As the iGaming industry continues to expand into new geographic territories, the need for operators and service providers to be fully localised to the markets they serve becomes a vital ingredient for success and relevance. Specifically, payments within online gaming will face two key challenges over the next three years: aligning regulations across borders and the local utilisation of payments.
In today’s iGaming market, payment service providers (PSP), just like the operators they serve, need to be fully aware of what is happening around the world but specifically at the local market level, especially where there are evolving regulatory issues. They have to stay abreast of the status of local iGaming regulations and make sure they are compliant and communicate a clear, trustworthy and secure payments proposition – if they don’t, they will simply miss the potential of that market.
Within these markets, payment service providers need to look at how they manage the transaction process themselves. Getting closer to each individual customer is key to this to indentify from where they are transacting and what card or payment method they are using – from there, intelligence systems can be used to route the customer via the most effective avenue to increase the chances of a successful deposit. Intelligence routing such as this is a process that needs to be monitored closely, meaning that the online gaming operator and the PSP must work very much hand in hand.
Indeed, there are many factors that pose challenges to the payments sector of the online gaming industry and these will evolve in-line with the industry’s own growth as it expands into new market territories and onto new platforms, as we’re seeing with mobile/tablet and social gaming. However, for the foreseeable future to 2015, there are two distinct challenges that the industry must address if it is to manage its international expansion effectively: the aligning of regulations across borders and the local utilisation of payments.
Ongoing regulatory changes in the EU, US, LATAM and Asia Pacific will increase the operational complexity of doing business, which will inevitably increase operational costs. Companies must find the right balance between absorbing these costs and passing them onto the consumer, and payment providers can play an integral role in helping to find the right solution. Those providers who can deliver a platform that provides fraud controls and risk management across different territories while streamlining the payment process will become strategic partners to online gaming operators.
As mentioned earlier, getting closer to the customer in the markets you serve into is vital in maintaining an effective payments process that embraces all of the necessary components of security, verification and accessibility without detracting from the usability of the solution. The fragmented regulatory landscape in iGaming globally makes this a complex task, with operators having to adapt accordingly to each different market they enter to remain compliant with regulation, whilst also giving the market demographic payment solutions that are relevant to their culture and the technology they have access to. This brings us to the concept of localising what you do and what you offer to be relevant to each market you serve. This matters just as much for payment providers as it does for operators.
Addressing local traditions and cultural factors is key to engaging and exciting consumers and producing gaming experiences that people will spend their time and money on. Online gaming companies will need to know who their consumers are, understand their changing needs and behaviours, and use payment methods that support the local perspective equally well. As a result, there will be greater pressure on payment providers to meet increasingly high standards but it does also present significant opportunities to expand their product base and offerings.
Localisation of payment services is imperative across regions. For example, online gaming spend is expected to grow at a much faster rate in Asia Pacific than in the EU, US, or LATAM in the next five years; however, such growth is contingent on companies offering payment methods that successfully address the region’s general reluctance to complete online transactions due to security fears, account restrictions or an inaccessibility to credit cards.
With this comes the need to simplify and standardise the payment process across regions, while offering consumers greater speed and convenience. Online gaming operators must provide a user experience that makes consumers feel confident and secure. This stems from how operators present and market their sites, the software behind it and the way in which payments are presented and processed. Payments are an extension of an online gaming company’s brand and can be a valuable tool for building awareness and loyalty. Gaming companies that recognise that truth now will likely be in a much stronger market position come 2015.
Ultimately, localisation breeds relevance, and in such a fast changing marketplace that is developing during times of real technological advance, the ability to accurately target players in each market you serve with the right products and services will become an integral component of any successful business strategy.
Commercial Director, EntroPay
Andrea is responsible for managing the sales team and maintaining and growing revenues from EntroPay. This includes increasing market share within the igaming industry and looking to grow in new industries and geographies. Prior to joining EntroPay, Andrea was commercial director at Ukash.
EntroPay works with most of the top 50 iGaming operators to optimise their payment processes and enhance the overall player experience. They help companies implement best practices that have been shown to increase deposits while boosting operational efficiency. Their payment solutions increase approval rates and recapture lost customers, while strengthening customer loyalty by offering players instant payouts and more convenient payment and withdrawal options.