How iGaming operators can crack the local payment code

Operators wanting to offer more digital gaming experiences and grow player numbers globally must enable more local pay-ins and payouts. How can a payments partner help?

Payments are hard. No-one or one thing is to blame. It’s just how national payment systems and international correspondent banking have grown up over time. Social, technological and regulatory changes only complicate matters.

However, having the right payments partner at your side will go a long way to simplifying life. They can help iGaming operators enable local pay-ins and payouts on a global scale. Plus help them achieve seamless entry to new markets, power global growth and please players.

Why are payments hard?

Players want to play, not pay. Paying is just a means to an end, not what iGamers are really about. Or why they come to an iGaming site. In that way, iGaming’s not so different from most online businesses.

Customers visit an e-commerce site to shop, not buy. They visit a travel site because they want to go on holiday, not purchase one. Payment is integral to almost every financial transaction, without being the purpose of the transaction.

For something that’s not the purpose, it’s certainly a problem. Players and operators alike want payment to be as quick and convenient as possible, but frequently it’s not.

That’s mostly because payment habits are strongly national. Payment systems are domestic in scope and operate in a single currency. Yet players and operators want to make and receive pay-ins and payouts internationally in multiple currencies. That’s the mismatch.

What’s happening in iGaming right now?

All this payment pain is going on as the iGaming industry faces its own challenges.

Covid-19 has accelerated the shift from in-person casinos to online platforms. Technology has driven a shift from desktop to mobile devices. More players are gaming on their mobile phones and tablets. Augmented reality and virtual reality are also disrupting things.

Then there are the ever-changing regulatory requirements across different jurisdictions. Which licenses are worth pursuing and maintaining? It’s a balance between potential market size, regulatory framework and competition. Operators need to ensure that they’re investing resources wisely and aligning with their long-term business goals.

Why don’t payment work arounds work?

In this context, it seems counterintuitive that the more digital and global an iGaming operator’s ambitions, the more local the payment.

In other words, operators wanting to offer more digital gaming experiences and grow player numbers globally must enable more local pay-ins and pay-outs. Hence, why they utilize two main work arounds:

1. Offer more local payment types

Operators need to localise payments to boost conversion. The downside is that in offering more payment choice to customers on the front end, operators create more payment complexity for themselves on the back end.

Multiple local payment suppliers, integrations, currencies, rates, contracts, settlement dates etc. multiply complexity. Which increases the time, effort, resource and budget needed to manage it.

2. Rely on international correspondent banking

A network of correspondent banking relationships connecting different domestic systems is great in theory. But in practice, payments can be time-consuming to process, expensive and slow.

When speed is a competitive differentiator, pay-ins/pay-outs that take 3-5 days to arrive are clearly unworkable. As are daily cut-off times, unexpected delays, nasty fee surprises, failed or missing payments and exceptions.

What to look for in a payments partner

The right payments partner can go some way to addressing such challenges. They can help increase scale, reach and access. They give operators seamless entry to new markets to power global growth. And provide players with a smooth payment UX to drive simpler, smarter and more customised experiences.

Clearly, there are many factors to consider when evaluating a potential payments partner. Here are three to help stimulate your thinking.

• Coverage
  Understand the geographic reach of potential partners. From which countries can you make pay-ins and pay-outs? Clearly, any partner should be able to cover your existing payment corridors, plus power your expansion into new ones.
• Capabilities
  An Open Banking, cardless pay-in/pay-out option helps increase conversion. Plus, offers the frictionless journeys players now demand. These account-to-account payments are like bank transfers, but better because they’re:
• Quicker – real-time 24/7/365 in many cases
• Slicker – 3 easy steps when integrated at checkout
• Cheaper – no middlemen or card fees
• Credentials
  iGaming operators need a partner who understands them. Plus, has the experience and proven track record of delivering for their sector. Understand what your partner can offer around market insight, industry trends, navigating compliance, implementation best practice etc. to make the collaboration a success.