Hello, BFI and all 2p2! I am considering the importance and value of starting this thread. At the very least, the online gambling community is safer. If my highest expectations are met, this blows up in NVG, and some of us get rich.

Capinfo and PayEase are now the biggest players in the offshore payment processing world. Within the past year or more if you have used a credit card to deposit on 5Dimes, BetOnline, WPN (Black Chip, ACR), GTBets, Sportsbook.ag, Sportsbetting.ag... the list is extensive to say the least, then you have probably seen Capinfo or PayEase as the descriptor.

These processors have been hugely compromised. If either of these companies have your card information, chances are high that you have or will experience fraudulent charges. At this point, I'm not speculating on the how or why this is happening. Of course there are multiple scenarios ranging from a rogue employee with data access or a systemic intent on the part of company executives to operate this level of fraud.

As to why this is in BFI:
Firstly, it turns out that PayEase and Capinfo are related (Business Wire, 2015). Capinfo is a publicly traded company on the HK exchange. This is one of those penny stocks where you can cover at zero. The question is how. With limited searching, I have not found a broker that will allow me to short Capinfo (HK: 1075). Are there funds or ETFs somewhere with a heavy position on Capinfo? Are there other publicly traded companies in this space to consider which will do well once PayEase and Capinfo are tits up?

I appreciate the community's specific insight on how we can take advantage of this and make some money.

*Note that any casino companies mentioned above are not implicated, and I believe all minus one or two are particularly stand up businesses, industry leaders even. AFAIK all responsibility lies on the cc processors.

Confirmed cannot short
https://www.hkex.com.hk/eng/market/s...st20170331.htm

preamble to to dealing with chinese companies.

i have bought alot of stuff from aliexpress.com.. the chinese amazon/e-bay.

very happy with the experience except for the fact that some of the stuff took 4.5 months to get delivered. these were "valentine's day specials". not sure they understand the idea of valentine's day. we need the stuff now or very shortly - more expensive shipping is fine but they don't have good options. they just have free - 2-3 months - and $40 for 3 week delivery. at least to canada.

sorry for the preamble....... but have had my first negative experience with credit card fraud recently. i wondered where it came from and this was my first thought BUT it seemed to emanate - the purchases at least - from toronto canada so must be some other source i'd think. fyi, i live in vancouver, canada - 3,000 miles from toronto.

what are the most common ways people get your credit card # these days? hacked wifi? waiter/waitress with good memory? bank employees?... i just can't think of that many instances where someone has access to your card for an extended period of time away from you. the old days for sure, stealing credit card #'s were easy.

Thanks for your reply, and it helps me reiterate a significant point that the merchant descriptors used in these fraud cases are fictitious themselves. Clearly the defrauder's goal is to get the charge immediately authorized, so the charge may appear like it is from a Toronto merchant when it is in fact entirely phony.

Examples of the charges that I first noticed appeared to be from a major hotel chain in a city over a thousand miles away from me or a pizza parlor on the other side of the country.

Obviously I do not work in credit card fraud, and I suspect this is a typical practice that has been going on for decades.

To answer your question, in general the two most common ways of stealing credit card information are through skimming devices or leaked data. Fraud committed by dishonest employees stealing a few credit card numbers pales in comparison to these two types of theft, and I'd imagine is almost negligible in the fraud prevention / investigation world.

Getting back on track, credit card fraud is common and unoriginal. My intent here in BFI is to figure out a way to capitalize on what I bet will be a catastrophic failure of Capinfo (HK: 1075) and to possibly see if there are other ways to capitalize on disreputable payment processors acting in the online gaming space. One such example was with Zip Payments at the height of the 2008-2009 financial crisis. They were the primary payment processor for Sportsbook.com, and it turned out they had about $7.5M on deposit with Nevada State Bank.

didn't mean to derail the thread.... the credit card fraud was a toronto consumer and one of the 2 sellers was a well-known toronto merchant. edit: i should have said it appeared as a well-known merchant, as per your comment

i will reread your OPost and see if i can add anything useful to that question.

OP, what's your source for this info? is it public knowledge or at "soft" public knowledge? EDIT: and if it's private info, just looking for a vague description of how you know this.

why would this cause these companies to go bankrupt if it's rogue employees? or i'd even say why they go bankrupt even if they turn out to complicit themselves?... G7 regulated financial institutions might have huge problem but does china/off-shore/etc. care about this? esp. if it's rogue employees.

didn't understand your "stream of thought" on the payment processor having $7.5MM at a nevada bank. i think i read/remember that correct.

interesting subject....... thx for posting........

So even in China these companies are regulated, and the PRC and payment processors serving online gaming companies don't mix. There are numerous reports of unauthorized card use on this forum and others over the last few months - more instances this year than I've ever heard about. Yes, I'm speculating, but if dozens of people are speaking out on web forums, imagine how big the problem really is.

What makes the situation as bad as it is is that so many different gambling operations all over the world use these two related processors. It's not like a few years ago where if one processor went bad, it would only affect one sportsbook for a short time frame.

The Zip Payments reference was regarding the downfall of a major payment processor, the Jazzette family of books' / casinos' primary, handling payment processing for sports.com, sportsbook.com, etc. You can research the case, but it turned out that Zip Payments, based in the Vegas area, had $7.5M on deposit at Nevada State Bank. I think it's fair to presume that a large chunk of that money belonged to sportsbook.com and its players. Just to close out this old story, sportsbook.com eventually made players whole, but many were waiting several weeks for checks to arrive.

I don't know what percentage of Capinfo's business is offshore gambling, but it doesn't have to be much to be catastrophic. They also indirectly serve the Apple App Store and software companies for in-game purchases and things like that. The news alone, Bill O'Reilly style, would be enough to make them disappear.

op,

I don't follow your logic that because this or any company had a major data breach it means they'll go "tits up." Major data breaches are happening all the time with companies of all sizes and usually very little happens to the company long term. As these data breaches become more common, which they will, people will be less and less likely to freak out about it.

rivercity,

If you're interested in the mechanics of credit card fraud, this blog has tons of posts on data breaches, ATM skimmers, stolen credit card # markets, etc: http://krebsonsecurity.com/

Certainly the news of it shakes up publicly traded companies. Look at Target. Yes, people get over it, but the news has a significant impact both in the short term and quarterly / annual profits. A penny stock like Capinfo would never recover.

I'm not convinced that this is a "data breach" in the Target sense but premeditated malfeasance. There is a company trading on the NASDAQ in the 200-$300 range with ties to Capinfo and PayEase that may be a good candidate for long out of the money puts. I'm doing some research and will report back.

I'm shorting NetEase, NTES. Buying summer time puts in the low $200s. Very much rely on and are cozy with PayEase and Capinfo. I'm trying to uncover data on how much is processed through those 2 and the overall breakdown on how folks around the world pay for games and things in game.

NTES in the tank. $278 to $264.50 in a blink.

NTES new 52 week lows