As technology continues to provide more ways of paying for goods and services, people have taken to using debit cards, apps, and even cryptocurrency instead. But one thing that maintains its popularity through it all is the credit card.
Not only do people like to use credit cards to buy something now and pay for it later, banks that issue those cards often offer incentives, like airline miles or points to be exchanged for other goods.
Bank Australia, however, decided to dictate the type of spending allowed on the credit cards it issues. Gambling-related purchases will be denied as of December 1, 2020.
The logo and phrase associated with Bank Australia is “Responsible Banking.” What does that mean? The bank’s website says that the bank intends to use its position as a profitable bank to “create mutual prosperity in the form of positive economic, social, environmental and cultural impact. We’re here to benefit our customers, their communities and the plant.”
Bank Australia admits to refusing to do business with “industries that do harm,” which includes those involved in fossil fuels, live animal exportation, arms/weapons, tobacco, and gambling.
We’ll get back to that.
In turn, the bank makes an effort to loan money to individual customers, along with those involved with nonprofit organisations, housing for people with disabilities, more accessible housing developments, and renewable energy projects.
Evolving Position on Gambling
“Our customers have told us they’re concerned about the harm caused by problem gambling. One step we can take to tackle this issue is to rule out lending to the gambling industry – a position that 87% of our customers support.”
The overall goal is to create a bank that doesn’t support industries that do harm. Bank Australia wants its customers to know that their money doesn’t mingle with that of companies involved with gambling.
Interestingly, though, the page on the company’s website dedicated to gambling also reads:
We know that many people choose to gamble and we respect their freedom to do this.”
Credit Card Ban
This month, Bank Australia messaged its customers to inform them that “gambling will no longer be authorized on your Bank Australia Visa Credit Card. This includes, but is not limited to, pokies, online gambling, casinos, government lotteries, and horse and dog racing.”
The message went on to say that credit, a form of debt, shouldn’t be used for gambling. The plan is an expansion of its responsible banking policy.
Bank Australia noted that it didn’t take the decision lightly but engaged with stakeholders and customers (listed at approximately 165,000) and conducted proper research. In the end, they found that the “overwhelming majority” supported blocking gambling transactions on credit cards.
As mentioned, the ban will begin on December 1, 2020.
Following a Trend
More than one year ago, Macquarie Bank did the same thing. As of July 1, 2019, credit card users could no longer charge anything with gambling or lottery merchant codes. That bank went even further to cap cash advance balances at $1,000 to keep people from accumulating too much high-interest debt.
Organizations like the Alliance for Gambling Reform pushed other banks to follow suit.
ANZ (Australia and New Zealand Banking Group) updated its gambling policies in July 2019 to restrict transactions on credit cards related to gambling or gaming. Instead of banning them outright, they decided to decline said transactions on credit cards that were already at or above 85% of their limit. In addition, if the gambling purchase would put that person’s balance over 85% of their limit, the bank would decline that purchase as well.
Suncorp, Bank of Queensland, and others have implemented similar bans and/or restrictions.
Always a Catch?
There’s almost always a catch, a way around the rules. This isn’t exactly that, but it is a way for customers to use Bank Australia for gambling purchases. They can still use their debit cards to transfer money to lottery retailers, online gambling sites, or pokies clubs.
Bank Australia cannot exactly ban its customers from making an informed, adult decision to spend money – money that they have in their bank account – on gambling. Debit cards incur no debt or accumulate interest, so this remains an individual choice.
Groups like the Australasian Association of Convenience Stores have stood firmly opposed to the credit card ban but have had little impact on decisions by banks like Bank Australia.
If the customers support it and the bank doesn’t lose too much business over it, other financial institutions will likely follow along. The trend has begun, and anti-gambling organizations have shown their power and influence.