The online gambling industry is among the largest on the Internet. It includes various online gambling markets such as poker, casino games, and sports betting. Many of them, mainly those representing offline industry players, have experienced tough times in recent years. Does it mean that online gambling businesses flourished even more? Did it give rise to some new trends in online gambling payment processing? You'll find the answers in this article.
Current trends in gambling payments
For several decades, online gambling has developed steadily and become a competitive and autonomous market with its own trends. Whereas most industries were facing hard times during the last years because of the COVID-19 pandemic, gambling transferred to digital format and its market experienced growth. According to Online Gambling Market Report Scope by Grand View Research, the market size value in 2022 made up $63.53 billion, and the revenue forecast for 2030 is $153.6 billion.
Now let's highlight the current state of things in online gambling payment processing and specific payment methods for gambling.
Instant money withdrawal
The reputation of gambling companies is their main intangible asset built on many factors. Brand image and qualitative customer service are among the main ones. The way customers can deposit and withdraw money is also essential. Gamblers prefer platforms with an unhindered withdrawal of funds, offering flexible payment services. If a company delays the withdrawal of winnings for too long, players will likely switch to another, more friendly and modern platform. An ideal combination is an unobstructed access to money with the possibility of instant payout: it helps maintain customers' loyalty and continuously attracts new ones.
In addition to providing instant payments, payment service providers must offer various payment and withdrawal options. Alternative payment methods and multiple wallets can be an excellent incentive for players to pay, receive winnings instantly, and make deposits again.
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 PC and continue it on a mobile application, expecting the same level of functionality and convenience. Most gaming companies understand this and include providing convenience for users on all existing and future channels into their strategy. The omnichannel strategy helps optimise the business by providing an analytics tool to collect and link statistics on various communication channels. It also allows for creating engaging, innovative, and competitive offers for players. The functionality of payments should also fully support the smooth transition of the user from one channel to another.
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Another advantage of an omnichannel strategy is a better and more complete understanding of players' behaviour and preferences. Correct analysis of the information received and having a connection to all channels will not only significantly increase customer loyalty but also increase profit.
Since the gambling industry has no boundaries and covers various geographical regions worldwide, each project must understand its gamblers' geography and popular payment methods. Diverse geography can become an issue because casino 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 the gaming business. There is no international legislation for the online gaming industry, and each country has the right to determine the appropriate regulations for its region and change them regularly. Another requirement of the gaming industry is licensing companies that provide online betting and gaming services and plan to work in different areas.
Mind the geography and payment preferences: payment options 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 considering financial costs and legal practice in the region.
Mitigation of risks through tokenisation
Tokenisation is a solution that can secure online payments and mitigate the risks associated with transactions on the Internet using data encryption. This technology is now more relevant than ever — payment security is a significant concern for many companies, including online gambling and financial markets. Tokenised payments provide high-level 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 payment processing, 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 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 confidential client data.
All these advantages only prove that tokenisation will remain popular in the future as more and more companies aim to minimise risks and additional costs.
Artificial intelligence (AI)
AI allows machines to reach the level of intelligence that belongs to people. This innovative tool is already actively used in gambling, attracting customers, analysing data, and improving 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 us 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 simultaneously for additional revenue for operators.
Bonus offers to attract new customers and retain the existing ones 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. Given their simplicity and effectiveness, rewards should remain a long-term development strategy for any project in the gambling sector. Still, online gambling projects should beware of fraudsters: bonuses often work as bait for bonus hunters.
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Find out the ways to combat bonus abuse and other types of online gambling fraud.
What are the future trends in online gambling payments?
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. So, what to expect in the future? If you plan to start an online gambling business, mind the following trends:
Gaming companies can leverage the power of AI to handle customer inquiries more efficiently and cost-effectively, regardless of origin – in-app, on social media, or other channels. By employing AI-powered chatbots and virtual assistants, companies can also offer personalised recommendations and support to customers, thereby enhancing their overall user experience.
'Buy now, pay later' payment method
The BNPL payment method enables customers to buy products or services and spread out the payments over a period of time instead of paying the full amount upfront. This approach is becoming increasingly important in the gaming industry, where customers spend significant money on in-game purchases and subscriptions. By providing "buy now, pay later" alternatives, gaming companies can appeal to and maintain customers who may not have the financial capacity to make sizable upfront payments.
Cryptocurrency adoption fluctuations
The future opens up bright prospects for developing cryptocurrencies. The use of Bitcoins in gaming is growing and will continue due to the speed of decentralised transactions and reduced costs. Cryptocurrencies' origin and the legal regime are still ambiguous — each has its characteristics and technology. Confidence in cryptocurrencies remains low, and the percentage of all financial transactions remains 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 and 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. For example, some digital distribution platforms refuse to work with Bitcoin, motivating it with large price and service cost fluctuations.
Wearables & rise of mobile gaming
Another promising payment service for the gambling industry is wearable devices, such as smart bracelets and watches. Their convenience, security, and ease of use are compelling reasons that attract more and more users. Wearable devices are accessories, which means they are closer to a person than a mobile phone. And these electronic devices are an excellent engine with which companies in the gaming industry can expand their capabilities. According to Statista, the number of connected wearable devices shows steady growth. It encourages game developers to create more immersive and rewarding products for wearable devices. Undoubtedly, it will open new opportunities for online gambling projects and popularise virtual currencies and in-app purchases.
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 online transaction chain is duplicated and stored in an encrypted form. Management, in its turn, 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 of making smart contracts a reality for any business. The smart contract strategy in the gaming industry will help significantly reduce fraud and guarantee the game's integrity. Blockchain technology will allow online casinos to reduce their costs, avoiding significant investments in a centralised infrastructure.
We at Corefy understand what issues online gambling operators and platforms face while opening gambling merchant accounts, processing payments in several currencies and methods, executing time-consuming reconciliations, and struggling to optimise conversion rates. That is why we've translated all our accumulated experience into a single solution for iGaming businesses. Contact us and find out how to streamline your payments and boost your business.