The psychology of payment choice in iGaming

Why players pick one payment method over another, and what it means for iGaming.

When it comes to iGaming, how players choose to pay is rarely just a rational or practical decision, it’s an emotional and psychological one, too.

Players are influenced by a complex mix of convenience, speed, trust and habit. This is overlaid with cultural preferences when deciding how to deposit or withdraw.

Understanding these underlying motivations isn’t just useful for operators, it’s essential for keeping players engaged and increasing conversion.

We examine why players pick certain payments methods, why they abandon and how iGaming operators can use these insights for competitive advantage.

External drivers behind payment choice

Payment habits have developed over time and are formed by various cultural, political, economic and technological factors.

As cash usage has decreased, digital payment volumes have increased. Covid-induced payment habits have also continued beyond the pandemic restrictions that caused them.

Payment choice is also influenced by economic cycles. As prices rise and purchasing power declines during inflationary cycles, customers may switch to deferred payment methods. Credit cards and buy-now-pay-later (BNPL) options become more popular, especially as lower interest rates mean it’s cheaper to borrow.

Technologically, the rise of fintech, mobile and wearables as well as the trend for integrating payment processes into non-financial processes i.e. ‘embedded finance’ is making digital payment quicker, more convenient and accessible.

Innovations around decentralized finance (DeFi) (e.g. blockchain, cryptocurrencies and smart contracts) and payment security (e.g. fingerprint and facial recognition) are also influencing how people pay.

Internal drivers behind payment choice

Internal factors, particular to the consumer, also guide payment choice. These include age, income and gender, plus subconscious, psychological factors as paying is an emotional rather than a purely rational act.

The psychology of payment choice includes ideas around budgeting and mental accounting. For example, if the payment method helps manage day-to-day finance to keep within a budget or smooth out spending peaks and troughs.

There are also elements about the timing of the payment. For example, enabling the payer to spend money they’d already earned or knew was coming, defer payment or provide a good record of purchase.

Then there are social influences. The seller may prefer a particular payment method. The buyer may wish to show they have the necessary funds to pay straight away, or want to look trustworthy or more prestigious.

Paying in a particular way may feel good, familiar or convenient. Payers may feel empowered to buy what they want, when they want, or rewarded with discounts, loyalty points or other benefits.

Top checkout UX tips to boost conversion

So much for the psychology of payment generally. What are the nuances of payment psychology for the iGaming sector?

iGaming is a discretionary activity, something fun. It’s not paying the gas bill or replacing a broken refrigerator. Customers want to play, not pay, so feel-good factors like convenience, familiarity and empowerment come to the fore.

Players may abandon a payment due to slow payment processing or a complicated checkout process. Their top payment method may not be available. Or they may be concerned about security, extra cost, or declines.

Some tips for iGaming operators to keep players engaged and increase conversion include:

• Simplify checkout flow

Hone the checkout UX to strip out any unnecessary distractions, on-screen clutter and data inputs needed to complete a process.

• Offer the right types of payment methods

Meet players where and how they want to pay by offering a range of international card brands, local schemes, bank-funded transfers and alternative payment methods.

• Price in local currency

You localize the language on your websites, so why not the currency? Letting players pay in their own currency removes payment friction and is a real conversion optimizer.

• Build trust

While your ambitions may be global, players prefer local payment methods they know and trust. Showing the logos of well-known payment methods you accept helps convey trust.

• Be clear about costs

The most common reason for abandonment during checkout is extra costs being too high (e.g. taxes, fees). Consumers like transparency, so manage their expectations.

How local payment options shape the iGaming experience

Yes, cards are convenient. With advancements in technology around mobile contactless payment and embedded payment options, they’re becoming more so. But – and it’s a big but – not everyone can pay by card, or necessarily always wants to.

Even card brands that have spent decades building their acceptance networks only represent around 32% of global e-commerce transaction values. This is predicted to fall to 26% by 2026, according to card acquirer Worldpay.

So, local payment methods, such as bank transfers, digital wallets and prepaid vouchers, are no longer a nice-to-have. They’re becoming critical for growth and business resilience.

If Visa / Mastercard were to change policies, increase fees or threaten to suspend payment processing, could your business withstand the disruption?

Boost conversion as well as reduce concentration risk by offering more local payment methods.

Inpay offers integration to a range of local and iGaming-specific payment methods. As we’ve done the integration at our end, the implementation risk to operators is negligible.