10 payment pain points of iGaming operators – and how to overcome them

Top tips for alleviating common iGaming payment pains.

There’s never been a more exciting time to be involved in iGaming. The global industry will be worth $184 billion by 2032, an increase of over 85% from the estimated $63.5 billion in 2023.

As they look to grow player numbers globally, operators are aware they need to collect and pay out locally. We investigate ten of the biggest payment pain points that iGaming operators are likely to face, plus suggest some solutions.

1.     Cross-border pay-ins and pay-outs are harder to organize than domestic ones

Why? 

To achieve global coverage, banks rely on a network of correspondent banking relationships, which link their different domestic systems together. Great in theory, but difficult to implement in practice across different countries, currencies, time zones and IT protocols.

So what for iGaming operators? 

Most growth in the iGaming sector is cross-border. Focusing purely on growing player numbers in a home market may mean saying goodbye to long-term, sustainable growth. 

Solution

Alternatives to SWIFT wire transfers for cross-border payments exist to make global payment as quick and simple as local bank transfers. Some payment service providers have developed their own global pay-in/pay-out networks. That’s in addition to the technical and regulatory rails behind the scenes to make global payments happen.

2.     Cross-border payments take too long, yet pay-out speed is a competitive differentiator

Why? 

Cross-border payments can take days, weeks or even months, due to legacy technology platforms and a lack of standardization, among other reasons. 

So what for iGaming operators?

Players want pay-outs to be as quick and easy as pay-ins so they can celebrate and play again. They’re becoming increasingly choosy and shopping around for the best odds, experience and service. So much so, pay-out speed has become a competitive differentiator for operators. 

Solution

Some payment service providers can receive funds in any currency and pay out locally in real-time 24x7x365. That’s in countries with an instant payment infrastructure, or offer near-instant settlement elsewhere.

3.     International pay-outs are expensive, and operators would rather spend budget elsewhere

Why?

For high volume currency pairs, such as US dollar to British pound, fewer intermediary banks are involved in the SWIFT transfer chain. Hence shorter chains, quicker processing times and lower costs. However, for less common currency pairs, the opposite is true.

So what for iGaming operators?

The economics of offering cross-border pay-outs and expanding into new markets can be challenging for iGaming operators, particularly if they have little choice but to pass on some or all of the cost of payments to players.

Solution

Some payment providers can offer consistent fees, known up front with no deductions. That’s irrespective of the transaction amount, originating country or currency.

4.     Trust matters in a regulated sector, yet it’s hard to know who to trust

Why?

Both trust and reputation are built up over time, difficult to acquire and maintain, yet easy to lose. At the same time, with so many international payment providers, it can be difficult to tell them apart.

So what for iGaming operators?

Domestic banks don’t provide the true consultative service that iGaming operators desperately need – because they’re not necessarily set up to do so. They’re not experts on other countries’ banking infrastructure. Or on specific payment corridors and what’s needed to move transactions along.

Solution

Specialization is key. The right payment service provider has iGaming sector expertise and experience. They can offer guidance on the requirements, the questions likely to be asked, the quickest and most cost-effective way to route payments to pre-empt problems.

5.     Reliability is everything, as a payment partner can’t go down at critical times

Why?

Criminals follow the money. When they’re not conducting online heists against banks, they’re attempting to hold up iGaming platforms, e-sports books, online casinos and payment providers. Cybersecurity is a concern. As is capacity at busy times. Both affect reliability.

So what for iGaming operators?

If you’re unable to accept pay-ins or pay-outs at any time, it’ll directly affect conversion. That’s both at the time and in the future if players give up and go elsewhere following a poor experience.

Solution

Your payments partner should have 100% availability across more than one data centre as standard. Plus offer full redundancy, meaning there’s a back-up to every component. They should also be operationally secure and solid, with sufficient defences to cope with cybercriminals and capacity to cope with fluctuating volumes. 

6.     Exceptions and missing payments are a hassle, which translates into a back-office headache 

Why?

Based originally on telex, SWIFT has long been a single message system with no response. This is why there’s historically been limited trackability.

So what for iGaming operators?

Exceptions, returns and rejected payments are a chore, a bore, a pain — whatever you want to call them. And transfers getting stuck or going missing altogether are as bad, if not worse, as iGaming operators must invest additional time, resources and energy into tracking and managing payments.

Solution

Your payments partner should have logic to help prevent exceptions before they occur. For example, enhanced data validation to highlight incompatible or missing details for fewer declines and more right-first-time transactions. 

7.     Multi-currency is fine in theory, yet difficult to implement in practice

Why?

It’s not always possible to know up front how many banks are involved in a SWIFT transfer chain, or which ones. Generally, the more banks involved, the slower and more expensive the transfer. Deductions also depend on who pays the transfer fee: the sender, the recipient or both parties.

So what for iGaming operators?

Multi-currency pricing allows operators to facilitate pay-ins and pay-outs in various foreign currencies, while receiving settlement in their chosen currency or currencies. But not all payment providers can offer the level of service iGaming operators need.

Solution

The right payment service provider should support scores of local currencies, plus FX conversion to make the logistics of multi-currency as easy for you as for your players. If they can determine an optimal FX spread to minimize deductions taken by downstream banks in the payment chain, so much the better.

8.     Reconciliation is complex and thus resource-intensive

Why?

With so many payment corridors, currency pairings and transfer timeframes, international pay-ins and pay-outs can quickly become complex — and reconciliation even more so.

So what for iGaming operators?

Almost every business wants to harness operational efficiencies. That’s particularly around repetitive admin tasks such as payment reconciliation, which is not their core business.

Solution

Your payment provider should help simplify reconciliation on the back end by consolidating funds into a single, easy-to-reconcile format, settled in the currency or currencies of your choice. They should also enable you to view all your payments in one place, which helps with reconciliation but also improves decisioning and speeds up issue resolution.

9.     Payment integration is hard, and iGaming operators don’t always have a huge in-house IT team

Why?

In the days of mainframe computers, companies needed a huge in-house IT team to maintain and modify back-office systems.

So what for iGaming operators?

Gambling operators come in all shapes and sizes. So, it stands to reason that they may not have large development teams and may wish to manage the technical integration in different ways. 

Solution

A low-to-no code base and variety of different connection options from a payment provider make it quick to get started with international payments. Plus, cost-effective to maintain over time, with no need for a sizable internal IT resource.

10.  Multiple payment relationships multiply the time, cost and resource required to manage them

Why?

Operating internationally and across multiple channels, payments can quickly become complex and costly. That’s mostly due to the time and resource needed to administer multiple partner relationships, countries, currencies and so on.

So what for iGaming operators?

iGaming operators want to get on with what they’re good at. And skip the time-consuming, costly, resource-intensive behind-the-scenes stuff. For example, systems upgrades and maintenance; researching regulatory requirements country to country; optimizing uptime and more.

Solution

When the pay-in/pay-out solution comes from one place, iGaming operators can manage payments end-to-end on a single contract. This saves time, resource, budget and more, as there’s no need to conduct RFPs, do due diligence, manage performance for each supplier relationship.