E-wallets in the world of online gambling are the top alternative to bank cards. PayPal is one of the largest global e-wallet service providers used by Chinese gamblers. With Neteller and Skrill, e-wallets have become popular in local casinos, although China is bent on pushing these out of the gambling market.
In China, 76% of the population use mobile e-wallets. Many online gambling transactions are done through e-wallets, and Chinese authorities have begun to limit this, concerned about the security of those who use these applications.
The main worry remains how e-wallet companies manage users’ deposits. The issue of security has prompted Chinese authorities to impose some curbs on the industry. The bans are expected to hurt the revenue of various e-wallet companies and significantly curtail their rapid expansion.
Here are a few reasons why Chinese authorities have decided to block e-wallets for online gambling:
Security Problems
E-wallet online gambling transactions are prone to risks that usually come with standard mobile transactions. The use of e-wallets has led to a rise in data theft. There have also been cyberattacks on those who store their winnings and other data on e-wallets.
Cybercriminals often look for technological flaws to con users. Numerous apps have been compromised in the past, and e-wallets are no exception. When such occurrences happen, all the money saved in the customer’s account is often spirited away.
Limit Hacking
An e-wallet operates via over-the-air communication. As a result, various devices can be at high risk of being hacked. Criminals today use the RFID and NFC wireless communication devices to pinch numbers. Hackers usually stand close to where the account holder is transacting, making it easy for them to intercept the data. The hijacked card can later be replicated and used elsewhere.
Expectedly, it’s just a matter of time before e-wallets become vulnerable to online pickpocketing. However, cards can be kept safe from RFID criminals by being wrapped in tinfoil. Tinfoil is believed to be able to block skimmers’ frequency.
Ransomware
Ransomware involves a hacker obtaining remote access to a device and all the data stored there. The victim is then held for ransom, being blocked from accessing the system until a certain amount of money is paid to the hacker. Ransom prices vary depending on the cryptocurrency exchange rates and the type of ransomware used.
KYC Obstacle
E-wallets face a significant obstacle because of the know-your-customers (KYC) requirement, which is obligatory for all clients. This requirement went live in March 2018, immediately causing a substantial drop in the volume of e-wallet transactions.
All indicators now point to a new replacement – the unified payments interface (UPI) gambling transactions. The uniqueness of UPI lies in the fact that it doesn’t require the KYC process. This is because UPI works like any other online banking transaction.
Interoperability Issue
Interoperability is another factor that contributed to the ban on the use of e-wallets by gamblers in China. Even after finishing the KYC requirements, there are additional constraints that gamblers face. Currently, it’s impossible to move money from one wallet to another. However, the UPI mode of payments is different.
Most e-wallet providers have taken numerous steps to ensure that this does not happen, although this issue still appears to be on the rise. To guarantee that gamblers enjoy their games without stressing about money and information kept on their e-wallets, the Chinese authorities’ solution was to curb the use of e-wallets in the country.
