bookmakers.
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