Australian-owned Westpac Bank has made the decision to charge higher interest rates on payments made via its credit cards. Customers will now have to pay more interest charges on what Westpac refers to as “near cash” payments which include transactions withdrawn to online gambling accounts.
Westpac to Levy 22.95% Interest on Cash Advances
Any payments that were used to purchase cryptocurrency, or payments made to online gambling accounts, will now fall under the scope of cash advances. A Westpac spokesperson confirmed that most credit card transactions are used to pay online gambling companies.
Currently, Westpac charges an interest rate of 22.95 percent on cash payments made via Hotpoints MasterCard.
Unless a standard Westpac MasterCard holder clears their monthly balance by the payment due date, other regular purchases will incur an interest rate of 20.95 percent.
PGF spokesperson calls for stricter regulations
Westpac’s move to increase interest rates on cash advances appears to have been inspired by the UK Gambling Commission’s ban on credit card payments made to gambling firms.
The Health Promotion Agency reported that online gambling is a popular activity, noting that more than half a million people aged 15 or older have participated in the activity. In fact, with so many operators out there, it is no surprise that punters look for new casino bonuses daily, as advertised on popular sites like NZCasinoClub, which specializes in this field.
According to the commission, the ban was imposed after in-depth research showed that a large number of gambling addicts used credit cards to pay for their obsession with punishment.
The New Zealand-based Problem Gambling Foundation has called for a crackdown on credit card payments to gambling companies in the wake of Britain’s action, along with a planned review of New Zealand’s gambling laws.
Andre Freud, a spokeswoman for the PGF, considered that credit cards motivate problem gamblers to further sink their teeth into gambling when they run out of money. Froude supports a British-style ban in New Zealand and considers it a much-needed measure to curb problem gambling in the country.
New Zealand Ministry of Home Affairs announces audit findings
Froude explained that New Zealand gambling law has pioneered a massive change in online gambling, since it was enacted in 2003. The law has affected how Kiwis engages in online gambling in New Zealand as well as with overseas gambling companies.
According to Froude, the results of a review of online gambling in New Zealand conducted by the Department of Home Affairs are expected to be released soon. It is also looking at regulatory alternatives to curb the spread of online gambling.
A PGF spokeswoman stated that more banks like Westpac should introduce tougher regulatory policies to help tackle problem gambling and help vulnerable addicts protect themselves from another downward spiral.
Froude calls for measures like VGBs from Kiwibank
Regarding Westpac’s latest move, Froude believes it could easily be circumvented because gamblers will use debit cards to avoid paying higher interest on their transactions.
To check the rise in problem gambling incidents, Kiwibank allowed gamblers to put voluntary gambling blocks on their cards in April 2021. The VGBs would act as a deterrent to the heavy borrowing that gamblers might use to satisfy their obsession.
According to Kiwibank’s sustainability report, more than 127 customers have used the voluntary block and avoided annual gambling expenses of about $13,000 on average. Impressed by Kiwibank’s initiative, Froude lobbied other banks to do the same.
Westpac, Commonwealth Bank of Australia and National Australia Banks have all introduced VGBs similar to Kiwibank, but their New Zealand affiliates such as Westpac New Zealand ASB Bank and Bank of New Zealand have not initiated any such measures.
Freud has been involved in such procedure as the VGBs because she feels that the tool can be an effective measure to isolate problem gamblers against gambling addiction. In her words, she would have preferred to collectively encourage banks to take a step towards such a tool.
Increased attention to make customer experience consistent
According to Westpac, the increase in interest rates was to make the experience more consistent for its customers. Other transactions within the scope of cash advances also include sending money abroad and payments made to share investment platforms such as stocks.
According to Leighton Roberts, co-CEO of Sharesies, some investors use the platform via credit card payments.
The Kiwibank Terms and Conditions also stated that purchasing gambling chips or foreign exchange constitutes cash transactions.
Australia and New Zealand Banking Group Limited had its own definition of cash-like transactions. Buying gift cards, travellers’ cheques, foreign exchange, wire transfers, money transfers, and top up gambling accounts are all included in this definition.