Mastercard crackdown

All I can think is that the Credit Card companies are finally utilising their information systems to close down the gaps that merchants have used.

I wrote some major EFT-POS and point-of-sale authorisation systems for about a dozen years and from the early 1990s every credit card merchant and every credit card transaction carried identifying data over and above the finanical information.

In establishing links with both mastercard and visa, for authorisations of all sorts of cards, I was amazed at the quality of their data-mining operation as well.

Beleive me when I say that their data profiling was second-to-none when it came to estabishing cardholder and merchant behaviour, and they could easily tell if a merchant was mis-categorised based on usage patterns and values.

It was only a matter of time before the credit card companies implemented stricter controls to come into compliance with UIGEA, as VISAs corporate base is in San Francisco, while Mastercard are in St Louis.

It was just a question of “when” the Credit Card companies would comply – they have little choice as United States based corporates.

Given the recent high profile issue with the Canadian one-man processor, who was able to process a lot of transactions simply by (ahem) not quite declaring the accurate description of his merchants … I expected a lot of fallout for Banks and card companies over potentially embarrassing revelations.

I may be joining dots together where there are no direct lines, but I’m not surprised to see stricter standards being enforced as a result.

@Dominique 215758 wrote:

But they didn’t HAVE to, UIGEA is not enforced yet and hasn’t really launched for lack of actual guide lines and laws. The only actual federal law concerns itself with sports betting over the telephone. Other than that, some states have laws and some don’t. So far the banks have said that it is not enforeceable because they do not know what laws to enforce. So why are credit cards doing it?

Let’s be clear – the UIGEA has been passed and it specifically outlaws payments to and from “illegal gambling” operations. It’s final date for mandatory enforcement has been set back a few months in order to give banks more time.

You might want to debate exactly what defines an “illegal gambling operation” in a private affiliate forum – but I bet you don’t want to try it in a courtroom against the United States goverment … and neither do VISA or MASTERCARD.
:Cry:

The US Federal government has regularly (and possibly incorrectly) made statements the they consider poker and casino to be illegal – and the recent party poker penalty payments by Mr Diksh!t (name still makes me laugh) just enforce that vision in peoples minds.

The US government is winning by fear, bluster and high profile regulatory court cases in related areas maknig headlines.

As publically owned companies, it would a gross derelection of duty by the cheif officers if they walked into that scrap – especially when they have it within their transaction information to enforce the law.

Additionally, the banks have NOT said it’s not enforcable because “they do not know what to enforce” they’ve said it’s not enforcable because the of the limited amount of data involved in a financial transaction when it reaches the clearing house.

Standard banknig transactions contain just an amount, a destination account, and an orginating bank/branch and sender name – nothing more – and nothing concrete. If the casino/poker sender creates a phony name – then it cannot be picked up.

So the banks are saying it’s not enforceable due to lack of data – and as I said at the time (two years ago?) it going to be a real headache for them to change a format that is several decades old.

Until UIGEA is actually repealed I can’t see any major US financial insitution touching online gambling of any sort – the threats, penalites and headlines are just too risky for corporate America.

A friend from IL just made a deposit with his MC on FT. No problems at all.