Paysafe’s Greg Kirstein on the value of operators meeting payment demands in Ontario
Earlier this month, Paysafe released the latest edition of its premier igaming research report ‘All the Ways Players Play’, analysing how changes in the payments industry are impacting sportsbooks and bettors.
The report focused on three different markets, including the newly expanded Canadian market of Ontario, and was separated into chapters looking at a wide range of topics, including the different payment methods now in circulation and how player acquisition and retention can be encouraged.
To better understand the context behind the Ontario statistics, Canadian Gaming Business spoke to Greg Kirstein, Paysafe’s VP of Business Development for the North American gaming space, who delivered insight on what observers can expect next in the province and from Paysafe itself.
CGB: Looking at the results specifically in Ontario, what are your key observations and findings?
Kirstein: Our research really emphasizes to Ontario operators the importance of tailoring their cashiers to meet local payment preferences. According to our data, the top payment preference for Ontarian online sports bettors is Interac e-Transfer, the Canadian interbank network solution allowing players to deposit using their Canadian bank account.
Four out of 10 (39%) Ontario players listed Interac as a payment preference, exceeding even credit cards (36%) which traditionally tend to dominate Canadian eCommerce, and debit cards (34%). Approval rates for credit card and debit card igaming transactions continue to rise strongly in Ontario, so we can expect to see cards’ popularity grow in the future, as players increasingly see them as highly reliable payment options.
In terms of alternative payment methods (APMs), digital wallets and eCash remain significant payment options for Ontarians at present. While digital wallets trend lower in Ontarians’ payment preferences than they do in the US, 15% of players prefer using a wallet, and around one in 10 favour eCash.
The acquisition value of payments was also demonstrated by our research. Ontario was the youngest market we surveyed last November. But only around six months after launch, players were still prioritizing frictionless payouts above all other factors except brand reputation when choosing a sportsbook. As the market matures, we can expect quick payouts to become the paramount factor for player acquisition in Ontario – as it already is in the US and UK.
Digital wallets are now the preferred payment method for 28% of global online sports bettors, dropping down to 15% in Ontario. Is there a possibility that this method could eventually surpass credit cards in the province?
It’s almost certain that digital wallet usage will grow strongly in Ontario as the market matures, with adoption likely to mirror the US, where 32% of players prefer wagering with a wallet. In tandem with market maturation – which tends to drive growth in high-stakes VIP players, who favour wallets – we’ll likely see payment providers tailoring digital wallets to better serve the igaming space.
At Paysafe, we’re poised to launch our enhanced Skrill wallet for igaming in Ontario – supporting instant deposits direct from players’ Canadian bank accounts and rapid payouts plus a streamlined UX.
[But] it’s unlikely that digital wallets will significantly surpass credit cards in popularity. Credit cards have traditionally been ‘king’ in Canadian online payments, and rival Interac in the igaming space specifically.
How quickly do you expect Ontario to embrace alternative payment methods such as crypto?
Whether in Ontario or the US market, the tipping point for the growth of cryptocurrency as a payment option will likely be formal regulation by financial and gaming regulators, which has yet to happen.
It will be interesting to see how the space develops over the next few years, especially given younger demographics’ interest in crypto as a financial asset and ultimately as a payment option alongside fiat currency.
Players’ relative inexperience with igaming payments and the youthfulness of the market have been attributed as possible reasons behind low player satisfaction in Ontario – does the market simply have to mature?
It’s important to contextualize the data. Our research revealed that player satisfaction with their payment experience trended slightly lower in Ontario (47%) than the UK (56%) and especially the US (65%). That said, less than a fifth of Ontario players (17%) were openly dissatisfied, lower than states like Iowa (22%), while 36% of Ontarians had no opinion either way.
The fact that satisfaction isn’t higher in Ontario can certainly be attributed to the market’s maturity. For many casual players in the province, the complexity of the igaming payments journey compared to a typical ecommerce purchase – involving both depositing funds into their player account and receiving payouts of winnings – is a new experience.
As players’ familiarity with the transactional mechanics of wagering grows, payment satisfaction will no doubt improve to the levels we’re seeing today in other markets.
Operators and payment providers have important roles to play in educating players on the nuances of igaming payments.
What significant changes and challenges do you forecast in the next report?
The key change will be a greater diversity in players’ payment preferences, with APM usage likely to increasingly rival traditional payment methods.
Ontario operators will almost certainly better segment payment methods to serve different player profiles: payment solutions with higher deposit limits for VIPs and other payment methods for more casual players or those with particular preferences such as eCash for bettors using mostly cash in their everyday lives.
A major challenge will be balancing transactional speed with security. A third (33%) of Ontario players we surveyed expect payouts to be instant or near instant. At the same time, more Ontarians are concerned about transactional security (42%) than the US (34%) or UK (39%), so sportsbooks will need to ensure their customers can wager with confidence as well as speed.
Beyond payments, it will be interesting to see if other Canadian provinces like Quebec and British Columbia follow Ontario’s lead and launch their own private sports-betting markets. Our next igaming payments research could well survey not just one Canadian province, but several.