Aleksandrs Uhovs, Business Development Director at Decta, has a unique 13-years’ experience in the payment industry. Having worked in different continents and parts of the world, he has held management and leadership roles in large, multinational companies. Today, he shares his insights on payment trends in the iGaming industry – what`s happening now and what to expect in payments in the very near future.
Generally speaking, the iGaming industry is one of the biggest industries, comprising different online gambling markets like poker, casinos and sports betting. In a few decades, iGaming has become a highly competitive, stand-alone market with trends coming and going as fast as Usain Bolt – the world’s fastest man. It is no longer a niche for a single target, but a culture that is surrounded by the buzz that makes gamers and fans come back for more.
The most important thing to highlight here is that the market is growing fast. This year, the iGaming market generated $ 75,5 billion or 69% of all global gaming revenues and is likely to reach $ 100 billion by the end of 2020.
Current payment trends
1. Receive money instantly
Reputation in the iGaming is no easy ride because it is built on many factors, one of which being the brand image and customer services.
Deposits and withdrawals are absolutely critical in iGaming. Players demand seamless user experience and agile payment solutions. If gaming businesses delay withdrawing winnings for too long, there is a risk that gamers will move to other available platforms. The delays for some days or even a week for payouts were a standard several years ago, but now it could be the main reason for players to leave the platform for more attractive services elsewhere. Basically, free access to money with an instant pay-out possibility is a perfect match to keep players satisfied and loyal in the long term.
Other than providing instant payouts, payment platforms also must provide different payment and withdrawal options – alternative methods, wallets can only encourage players to spend more, receive money instantly and deposit again.
2. Omni-channel payments
Today, omni-channel has become a buzzword within the iGaming community. Gamers are more attracted to switch from one device to another, either it is smartphone, wearable or desktop PC. For example, many gamers start their sessions on the PC and continue on mobile app. Gamers are expecting the same level of functionalities and user experience on each platform.
Most iGaming companies rethink their strategy how to efficiently support all existing and future channels. Such Omni-channel strategy also helps the business to streamline the online presence and tie different channels into a more competitive offering. Meanwhile, the payments functionality should also fully support a seamless transition of user experience through all channels.
The other benefit of the Omni-channel strategy is a better understanding of gamer behaviour and preferences. Supporting all types of payments is quite expensive not only in the initial stage but also from the daily operational view. The right analysis and interpretation of information (e.g. big data) connected to omni-channels can increase revenue without breaking their marketing budgets.
3. Multicultural preferences
With iGaming facilities spread across diverse geographies around the world, it is important to map out opportunities and identify what is the best fit for every region. The market is very diverse, and the payment methods or currencies preferred in one country may not be accepted elsewhere.
Sometimes, it is even more feasible to establish partnerships with local providers to find answers and discover valuable insights in the area where the iGaming business is planning to operate in.
The regional expansion is not only about payments, but also legal requirements. Each country has its own regulations and policies for the iGaming industry. About 10 years ago, almost no country had a regulatory framework managing iGaming. From then until now it has changed a lot and the iGaming market is almost the same size as land based gaming and gambling.
As of today, there is no international legislation for online gaming and each country has defined the relevant regulatory principles that may change on a regular basis. Another problem is betting and gaming licensing that is a must for iGaming businesses planning to operate at any location. As a result, the implication of the findings is that the decision on regional expansion in iGaming is entirely based on legal practices in the region.
4. Risk minimization with tokenization technologies
Tokenization has created a small technological revolution with a solution that can help secure payment processes and minimize risks associated with e-commerce and mobile transactions. Especially now, when payment security is the primary concern for many businesses, including the iGaming and financial markets.
Tokenization technologies not only reduce the chances of a security breach, but also improve iGaming experiences. Tokenized payments ensure a high security level when depositing and withdrawing funds via smartphones or other similar channels.
Additionally, one-click payments, which has become a new standard in e-commerce (thanks to Amazon), are becoming more and more secure with tokenization technology, even in case of data breach.
The main benefit for tokenization is that the card number is turned into a token which is stored on the device or merchant site. As a result, iGaming businesses are no longer required to comply with Payment Card Industry Data Security Standard (PCI DSS), because they don’t store sensitive customer data. Adding all of this together leads us to the conclusion that tokenization will likely become more popular in the future as more businesses are looking to minimize fraud and creating cost savings.
5. Artificial Intellect in iGaming - to win and secure?
The concept of artificial intelligence is simple. It is a tool that allows machines to reach the level of intelligence only given to humans. Artificial Intelligence (AI) has already been adopted in iGaming, improving both fairness and competitiveness in the gaming world.
With today's iGaming industry interacting in real-time, you need technology that keeps up with its demands. Gamers, especially Millennials, are increasingly looking for a personalized approach that allows them to select their preferred platform and payment method.
AI software is a game-changing technology that is able to track the behaviour of gamers and bring extra earnings for operators. That further implicates that AI bridges the gap between the data volumes and the ability to interpret data in a meaningful way.
The iGaming trends reveal that cross-selling strategies have never been more important. With AI, iGaming businesses can monitor how gamers interact in different environments and react accordingly to best suit their needs. Having a positive influence on both the gamers and operators, this unique trigger is an excellent tool for gamer acquisition, retention and management.
6. Payment bonuses and promotions
This is not something new or at the top of the hype. The bonus offerings focusing on customer attraction and retention have been in iGaming for already 10 years. There is nothing new about this approach, but it is still perfectly working. Bonuses like free spins or free bets, doubling depositing amount and other promotions are one of the oldest trends in iGaming and are used to encourage new customers to start depositing, support existing customers to continue playing and spending or re-activate customers, who have stopped playing.
Bonuses are not only a customer attraction tool, it is also a payment strategy that is evolving all the time and will continue to do so, particularly in hands of iGaming.
Future payment trends
1. Cryptocurrency and its role in iGaming
Blockchain cryptocurrencies, including Bitcoin, Ethereum and other digital currencies, will amplify in the near future. The statistics show that Bitcoin has increased in value of 750% in the past year, surpassing four times the price of an ounce of gold (and still is increasing every day).
What is behind these technologies? Without much waiting time, this new payment method can serve anyone everywhere in the world. In iGaming, the use of Bitcoins is rapidly growing in popularity, as it aims to improve the efficiency and speed of transactional processes. The Satoshi 300k Rewards Program is an excellent example how to lure people into using Bitcoin in iGaming. This program targets new affiliates who are looking to earn money while finding the right partner. After the registration on the program, 300K Satoshi are deposited directly to the bitcoin wallet.
The origin of money is still ambiguous. Every digital currency has its own structure, governance and technology. However, it is very important to increase the credibility of cryptocurrencies to an acceptable level so both the general public and gamers can be confident in cryptocurrency payments. In order to do so, support from banks and financial institutions is needed. The step towards establishing this trust can be payment protection with a new anti-money laundering (AML) programme that establishes identity verification principles as well as transaction monitoring policies and procedures.
2. Wearable payments: moving to mainstream?
Wearables are clearly the next big thing in payment technology. According to ABI Research (2017), shipments of wearable technologies are expected to reach 500 million by 2021. Apple pay, Samsung pay or any other “Something pay” will work not only on mobile, but also on different wearables.
Wearables might open the door to new opportunities that beat the competition. Convenience, ease of use and security are a few very convincing arguments to promote the wearable paradigm in the iGaming industry. The wearable channel is very close to customers, even closer than mobile phones. This is a new way how iGaming businesses can expand its reach and channels. However, the real challenge for wearables is how to make this platform more attractive and accessible for gamers who prefer standard or traditional channels.
While many people still associate wearable devices with accessories that lack native capabilities, technology companies should be ready to extend native capabilities of wearable devices and make them more appealing to the eye of early adopters and opinion leaders.
3. Blockchain technology for iGaming – smart contracts
It is about time to introduce reforms in the gaming world. One way to make iGaming more transparent is to spread blockchain technology. Gaming platforms can be set up on the blockchain, while being controlled by smart contracts.
Security is a top priority for the blockchain system. As a matter of fact, online gambling should be one of the first markets to introduce smart contracts. For casinos on blockchain platforms smart contracts are good news, as their operations will become more transparent, secure and cost-effective.
This kind of strategy is also brought to the iGaming industry to reduce fraud and guarantee fair play at all times. Ethereum blockchain has done an impressive job and made smart contracts a reality. Blockchain technology allows casinos to lower their expenses, avoiding large scale investments in their centralized infrastructure.
In the case of smart contract, a clear advantage is automatically settled payouts. This means that very soon gamers will have real fun with minimal charges and immediate payouts after the game. With that said, there are a bunch of start-ups like Virtue Poker, BitPoker or AceBusters that have already started to work in this direction.
• Global Games Market Report, Newzoo, 2017
• The Guardian, 2017
• ABI Research, 2017