The iGaming industry has seen a lot of change this year as a record number of gaming contents were delayed for 2022, marking 2021 as one of the most delay-heavy years in iGaming’s history. In the iGaming payments space, with Covid-19 accelerating the demise of cash, alternative payments have gained momentum, and the online gaming industry has been more open to innovation, for example, by adopting crypto-currency payments.
It is well-known that the online iGaming industry, often perceived as high risk, suffers from a certain amount of bad press regarding AML and other financial insecurity so the importance of properly structured payment solutions is paramount.
In this in-depth overview, we are providing a guide on the various iGaming payment solutions available in 2022.
Payment Priorities for the iGaming Industry #
High level of security — As already mentioned, the need for a foolproof payment processing system is paramount for the success of any iGaming business in processing transactions. A high level of security is necessary to establish trust within the market.
Faster payments — As the online gambling industry continues to evolve, the need for faster payments has become ever more apparent. iGaming operators know that in today’s culture of instant gratification, players expect to be able to access their winnings instantly and those brands that don’t facilitate this face a significant disadvantage on a product level. Overall, by simplifying the payment process for its users, iGaming companies can build a better long-term relationship with their audience. Evidently, this is an integral part to boosting short- and long-term customer success. You can read more on this subject in our blog: One-click payment in the Modern E-commerce Ecosystem.
Automatic reconciliation – It is important to partner with a payment platform that combines flexibility and technology when creating a completely automated reconciliation system. This system should be designed to help iGaming companies track their payments for every transaction completed, saving them the headache of having to manually reconcile everything on a spreadsheet. Not only does this increase the company’s day-to-day efficiency but it also gives them better insight into their financial data and allows them to stay compliant.
Cross-device and cross-browser compatibility – It is essential for iGaming operators to partner with a payment provider whose payment pages are fully compatible across all kinds of devices (desktop, mobile and tablet) and browsers. Only then they can ensure that their business is ready to exploit a strong and growing trend of mobile iGaming services and serve all customers that still access the game through desktop in different browsers.
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Payment Challenges in iGaming #
Chargebacks – It is important to note that developments in an industry must be directed towards dealing with the potential challenges at hand. In this section, we look at some of the glaring issues that need to be resolved for making considerable progress in improving iGaming payments.
Fraud – Online gaming comes with the risks of the presence of cybercriminals. ThreatMetrix’s Gaming and Gambling Cyber Crime Report stated that one out of every twenty new gambling accounts present online is fraudulent. It is very important to be equipped with the right fraud prevention tools when setting up your gaming merchant account.
Standard of Crypto-currency – It is not possible for every online casino or gaming platform to adopt crypto-currency and as discussed previously, it is definitely becoming a very popular choice among gamers. Also, crypto transactions follow a completely anonymous path which makes it difficult to track the payment in any case. Adapting to such disruptive changes will be quite a task.
Licensing – The legal restrictions in various jurisdictions and the increasing number of compliance requirements can be a major issue in iGaming industry payment processing. Given the risky nature of the business itself with the high-volume turnover, age restrictions and a myriad of laws, it takes good effort to adhere to every compliance requirement. It is an area where no compromises can be made. Combining that with general issues like player acquisition and retention of customers legally creates a substantive amount of backend work for the iGaming industry platforms.
A Global Arena – The most important challenge to be overcome is to integrate a sufficiently swift system of currency conversion given the global nature of iGaming industry platforms. It is essential to ensure that money could be directly sent to various beneficiaries and in the appropriate currencies. Providing a seamless payment experience along with an interesting and seamless gaming experience is what will ensure steady growth for your iGaming company.
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Factors to Consider When Choosing a Payment Solution in iGaming #
The cost of payments can be too high – Another important factor when choosing iGaming payment solutions is the cost of payments. In a world where banking fees are on the increase, the use of a payment provider becomes all the more important to avoid higher costs. Banks are constantly and continuously upping their charges and fees and this is creating an even more difficult situation for iGaming operators.
Brands want to build customer loyalty – A crucial factor in any business partnership is loyalty and trust so it goes without saying that a good business relationship is imperative for a proper operation. A reliable payments partner is of course essential in this scenario for the processing of online payments.
Instant payments – Another major factor is that customers more often than not expect payments to be instant. Any hold-ups in the system may cause customer dissatisfaction which could lead to churn and thus a decrease in revenue.
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Future of iGaming Payment Solution #
The rise of mobile gaming payments – The demand for mobile games keeps increasing, with monetization challenges becoming more complex in the gaming industry.
Consistent adoption of crypto-currency – Crypto-currency is an increasingly popular payment option with online casinos. Players can instantly deposit and withdraw funds, benefit from low fees, and enjoy increased privacy.
Adopting technology – AI, tokenization, and more – iGaming vendors and operators are incorporating the use of artificial intelligence to better understand their users, making AI one of the most promising trends in the industry. It sufficiently aids even in the processes of Fraud Analysis, Data Protection and cross-platform payment transactions. Along with this, tokenization is another method that is being readily used to secure a user’s data and eliminate the need to re-enter information. Although, still in its nascent stage, there is an advent of wearable payment technologies as well. Here, gadgets like smartwatches can be used for contactless payments on iGaming industry platforms.
Payment Services and Solutions for the iGaming Industry #
Credit Card Processing – Credit cards are still an important payment method in most of the countries Asia and Europe. FinXP processes payments from all major credit card brands such as VISA and Mastercard via its PCI DSS compliant payment gateway.
Alternative Payment Methods – Alternative payment methods (APMs) refer to payment methods other than card processing. Offering APMs is important as many of these payment options are very popular in certain countries, even more important than paying by card.
Closed-Loop Payment Solutions – The Closed-Loop payment solution provides iGaming businesses and their customers with a common payments ecosystem. iGaming merchant platforms and marketplaces can benefit from a unique B2B2C solution that facilitates the flow of funds from a business to its clients and users.
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Expanding Your iGaming Business Across Various Jurisdictions #
The ultimate future of the iGaming industry lies in the process of expanding your business across various countries. Payment processing and expansion will thereby go hand-in-hand, facilitating each other’s growth. It is therefore important to primarily understand cross-border payments and then learn about creating growth with your gaming website.
Cross-border payments are essentially transactions where the payee and recipient are in different countries. To successfully execute these, iGaming industry’s platforms and concerned merchants should work with Payment Service Providers (PSPs) that provide a secure and global payment gateway with the inclusion of certain assisting characteristics like multiple payment methods.
It is also essential to review the kind of popular payment options in a target territory and augment your payment platform according to the same. An example is the widespread use of eWallets in China documented in a Mckinsey report. They generated close to $43 billion in 2019 alone, far exceeding the global measure of $22 billion.
These kinds of local preferences must not be neglected, especially as an iGaming platform, given the ease of transactions expected by the end-user.
What’s next? #
By now we fully understand the need for iGaming operation companies to update their payment technology. Each of the aspects mentioned in this blog is crucial for players’ payment experience, and thus to the large extent the commercial success of an iGaming operator.
The underlying idea of our two-part blog is clear: players in the industry must carefully choose the payment provider that can provide both fraud prevention and efficient payment processing features. Only then sustained growth and player retention can be ensured.
The evolution of the iGaming industry now largely depends on regulators and what future models will be chosen. The role of iGaming payment solution providers has become increasingly important in the online gaming operators’ ability to provide a great customer experience.
Therefore, in large part, the growth of your iGaming business will be determined by who you choose as your payments business partner.
