Since the outbreak of the Covid-19 pandemic, gaming operators have seen increasing restrictions on online payments. Kristian Gjerding, CEO and Co-Founder of CellPoint Digital, a global fintech provider, explains in this guest column for Yogonet why they should design their payment network to accept all alternative payment methods (APM) in order to enter global markets, generate revenue and successfully engage players. To this end, the expert introduces and analyzes the concept of payment orchestration platforms.
The pandemic has seen an increase in the number of consumers taking advantage of digital technology. Digital payments were already increasingly popular but as shopping moved exclusively online, options such as cash and contactless payments became unavailable and so people were forced to embrace something new. The same can be applied to the online gambling space. As casinos and gaming halls have been forced to close, players flocked online gaming websites and software to pursue their hobby. Digital adoption was at an all-time high.
Unfortunately for the iGaming and sports betting industry and its players, regulations have placed restrictions on the form of payment players are allowed to use. For example, credit cards were capped so that more addicted players cannot gamble with borrowed money that they cannot repay. These limitations are also not universal, some countries prohibit the use certain means of payment. For gambling operators, navigating these regulations to allow gambling can be a nightmare.
That said, there are still plenty of alternative payment methods (APM) players can use. Thus, in order not to lose any customers, gaming operators must ensure that their payment network is designed to accept any APM. If they cannot, they risk creating friction with customers and losing potential profits, inhibiting any growth/expansion plans the business may have.
Why APMs Can’t Be Ignored
There are several options for APMs around the world, from card-based or cash-based wallets to mobile payments and prepaid cards. In 2019, it was believed that more than half of all global e-commerce payments were made with APMs and in Europe alone, 80% of buyers shared that they would prefer to pay with digital payments instead of the usual debit or credit card payments.
If we also consider the future of payments, we can also see that APMs become even more important. Through Asia-Pacific (APAC) Regiona report showed that 94% of consumers are ready to use APMs in 2022 and in the Middle East and North Africa (MENA), digital wallets are on their way to becoming the main form of payment. Even Latin American regions are seeing an increase in financial options, with 55% of the population now in the bank and APMs are becoming more and more options.
As we can see from these statistics, APM absolutely cannot be ignored. Consumers are turning to APMs in ever-increasing numbers. For game operators aspiring to grow their business, developing an APM strategy is now crucial to entering global markets, generating revenue and delighting gamers.
The problem for gambling operators is that with all these different payment methods, some more popular in specific regions than others, and with a gauntlet of contrasting international regulations to navigate, implement and manage all these methods can be incredibly difficult. But with Payment Orchestration, this complexity becomes much simpler.
Managing a Complex Network with Payment Orchestration
According to PYMNTs, the global market for payment orchestration platforms is expected to grow by 20% every year between 2021 and 2026. With each new merchant implementing the technology, consumers around the world have a new place to spend their money from the way that suits them best. .
For gaming operators, the platforms provide a single interface through which all transactions between them, their customers and their payment providers are initiated, directed and validated. The agility this gives gaming operators who would otherwise need to manually onboard new APM options – resulting in extended time to market and reduced competitiveness – is significant.
Another benefit of this is how it simplifies monitoring the performance of several manually integrated and siled payment methods. Payment Orchestration intercepts by automatically aggregating and processing these crucial data streams and providing gaming operators with valuable real-time analytics that save time, prevent human error, and aid in decision-making.
This speed to market, coupled with comprehensive real-time reporting, allows gaming operators to begin increasing their short-term revenue and make better decisions to facilitate long-term growth. However, the opportunities to improve cash flow don’t stop there.
When a gaming operator relies on a single acquirer/PSP, they are the ones who ultimately control the flow of transactions. For example, if the PSP succumbs to a breakdown, the game operator is then directly impacted. Similarly, if the PSP routes transactions to a specific acquirer, there is little the gaming operator can do if the costs it incurs from that acquirer are unfavorable to it. A payment orchestration provider corrects this imbalance by transferring control of transaction flow to the gaming operator by allowing them to create real-time rules to switch transactions and offer APMs to consumers. This dynamic routing improves successful processing rates, gives customers more payment options, and means failed transactions can be re-routed to the next acquirer, reducing lost sales.
Collectively, these diverse payment orchestration features and functionalities unlock the potential of APMs and provide gaming operators with the speed and flexibility to generate revenue at levels beyond ambition.
Speed up the process by using what exists
By connecting directly to an existing core or e-commerce system, payment orchestration platform providers allow gaming operators to develop a growing payment ecosystem where the most suitable partners are easily selected and added. This means that online transactions will be fully optimized to support a full suite of APM, allowing growth opportunities to multiply rapidly.
Knowing that consumers can pay using the APM they prefer, gaming operators no longer have to worry about which platform their games are available on, whether digital or not. This allows game operators to target specific regions by demonstrating their ability to accept the most popular APM consumers in that region, allowing players to play the games they want.
Payments orchestration-enabled APMs add agility and dynamism to today’s gaming operators that allow them – for the first time – to offer consumers the payment method they want, wherever they want. they find themselves. As APM adoption continues to grow, this capability will become even more essential for gaming operators and any merchant business looking to succeed globally.