The gambling industry is among the largest on the Internet. It includes various online gambling markets such as poker, casino and sports betting. In this article, we’ll highlight the current and future trends for payment processing in gambling.
Current payment trends in gambling
For several decades, gaming has developed steadily and has become a very competitive and autonomous market with its own trends.
Instant money withdrawal. The reputation of gambling companies is one of their main intangible assets and is built on many factors. The brand image and qualitative customer service are among the main. Deposits, as well as the withdrawal of winnings, are essential. Gamblers prefer platforms with an unhindered withdrawal of funds, offering flexible payment solutions. If a company delays the withdrawal of winnings for too long, there is a risk that players will switch to another more friendly and modern platform. Unobstructed access to money with the possibility of instant payout is an ideal combination: it helps to maintain the loyalty of customers and continuously attract new ones.
In addition to providing instant payments, payment platforms must also offer various payment and withdrawal options. Alternative payment methods and multiple wallets can serve as an excellent incentive for players to spend more money, receive winnings instantly and make deposits again.
Omnichannel payments. Today, “omnichannel” has become a buzzword in the gaming industry. The ability to switch from one device to another attracts gamblers. Many players start a session on a computer and continue it on a mobile application, expecting the same level of functionality and convenience. Most companies in the gaming industry understand the importance of this factor and build their strategy on providing comfort for users on all existing channels, as well as the future ones. The omnichannel strategy helps optimise the business by providing an analytics tool that can collect and link statistics on various communication channels. It also allows for the creation of engaging, innovative and competitive offers for players.
Another advantage of an omnichannel strategy is a better and more complete understanding of players’ behaviour and preferences. Correct analysis of the information received, having a connection to all channels will not only significantly increase customer loyalty, but also increase profits.
Multicultural preferences. Since the gambling industry has no boundaries and covers various geographical regions around the world, each project needs to understand the geography of its gamblers, as well as their payment preferences. Diverse geography can be a big problem because payment methods or currencies preferred in one country may not be accessible in another. Regional expansion is associated not only with local payment preferences but also with various law requirements. Each country has its rules and policies for regulating gaming business. To date, there is no international legislation for the online gaming industry, and each country has the right to determine the appropriate regulations for its region, as well as change them regularly. Another requirement of the gaming industry is licensing of companies that provide online betting and gaming services and plan to work in different regions.
Mind the geography and payment preferences: payment methods or currencies preferred in one country may not be accessible in another.
All of the above comes down to one thing: the decision on regional expansion for gaming companies should be a thoroughly thought-out solution based on a business plan taking into account financial costs and legal practice in the region.
Mitigation of risks through tokenisation. Tokenisation is a solution that can both secure electronic payments and mitigate the risks associated with transactions on the Internet using data encryption. Now, this technology is more relevant than ever — payment security is a significant concern for many companies, including the online gambling market and financial markets. Tokenised payments provide a high level of security when depositing and withdrawing funds via smartphones or other similar channels. Tokenisation technology also creates added value for players. For example, one-click payments, which have become the new standard in e-commerce, are becoming more secure with the same tokenisation technology — even in the case of data theft from the merchant’s server. The main advantage of tokenisation is that the card number turns into a token, which is stored on the device or the seller’s website. As a result, gambling companies are no longer required to comply with the Payment Card Data Security Standard (PCI DSS) because they do not store client confidential data.
All these advantages only prove that tokenisation will remain popular in the future, as more and more companies are aimed at minimising risks and additional costs.
Artificial intelligence. The concept of artificial intelligence (AI) is simple. This is a tool that allows machines to reach the level of intelligence that belongs to people. AI is already actively used in gambling, working to attract customers, analyse data, and improve competitiveness. The ever-evolving gambling industry needs technologies that can meet its ever-changing requirements. Gamblers expect a personalised approach and the ability to choose a payment method. AI technology helps provide this personalised approach by allowing to track players’ behaviour to meet their ever-changing needs best.
Gaming trends show that a cross-selling strategy is more critical than ever. Therefore, artificial intelligence is an excellent tool for attracting and managing players, and at the same time for additional revenue for operators.
Payment bonuses. Bonus offers focused on attracting and retaining customers have existed in gambling for over ten years. There is nothing new in this approach, but it still works great. Bonuses, such as free spins or free bets, doubling the deposit amount and other promotions, are one of the oldest trends in gaming. They are used to reward new customers, support the existing ones or activate customers who, for whatever reason, have left the platform.
Bonuses are an excellent customer acquisition tool that is continually evolving, but given their simplicity and effectiveness, rewards should remain a long-term development strategy for any gaming platform.
Future payment trends in gambling
Gambling has already made a long way from simple games to full-fledged virtual worlds and has already become part of the modern culture, completely independent of its offline past. No wonder the size of the market is expected to reach $100 billion by the end of 2020. So, what to expect in the future?
The future opens up bright prospects for the development of cryptocurrencies that work on Blockchain technology (including Bitcoin (Ethereum) and others). What is behind these technologies? This new payment method may be suitable for most people in the world. The use of Bitcoins in gaming is growing and will keep on doing this. There are enough reasons for this: the technology is aimed to increase the efficiency and speed of transaction processes, and reduce the cost of payments. The origin and legal regime of cryptocurrencies are still ambiguous — each one has its characteristics and technology. Confidence in cryptocurrencies remains low, and the percentage of all financial transactions is still negligible. For the general public, including players, to actively use Bitcoin as a means of payment, support from banks and financial institutions is needed. A step towards establishing this trust may be the Anti-Money Laundering (AML) program of financial measures to combat money laundering, which determines the principles of personal identification, as well as policies and procedures for monitoring transactions.
Blockchain technology is aimed to increase the efficiency and speed of transaction processes, and reduce the cost of payments.
It is worth noting that sharp jumps in the growth and fall of various cryptocurrencies also do not contribute to popularisation. As an example, some digital distribution platforms refuse to work with Bitcoin, motivating it with large fluctuations in price and service costs.
2. Wearable devices
Another promising payment mechanism for the gambling industry is wearable devices, such as smart bracelets, watches. According to ABI Research, shipments of wearable devices will reach $500 million by 2021. Wearable devices, no doubt, will open new opportunities in gambling. Convenience, ease of use and security are some of the very compelling arguments in favour of this invention. Wearable devices are accessories, which means they are closer to a person than a mobile phone. These electronic devices are an excellent engine to expand the capabilities of companies in the gaming industry.
3. Blockchain technology for gaming — smart contracts
And finally, it’s time to reform the game world. How to make the gaming industry more transparent? It is necessary to mention Blockchain technology, as the most exciting direction with huge potential. Gaming platforms can be built on a distributed digital registry system, where the entire transaction chain is duplicated and stored in an encrypted form, and management is carried out through smart contracts. Security is a top priority for Blockchain, and the online gambling industry should be one of the first to implement smart contracts. For a casino on the Blockchain platform, smart contracts will be able to provide transparency, security and cost-effectiveness. The Ethereum blockchain has done an impressive job and made smart contracts a reality for any business. The smart contract strategy in the gaming industry will help significantly reduce fraud, as well as guarantee the integrity of the game. In turn, Blockchain technology will allow online casinos to reduce their costs, avoiding significant investments in a centralised infrastructure.