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How German licensing affects White Label operations

German gambling license AML and Responsible Gaming requirements are strictest comparing to other jurisdictions.

This number of strict rules intended to protect players. These measures include a €1 per spin stake limit for online slots. In addition, each spin must last at least five seconds, no autoplay function will be allowed, and licensees will not be able to offer slot jackpots. Despite on above mentioned, operators must also create automated early detection system for gambling harm.

Under Germany’s AML act, operators are required to identify all players and make sure that minors are excluded. Authority demands to use video identification tools to prove that the real player opens an account with operator and to prevention the participation of underage players.

Mandatory spending cap, which can be no more than €1,000 per player, across all sites is also specific requirement related to German license.

Licenses should also appoint MLRO (Money Laundering Reporting Officer), which is required to prove the expertise as well as German language knowledge.

Anonymous means of payment, such as prepaid vouchers, are not permitted by law. However, some providers, such as Paysafecard, have an e-money license and maintain customer accounts with a full KYC process that removes the anonymity. This means that this payment method can still be used.

Payments in Germany

In terms of money laundering regulations, we must observe a large number of requirements, including requirements related to payments.

For depositing money into the account, the following applies: transactions are only permitted from accounts held with payment institutions in the name of the players. Depositing via anonymous payment methods is prohibited.

Using open banking payment methods

A very popular payment method in Germany is online bank transfer. Methods such as Sofort, Giropay, and Trustly comply with the legal requirements of the State Treaty on Gambling.

Sofort, which is the market leader for online bank transfers, has recently announced an open banking partnership with Brite Payments. Launching in July 2022, the new partnership will see SOFORT’s bank transfer product complemented by Brite Payments’ instant payout solution. Operators will be able to facilitate instant payouts through SOFORT’s bank transfer software. This aims to enhance the customer journey, making it seamless and frictionless.

eWallets

Such known e-wallets in gambling like Skrill, Neteller, and MuchBetter have already developed the tools for KYC data match to comply with the legal requirements.

What about Chargeback fraud in iGaming?

Chargeback fraud, also known as a "friendly fraud" - occurs when a legitimate customer files a dispute under false pretense to recover money he spent with the online casino.

"Friendly fraud" term is used as a customer disputes the chargeback of funds with their bank only after making deposits to their account, losing money, and having regrets.

When a customer opens a chargeback dispute, the most common information they provide to a bank or card issuer is that they state their card was stolen, payment was not authorized, and deny making the following transactions.

The other chargeback issue facing iGaming operators is legitimate chargebacks because of stolen identities. The legitimate cardholder sees the surprise charge on their statement and submits a dispute. Since operators aim to balance user experience against loss risk, it can be a losing battle.

Chargeback fraud is payments department operators' daily battle. Providing excellent customer experience and authenticating users is crucial to preventing chargeback abuse and fraud. Unfortunately, to refrain from fraud, some dispute in customer experience is needed. However, we should always remember that too much dispute turns legitimate users away.

For online gaming operators, it is a daily challenge to prevent any type of fraud. To prevent chargeback fraud, it is a must-have a well carried Know Your Customer procedure. This procedure includes several steps that casinos and operators carry on from the moment the customer joins in.

We use 3rd party service to carry out Know Your Customer procedure and request payment proof for users who deposit via credit cards. Our payment providers all use 3D security for payments, which assures that customers should use authentication services to proceed with payment. Daily payment monitoring helps detect potential payment abuse, which minimizes the further risk of getting chargeback!

All steps taken, led to less than 1% of chargeback received! With our Payments Team, you can be sure that chargeback fraud - is what you don't need to worry about!

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