Payments technology is increasingly becoming an important part of the iGaming industry. In a newly regulated iGaming market such as Ontario, payment technology not only helps operators differentiate their brand from competitors, but it supports their customer acquisition and loyalty strategies. To further understand the role of payments technology in the iGaming industry, we spoke with Dave Roe, the Chief Operating Officer at Paramount Commerce.
1) What role does payments technology play in the iGaming industry?
First of all, the payment itself exchanges value for value and the consumer expects (and rightly so) immediate access to their money whether it’s a deposit or a withdrawal. This poses a challenge in terms of real money movement and the risk associated with it.
Secondly, the online gaming industry is credit card-challenged. Not only do the card issuers block gaming-coded transactions, but gaming regulators themselves in certain jurisdictions have prohibited their use altogether. This therefore requires operators to accept a wide range of payment methods that you don’t see in other industries, which needs to be managed.
Thirdly, online gaming operators spend significant sums on player acquisition and retention. To state the obvious, if a newly acquired player cannot deposit, the operator can’t get a return on their investment. It’s therefore vital that payment conversion is high.
According to a survey conducted by PayNearMe and Sapio Research with more than 2,000 participants in 19 US states, 49% of players mentioned that a positive betting experience was the most important aspect of betting online. An important part of that positive and gratifying betting experience relies on the availability of diverse payment solutions and features.
Offering consumers payment solutions that have high conversion without increasing risk or operational overhead is critical to ensure better brand loyalty, customer acquisition, and retention.
2) What benefits do payment technology offer in a new iGaming market like Ontario?
Payments technology plays a major role in helping gaming operators establish their brand in new regions such as Canada.
Operators continue to experience challenges with card acceptance so offering payment solutions that Canadians are familiar with is critical. Integrating payment solutions with trusted brands such as INTERACⓇ translates into brand growth.
Through operator feedback and user testing, we’ve found that INTERAC is widely becoming the number payment method on the cashier.
Since Ontario introduced regulation, the number of operators in the market has increased significantly. To compete in this market and ensure return on investments, it’s especially important to support the right suite of payments on the cashier.
3) In Ontario, bank-account-based payment solutions have become popular amongst iGaming players. Can you tell us why?
As previously mentioned, credit card acceptance in the gaming industry within Canada is extremely low. Two of the major five banks are not accepting credit card payments, while another is only accepting deposits but not withdrawals via credit card. Apart from low acceptance rates, cash advance fees are a common issue amongst credit card users. This creates a terrible experience for the player.
For this reason, bank-account-based payments have been able to thrive in the gaming industry. We’ve seen some of the most innovative advancements in payment technology come out of gaming–things like instant deposits and withdrawals, in-game betting, and Xpress deposits.
Offering well-known solutions such as INTERAC or Instant Bank Transfer that have high acceptance rates, and are equipped with innovative features that greatly benefit iGaming players and merchants.
4) And lastly, what are some payment innovations that will be a game changer in the gaming industry?
Embedded Finance: It is one of the biggest and most exciting trends impacting payments right now, not just in Canada, but across the globe. In a nutshell, this allows the operator to have a payment journey that’s much closer to the overall customer experience—in their native app in this case. A good example of this is what we call our in-game feature available with Instant Bank Transfer. The consumer can make a deposit from a merchant’s app without ever leaving the game.
Crypto: The second thing that is probably the more well-known innovation in payments is cryptocurrency. It’s become very popular as an investment, but it’s also starting to gain more traction as a form of payment and ultimately funding a player’s gaming account. There are already many foreign gaming operators that allow players to use cryptocurrency for online gaming.
The Paramount Commerce team is headed to Malta from the 14th to the 18th of November for the 2022 SiGMA Europe expo. So if you want to learn more about our innovative payment solutions or expanding into Canada, speak to our expert team members today: https://paramountcommerce.com/contact