|A new rule by MasterCard that blocks merchants from accepting credit card payments through third parties could hit the online gambling industry, already hard-hit by refusals of direct credit card transactions to online casinos.|
Gartner analyst Avivah Litan told USA Today that: 'Unless a settlement is reached, on May 1 Internet merchants and other mom-and-pop firms that rely on third-party billing could miss out on sales via the USA's No. 2 online credit card. And MasterCard holders could have a harder time using their cards at many sites that use PayPal and similar services.”
Many online casinos have been hit by credit card companies’ refusal to process transactions to online casinos, which has led to the popularity of services such as PayPal and Firepay online. Gamblers would pay funds from their credit cards into a PayPal account to get round this, but this option seems to be in jeopardy for MasterCard holders.
According to MasterCard, its 15,000 members, such as banks and credit unions, won't be allowed to process credit card transactions using third-party services such as PayPal. They are used most often by small merchants who cannot afford to take MasterCard, other credit cards or checks, as well as by Internet casinos.
PayPal is the biggest third-party system, with around 13 million registered users, mostly small Internet merchants or people who frequent auction sites. PayPal spokesman Vince Sollitto says PayPal is 'hopeful and confident' it will come to new terms with MasterCard. Visa and American Express, however, still accept PayPal.