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Q&A with Joe Pappano

Senior Vice President, Director of Merchant Sales and Managing Director, Vantiv Gaming Solutions

Q&A with Joe Pappano

Payment processing has quickly become the Achilles heel of iGaming in the United States. If players find it difficult to deposit and withdraw money with their favorite online casinos, they quickly lose interest. There are few payment processing packages as complete as the one offered by Vantiv Gaming Solutions. Joe Pappano and his team have been working in the field for many years, and Vantiv has designed solutions especially for iGaming. Pappano explains the roots of the problem and reveals that there is light at the end of the tunnel in a group consisting of all the major players in the space. He spoke with GGB Publisher Roger Gros at the GGB offices in December. Pappano addresses the fraud protection, money laundering oversight and more details of the transaction designations for online gaming. To hear a full podcast of this discussion, visit

GGB: Let’s start with a thumbnail description of Vantiv. You are active in many other industries besides online gaming, aren’t you?

Pappano: Yes, we are currently the third-largest merchant acquirer and facilitator of the movement of electronic transactions in the United States. Currently we move over $16 billion in electronic transactions, and we have been doing it over 40 years through our proprietary platform. We’ve taken this well-polished, disciplined infrastructure and leveraged it within the gaming ecosystem. We are a technology company, ranked among the top 20 technology companies by Forbes in 2013.

How does Vantiv Gaming Solutions serve the industry?

We focus on six market segments: casinos, social gaming, fantasy sports, advanced deposit wagering, state lotteries and the evolution of iGaming, including online poker, gaming and bingo. We have a great résumé and experience in all those segments.

Tell us why electronic transactions have historically been an issue with gaming.

Card acceptance within land-based casinos only happened in a couple of areas: either a cash advance at an ATM or at the cage, and the use of cards in the non-gaming areas of a casino—hotel, restaurants, retail, etc.

That is changing quickly, and presenting casinos with the next generation of player who is now walking in the doors. The technology that is going to create that omni-channel approach is just beginning. How can I take the activity that occurs online or on a mobile device and tie that back seamlessly to my brick-and-mortar casino? That’s an area on which we are really focused.

Where is the gaming industry today in utilizing the know-your-customer (KYC) technology?

The gaming industry is still antiquated when it comes to this technology. In all other businesses, more transactions are occurring online or on a mobile device, and you still have that retail presence. That same ecosystem can exist in gaming by minimizing payment expense and discovering new ways to drive revenues by better understanding your customer. In my 20-year career with Vantiv, I have never seen a better alignment of alternative payments, the digital wallets, the mobility of players, and the ability to truly know your customer. It’s a convergence of all these kinds of play.

What’s the Vantiv solution to the problem of payment processing in online gaming?

If you backtrack for seven years, since 2006, every financial institution has been conditioned that processing or facilitating an online gaming transaction is illegal. There were penalties and great oversight to make sure this didn’t happen.

But now, iGaming has only been available in three jurisdictions for seven months. And if you add up the population of those states, it’s less than 5 percent of the nation.

It’s a marathon, but everyone wants instant gratification, and we are walking each and every transaction to its final conclusion.

But today, financial institutions do not understand the scrutiny and the layers of security that exist for internet gambling. They don’t understand the licensing process, the effective controls surrounding KYC, geolocation, device fingerprinting, IP, underage and more.

Every month since the launch of iGaming in Nevada, the acceptance rate for online transactions has been improving. We are seeing banks show up with approvals they hadn’t approved before. We are seeing the cards educate the issuers, and that’s helping. So it is working; it’s just taking longer than we want.

We are confident that you will see changes in the merchant verification value (MVV) designation in online gaming, lotteries, race bets and more. It’s a marathon, and everyone plays a role in this. It’s working, and Vantiv will help to get the message out to all the players.

Are there short-term solutions?

Sure, there are different ways you can go that avoid these issues but put the onus on the customer. We’re trying to get that MVV designation to show the issuer that the parties are licensed, have provided the appropriate legal opinions, operate in legal jurisdictions and have the effective controls in place.

How long before this issue is addressed by the banks and credit card companies?

Actually, for the first time, as of last month, all four card brands—Visa, MasterCard, Discover and Amex—have come together to create a group that will work together to create one uniform scheme to oversee online gaming. There may be multiple codes, but it’s the first time something like this has happened. They’ve come together because they realize that online gaming is happening and it represents a tremendous growth opportunity.

What is Vantiv doing to prevent the hacking episodes that we saw late last year with retailers like Target?

We offer point-to-point encryption, which means repeat players never have to worry because the card data is not stored by online gaming operators. Those transactions go through us, and we have a well-fortified infrastructure that protects the integrity of the transaction and the data. We have invested millions in preventing these kinds of attacks.

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