Payments always make operators rack their brains. This vertical is full of unexpected moments and complications connected with regulations and KYC.
Jake Dovey, CEO and Founder of Rubiks Tech, has provided detailed information about those aspects of the payments sector, which you won’t find in financial news.
How can you describe payments in the gambling industry in 2021? What is their differentiating feature?
2021 continues a number of key trends experienced in 2020, such as widespread online adoption and increasing focus on improving user experience. More alternative payment methods, changing consumer preferences (partly due to COVID-19), and the adoption of even easier ways to pay continue to dictate, which methods are relevant for operators (note: non-registration methods/solutions such as Trustly, TrueLayer, etc.).
One interesting development is that the payment function continues to have an increasing influence on the wider business. Traditionally, the payment space is seen as more of a “back-office function”, whilst current trends show payment functions influencing marketing campaigns, ensuring conversion and being strategically important towards the ongoing growth and success.
What are some of the current payment trends in the online gambling industry?
Increasingly with more choice for consumers, the general trend is that slightly fewer people are depositing, using Visa and Mastercard as a total percentage of an operator’s cashier. This is partly due to the growing popularity of alternative payment methods, which boast new experiences and a higher level of security that is associated with these methods (such as bank transfer and eWallets).
The payment methods, which are growing at the fastest rate, are powered by open banking and cryptocurrency. Open banking is a centralized initiative and cryptocurrency has been a “private” decentralized initiative. Open banking provides a low-cost benefit to merchants and in some cases, an improved user experience. Its increasing popularity has put pressure on existing methods but has mostly been beneficial to consumers, providing even more choice.
However, the overall popularity of eWallets, credit cards, bank transfers, and voucher methods will continue to remain popular and for the most part, have continued on an upward trajectory due to the overall growth of the online gambling space. Payment methods that focus on improving customers’ safety, a great user experience and enabling individuals to pay in countries where Visa and Mastercard are not typically issued will be the ultimate winners in the space.
What are the main obstacles that operators face in this sector? Are they more connected with regulatory aspects or with banking systems’ shortcomings?