From Chargebacks to Identity: How Alternative Payments Are Redefining Fraud Prevention in iGaming

For years, fraud prevention in iGaming has been closely linked to card payments. Operators invested heavily in preventing card-not-present fraud, managing chargebacks, implementing 3-D Secure, and recovering revenue through chargeback representment processes. Success was measured by fraud rates, chargeback ratios and payment acceptance.

But as the global payments landscape evolves, so too does fraud.

Nowhere is this more apparent than in Latin America. As newly regulated markets such as Brazil experience explosive growth, operators are rapidly adopting instant payment systems like PIX alongside other local payment methods. These payment rails offer a dramatically different customer experience from traditional card payments—and they are fundamentally changing where in the payment funnel fraud occurs.

The lesson for operators is an important one: fraud has not disappeared. It has simply moved.

LATAM's Growth is Reshaping Global iGaming

Latin America has quickly become one of the most attractive growth regions for the global iGaming industry. Regulatory reforms in Brazil, where only federally authorised operators have been permitted to operate nationwide since January 2025[1], and Peru, which introduced a comprehensive framework for remote gaming and sports betting[2], have encouraged greater investment in locally licensed operations and compliant payment infrastructure.

This, combined with increasing smartphone penetration[3] and digital banking adoption[4], have created significant opportunities for operators expanding internationally.

Unlike many mature European markets, however, LATAM has not built its payments ecosystem around credit cards.

Instead, consumers increasingly favour real-time bank transfers, digital wallets and locally preferred payment methods. Brazil's PIX has become the standout example, processing billions of transactions annually and becoming the preferred payment method for many online consumers, including iGaming players.

For operators entering the region, localisation is no longer just about language, marketing or compliance. It increasingly means adapting to entirely different payment behaviours.

Europe's Fraud Model Was Built Around Cards

European operators have spent decades refining fraud controls for a card-centric world.

Traditional fraud strategies typically focus on:

• Card-not-present fraud

• Stolen payment credentials

• Friendly fraud and chargebacks

• Payment authentication through 3-D Secure

• Chargeback prevention and representment

• Optimising authorisation rates while managing fraud losses

This approach makes perfect sense in an ecosystem where payments flow through Visa and Mastercard, disputes can occur weeks after the original transaction, and recovering revenue is a critical operational process.

Fraud prevention, in many cases, begins at the payment itself.

Instant Payments Change the Equation

Instant payment systems work differently.

Rather than entering card details, customers authorise a payment directly from their bank account. Funds are transferred almost immediately, settlement occurs in real time, and traditional card network dispute mechanisms generally do not apply.

For players, this creates a faster and more seamless experience.

For operators, it reduces payment friction and significantly lowers exposure to traditional chargebacks.

However, eliminating one fraud vector does not eliminate fraud itself.

Instead, fraud moves earlier in the customer journey.

From Payment Fraud to Identity Fraud

When chargebacks become less of a concern, operators naturally begin asking different questions.

Instead of asking:

"Was this payment made using a stolen card?"

They increasingly need to ask:

• Is this customer who they claim to be?

• Is this a synthetic identity?

• Has this account been created to abuse bonuses?

• Is this account linked to organised fraud?

• Could this account present future AML or regulatory risk?

Identity becomes the new battleground.

This places greater emphasis on customer onboarding, Know Your Customer (KYC) processes, document verification, behavioural analytics and continuous account monitoring.

Fraud prevention no longer starts when a customer makes a deposit.

It starts when they create an account.

Consequently, control placement shifts to earlier in the customer journey, at signup, as well as later, at withdrawal.

Brazil's PIX Provides a Blueprint

Brazil's introduction of PIX illustrates how quickly payment innovation can reshape fraud prevention.

Launched by the Central Bank of Brazil in 2020, PIX rapidly became one of the world's most successful instant payment systems. Within a few years, it had become the country's preferred method for many everyday transactions with over 80% of the population having used PIX by 2025, including for online gambling deposits[5].

For operators, the commercial benefits are clear:

• Faster deposits

• Reduced payment costs

• Lower friction during checkout

• Minimal traditional chargeback exposure

But Brazil isn't an outlier. It's setting the pace for a regional shift towards instant payments.

• Mexico – SPEI processes millions of real-time bank transfers daily and continues to expand across digital commerce.

• Peru – Yape and Plin have become everyday payment methods for tens of millions of users.

• Colombia – Transfiya's growth and the launch of Bre-B are accelerating nationwide instant payments.

• Argentina – Transferencias 3.0 is driving interoperable real-time payments across banks and digital wallets.

For iGaming operators, the message is clear: instant payments are becoming a defining characteristic of the LATAM payments ecosystem - not just a Brazilian success story.

Yet many operators also discovered that payment security alone was no longer sufficient.

With payments becoming immediate and largely irreversible, greater attention shifted towards identity verification, account creation, document authenticity, account takeover prevention and ongoing customer monitoring.

The payment itself had become more secure.

The customer behind the payment had become the greater uncertainty.

Europe May Be Heading in the Same Direction

Although Europe's payments landscape remains heavily card-based, change is already underway.

Open Banking, account-to-account payments and SEPA Instant are gradually becoming more widely adopted, particularly in markets such as the UK[6] and the Netherlands[7].

As these payment methods mature, European operators may begin facing many of the same fraud challenges already emerging across LATAM.

Rather than preparing for chargebacks after a transaction occurs, operators will increasingly need to establish confidence before funds are ever deposited.

LATAM may therefore provide a valuable glimpse into Europe's future.

Building Fraud Strategies for the Next Generation of Payments

As payment infrastructure evolves, fraud prevention strategies must evolve alongside it.

Operators expanding into instant-payment markets should consider shifting investment beyond traditional payment controls and towards broader customer risk management.

That includes:

• Stronger identity verification

• Intelligent KYC and document review

• Behavioural and device intelligence

• Transaction monitoring

• Account takeover prevention

• Ongoing customer risk assessment throughout the player lifecycle

The objective is no longer simply to prevent fraudulent payments.

It is to establish trust in every customer relationship from the very first interaction and to re-establish this trust at key points in the customer journey where loss might/can occur.

Conclusion

The evolution of payment methods is reshaping the fraud landscape for iGaming operators.

Europe's card-first fraud models were designed for a world where chargebacks and disputed transactions represented the greatest financial threat. LATAM's rapid adoption of instant payments demonstrates that as payment friction decreases, fraud increasingly shifts toward identity, account integrity and customer lifecycle risk.

For operators expanding across regions, the implication is clear: successful fraud prevention cannot rely on a single global playbook. As payment ecosystems become more diverse, fraud strategies must become more adaptive.

Those that recognise this shift early will be better positioned not only to reduce fraud losses, but also to deliver faster, safer and more trusted player experiences in an increasingly competitive global market.

At ChargeForwards, we help operators stay ahead of that shift. From chargeback prevention and payment fraud to identity verification, KYC orchestration, bonus abuse and account risk, our platform brings together the right tools for every stage of the player lifecycle. Because the operators that win in the next generation of payments won't be the ones reacting to fraud - they'll be the ones preventing it before it happens.