Payments in the gaming industry have rapidly transformed in recent years. Relentless tech innovations, changes in the regulatory environment, and the demand by customers for more open, secure payment options contribute to these transformations.
Security is one of the critical elements stakeholders in the gaming industry when adopting a new payment solution. There is always a need for secure payment systems to protect players from financial insecurities, as hackers always look for ways to steal their money.
From the adoption of cryptocurrencies, and wearable payment technology, to using Artificial Intelligence to process payments, the iGaming sector has undergone immense changes
Refers to a form of online betting where gamblers wager on the outcome of a game or event.
The global online gaming sector generated around $21.1 billionin 2021, representing a 21.9% growth from the previous year. There are over one billion online gamers worldwide, with South Korea, China, and Japan recording the largest share.
In the U.S., online gaming is expected to hit $4.93 billion in 2022, with over 200 million Americans playing online games.
Payment Challenges in the iGaming Industry
● Security of Payment Solutions: Any payment method offered by online game providers must be able to detect and deter fraud. Many online gaming companies have suffered massive losses through hacking. Customers, too, have had their accounts hacked and emptied all substantial amounts of money. Online casinos are the biggest victims of fraud.
● Instant Payments: Online gamers expect to withdraw their money as fast as possible whenever they win. Any delay leads to customer dissatisfaction and a decrease in revenues.
● Easy-to-use User Experience: Providing an easy-to-use payment interface is challenging for online game providers.
● High Payment Costs: The amount of fees charged by an iGaming payment solution is an essential factor for consideration. Global banking charges are increasing, forcing iGaming customers to look for payment less-costly solutions. Game providers face balancing challenges as they seek to maintain their customers and profit simultaneously.
● Unavailability of Payment Solutions in Certain Areas: Finding a payment solution acceptable in every jurisdiction is hard. This makes it difficult for iGaming merchants to serve particular areas. In addition, constantly changing regulations in different jurisdictions make it hard for payment providers to keep up across all markets—the numerous gambling and payment processing restrictions slow down market penetration and expansion.
To address these challenges, the iGaming industry is adopting new payment solutions. The new solutions aim at improving the security, speed, accessibility, and convenience of payment transactions.
New Payment Solutions in iGaming
The need for secure, less complex, and quick online payments has hastened the adoption of digital payments in iGaming. Digital wallets allow gamers to make payments without entering their banking details. The wallet securely stores your banking details, allowing you only to use your email and password whenever you want to deposit or withdraw funds.
Examples of digital wallets include Paypal, Skrill, Neteller, Google Pay, Cash App, Samsung Wallet, Apple Pay, Venmo, and Zelle. No need to worry as for example Caesars Pennsylvania casino is one of the companies that use this technology to make it easier for customers to deposit and withdraw.
The casinos combine digital payments with traditional options like cards and bank transfers to offer variety to their clients. Paypal and Neteller are the most commonly preferred digital wallets by American gamblers.
Use of Cryptocurrency
The global adoption of cryptocurrency is on the rise, and the gaming industry is among those that have adopted crypto payments. One of the benefits of crypto payments is that players can make instant deposits and withdrawals of funds.
Other benefits include detecting fraud, decentralization, transparency, cost-effectiveness, security, and universal recognition. The absence of third parties in crypto transactions attracts online gamblers who prefer to keep their financial details secret.
Bitcoin, Ethereum, Litecoin, and Dogecoin are some of the cryptocurrencies used to make payments in the iGaming segment.
Wearable Payment Technology
Wearables are the next big thing in the payment industry. A wearable is a device you can wear on your body, including a smartwatch and wireless earbuds. The devices enable non-contact payments, monitor heart rates, and provide phone notifications.
The devices are easy-to-use, secure, and convenient. They are a game-changer in iGaming as it seeks to keep up with the industry demands.
Tokenization refers to substituting sensitive data with non-sensitive data known as tokens or unique identification numbers. Tokenization payments are highly-secure, which is critical in the gaming industry. It offers users extra layers of security and convenience.
The requirement for re-entering account details is also eliminated by tokenization and could be a game changer for the iGaming sector, especially in fixing data breaches.
Processing Payments Using Artificial Intelligence
Artificial Intelligence (AI) is rapidly taking over many aspects of our lives, and payment processing is not exceptional. The technology is used in iGaming for customer payment, fraud analysis, instant cross-platform payments, data protection, and privacy.
Game vendors use AI to understand users’ preferences and release products to address their needs. Thanks to AI, providers can release quick, secure, and more convenient new payment solutions. The future of the iGaming industry will rely on AI to remain competitive.
Open banking is another trend gaining traction in the iGaming industry. Here, customers allow third parties to access their bank accounts to initiate payments or collect account information. Online casinos and betting Apps connect to customers’ bank accounts through API for instant fund deposits.
The benefits of using open banking in iGaming include reduced withdrawal processes, a personalized banking experience, and safe and seamless payment processes.
Mobile games are rising, with almost every top casino and betting platform opening an online segment. Game vendors have similarly adopted mobile payments to offer online players convenience.
With the changing industry, the need for new payment solutions that meet the users’ and regulators’ demands has never been so high. The demand for top-notch payment solutions is rising as iGaming stakeholders seek more secure, instant, convenient, and less costly payment solutions.