One of the biggest bottlenecks for people who like to gamble online is payment processing. You have situations where fees and blocked payments can keep players from having an optimal experience, and Fraugster is a startup that looks to solve a lot of those issues. While they aren't centered around online gambling, they do have a lot to offer this industry because of how they are shaking things up. They've recently acquired $5 million in funding that is going to help them to expand even further, and this could eventually be a popular processor for online casinos.
Details on the Investment
These funds have come from Earlybird, an international venture capital fund. They are now the lead investor on the project, and they are very excited to be in this role. They have a lot of faith in the chances that Fraugster does the things they're setting out to do, which largely involve changing how the fraud end of online payments are handled.
Their argument is that there are very outdated methods being used to detect fraud, which is one of the major sources of revenue loss for companies in that particular sector. Moreover, these older methods also produce a lot of false positives, relatively speaking, which cost the companies even more. The idea is that they believe they can use a custom, self-learning algorithm that can keep up with the new methods of fraud better than algorithms that learn much more slowly.
What This Means for Players
Players who are reading this have reason to be somewhat excited as well. Better payment processing options will help players in two ways. First, it will put them in a position of paying lower fees, since Fraugster is looking to use their methods to lower the rates of fraud and false positives, which cut into their profits. Second, having another serious option out there, particularly if it's competitive, will always be in the best interests of the players since it will increase competition. This creates a pressure to drive down fees, increase the ease of use and make sure that players are getting the best overall experience possible.
Press Release, Israeli Payments Startup Fraugster Raises $5 Million gamcrowd.com, January 27, 2017