FinTech: Klarna Enables Block For Non-Card Gambling Payments
Banks connected to Sofort, a Klarna subsidiary, can now activate customer-initiated, voluntary blocks for gambling payments.
A gambling block helps customers keep in check their own urge to splurge on gambling sites. Gambling blocks were first launched by challenger bank Monzo in 2018 but applied only to card payments. Klarna announced on April 28 that it had now enabled banks to extend voluntary gambling blocks to open banking-driven payments powered by its subsidiary, SOFORT. SOFORT is one of Klarna’s direct bank-to-bank payment methods, used by 75,000 merchants across Europe, including some online gambling and gaming sites. (Klarna)
Most UK banks had followed Monzo’s lead but were still mostly unable to implement the system for open banking powered non-card payments. The UK’s first Open Banking powered gambling block, developed by Monzo and Truelayer last year (who also made the update code public) is now integrated within SOFORT. Banks powered by SOFORT can now identify a payment request from a gambling or gaming company and, if there is a gambling block in place, block that payment, protecting their customers.
Notably, only immediate payments are allowed to online gambling and gaming sites; none of Klarna’s BNPL or other credit products can be used on gambling or gaming sites.
Alex Marsh, Head of Klarna UK said in the announcement: “We’re calling on banks and other open banking infrastructure providers to make this relatively small update which could help protect hundreds of thousands of UK consumers. Open banking has huge potential to increase competition and reduce costs and as adoption grows the industry must move quickly to make changes that can further improve the lives of UK consumers.
UK Gambling Commission survey
The UK Gambling Commission released last week the results of a new survey on gambling in the country. It showed that though participation was on the rise, problem gambling was virtually nonexistent at just 0.2%.
From the report: “The survey found that 25.7% preferred online options, mirroring a trend two years ago. Despite these two figures increasing from last year, problem gambling remains virtually undetectable at 0.2%. That’s lower than what previous surveys determined.”
4,018 adults over 16 across the UK were surveyed on their gambling habits.
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