The gaming industry has experienced tremendous growth in recent years, with more people than ever before engaging in gaming activities1. A recent study found that the total revenue of the European gambling market reached 81.1 billion euros in 2020. Projections expect that to increase to 126.3 billion by 2026.
As the industry continues to expand, and online gambling plays a larger and larger role in the marketplace, it is incumbent on the gaming companies to offer the latest payment options in order to ensure the best customer experience. In this highly competitive space, the difference between success and failure often comes down to how seamless the payment process is for players.
As online gaming has taken centre stage in the marketplace, the demand for payment innovation has been driven by a rise in fraud and how to prevent, as well as a means to attract customers who require a high level of trust that transactions will be secure. This has meant gaming companies must have global payment platforms that they can integrate into.
The online gambling industry has witnessed a steady evolution in recent years, benefiting from technological advancements and the shift towards digital platforms, especially during periods like the COVID-19 pandemic. This has led to the emergence of several trends within the industry, particularly in payment processing and the handling of funds. Instant withdrawals and the use of alternative payment methods have become increasingly important for enhancing customer loyalty, with gamblers favouring platforms that offer flexible payment services and quick access to funds1.
One of the biggest concerns around online gaming is the threat of fraud. According to iGaming Business, in 2022 the European Commission raised the threat level for money laundering in online gambling to its highest possible rating.
The threat of fraud is a persistent concern as the industry rapidly grows. These concerns include a range of fraudulent activities like multi-accounting, credit card fraud, chargeback fraud, and money laundering, which not only result in direct revenue loss, but also in hefty fines for compliance failures. For instance, in 2021, the total amount of fines issued in the gambling industry in the UK exceeded £40 million2.
In response to these challenges, the gambling industry is turning to advanced KYC/AML (Know Your Customer/Anti-Money Laundering) products, like transaction monitoring and know-your-transaction (KYT) systems. These systems enable gambling companies to manage risks by monitoring and reporting suspicious activities and analysing user behaviour, which can be particularly useful in combating fraud2.
Least Cost Routing (LCR) is another method being adopted by merchants, including those in the gaming industry, to reduce costs and mitigate risks associated with payment processing. LCR allows merchants to route transactions through the lowest-cost network, which can be especially beneficial given the differing fees associated with various payment networks like Visa, Mastercard, or Eftpos. This routing method can result in reduced payment processing fees and increased security for the transactions3.
Another important trend in the gaming industry is responsible gaming. As more people engage in gaming activities, it is important for businesses to identify early addicts and limit their access. This can be achieved through the implementation of responsible gaming policies and practices. By promoting responsible gaming, businesses can help to ensure that their customers are able to enjoy gaming activities in a safe and healthy manner.
The gaming industry is fast recognising the importance of streamlining their payment processes and reducing costs. The right provider will offer global capabilities that can help these businesses expand operations into new regions and markets, while also being able to manage multi-acquiring to satisfy the need for back-up redundancy.
In summary, the gaming industry is rapidly evolving, and it is important for businesses to stay up to date with the latest trends and developments. By implementing responsible gaming policies, protecting themselves from fraud, and offering real-time payment options, businesses can provide their customers with a safe and enjoyable gaming experience. Additionally, by partnering with a provider like Fiserv, gaming operators can position themselves to meet the needs of a rapidly evolving marketplace.