By Tom Nightingale
Today’s gamer wants to make a payment wherever they want, whenever they want, and however they want, and keeping pace with that demand – as well as pre-empting the emerging trends and where consumer desire may go next – is a key pathway on the road to success.
How can gaming operators meet that demand and utilize the tools that are out there to ensure they rise to this challenge?
We rounded up some of the industry’s biggest names in the payment sector to ask them.
These interviews with Greg Kirstein, VP of Business Development, North America iGaming at Paysafe; Alex Morgan-Moodie, Senior Director of Vertical Growth at Worldpay from FIS; Kristi Lewis, Director of Marketing at Paramount Commerce; Neil Erlick, Chief Corporate Development Officer and Nuvei; and Tamara Tenenbaum, SVP of Business Development and Managing Director of Canada at Sightline Payments have been edited for length and clarity.
Given gaming’s increased convergence towards an omni-channel approach, what are the key trends in payments for the industry right now?
Kirstein: Consumers’ online payment preferences are increasingly diverse, with four in 10 trying a new payment online method during the pandemic, according to our research. Credit cards remain king online in Canada followed by debit cards, but APMs, digital wallet, and eCash have been gaining traction. To avoid multiple separate integrations, payment providers have developed APIs that allow operators to plug into a comprehensive range of payment methods through a single, streamlined integration. Also, enabling consumers to move money seamlessly while visiting brick-and-mortar casinos is an important evolving innovation.
Morgan-Moodie: Customers want increasingly seamless experiences. The sign-up/deposit user journey has traditionally been one of the most fraught to optimize. The challenge of omni-channel is that customers increasingly don’t appreciate the dividing line between online and brick-and-mortar, and they expect to be able to interact seamlessly between the two. We’re seeing the emergence of some fantastic digital wallet solutions that enable precisely that; the challenge is to ensure the technology enables payments in multiple ways and formats, from open banking to cryptocurrency, whilst further reducing friction using biometrics for authentication and identification.
Lewis: Tokenization of sensitive payment information is critical for operators to enable consumers to move seamlessly from one channel to another. Instant payments will also be essential as a consumer’s transactions will need to be confirmed and available across platforms in real time.
What payments-related challenges does Canadian gaming’s new era throw up?
Kirstein: As well as the challenges of offering a comprehensive range of payment methods, another challenge is ensuring players’ payment experience is frictionless for both deposits and payouts. When players cash out, they want to be able to receive payouts in real-time directly into their bank accounts or digital wallet. This can impact a customer’s perception of a particular iGaming brand – our research found that quick payout was the top factor for bettors when selecting a sportsbook, prioritized over odds, sports markets, bonuses, and even brand reputation.
Erlick: Players simply are not prepared to wait hours for a payout request to be settled anymore. So near-instant payment methods that enable guaranteed seamless transactions are going to be increasingly popular with players, and therefore operators. Also, operators have been facing some payments-related challenges when it comes to card acceptance rates issued by the major financial institutions in the opening weeks of the newly-regulated market, so alternative methods are vital.
Morgan-Moodie: Security is a big one. Customers have a greater awareness now of privacy and security online than perhaps at any point previously, and at the same time operators are facing down ever more sophisticated fraud threats. Utilizing biometric authentication can provide assurances but is only part of the solution. We are in the midst of the Big Data revolution and whilst that can cause some scepticism from customers, not all data utilization is data exploitation! Leveraging AI learning to manage fraud means operators can be secure in the knowledge they are doing everything they can to manage threats to their business and their brand, whilst at the same protecting their customers’ privacy and wallets.
Tenenbaum: Canadian banking is very different from American banking, and several operators are finding that out through trial-and-error. Different card networks provide hurdles for operators to overcome, like the prevalence of INTERAC, which doesn’t exist in the U.S., the ability to know your customers without using their SIN as it is not used in the same way as the US SSN, and new banking partners.
Lewis: Low credit card acceptance rates may be tough for some Canadian gaming operators to navigate. Two of the major five banks are not accepting credit card payments, while another only accepts deposits via credit card. For banks that accept credit card, cash advance fees can be an unpleasant surprise for consumers. For operators to be successful in Canada, it’s recommended to offer a bank-account-based payment option to overcome low acceptance rates.
How can operators tailor their payment offerings and digital marketing strategies to give themselves an edge while providing strong ROI?
Tenenbaum: Firstly, operators must have a robust payment stack with a variety of funding and withdrawal methods. Customers expect more than funding via bank transfer, debit, and credit cards – they expect the same funding methods they have in their daily lives like PayPal, peer-to-peer networks, prepaid debit cards like Play+, real-time payments, and even cryptocurrency.
Erlick: Unlocking the value of payments is increasingly important to gaming operators, and they are increasingly moving away from a one-size-fits-all approach to payments in preference of a customized payment solution tailored to their specific needs to unlock their full potential.
Kirstein: It’s essential not to omit any player segment’s preferences. For example, our research revealed that high-stakes or VIP players favour digital wallets over credit and debit cards, while some cash-inclined bettors will likely prefer brands with an eCash solution in the cashier. Therefore, any brand without a digital wallet or eCash will likely struggle to convert these two segments. Also, the affiliate channel has a very strong ROI, given that operators only pay affiliates for converted players. A mature affiliate program drives up to 30 per cent of an iGaming brand’s player acquisitions, according to data from our Income Access business unit. But operators also need to diversify to include channels with lower ROI such as programmatic and direct or targeted media buys with high-traffic websites as well as paid social and PPC.
Morgan-Moodie: After that, build smart UX and leverage tokenization technologies to ensure you can anticipate
the customers’ needs in real time, including the need for payouts when requested, Layer on a sophisticated loyalty scheme that feels authentic to the individual and is fun to participate in, and operators focused in these areas should see strong ROI.
Lewis: Finally, operators who put a strong emphasis on not just payment solutions but targeted communication strategies will have a leg up on the competition. Operators who meet all the regulatory marketing requirements and target communications by region will have a strong advantage in attracting consumers. Being intentional about payments and marketing strategies is crucial in growing your iGaming business and providing strong ROI.