12 minute read
Payments
by SBC Global
There are many ways that online casino brands can drive new player sign ups. Most focus heavily on bonuses and promotions, but there are other methods that are just as – if not more so – effective.
This is certainly the case in newly regulated markets such as the US where players might lack trust in operators and the incentives they offer when they sign up and deposit for the first time.
To help operators better understand what players look for when signing up to an online casino, Bojoko has collected and analysed three years’ worth of data from our members and site visitors.
From this, we have been able to determine what factors really drive players to online casinos and ultimately make them go on to sign up, deposit and play.
It might come as a surprise that one of the greatest drivers of first-time depositors is actually the payment methods offered by the online casino.
This is an area where US operators can get a jump on their rivals in iGaming states such as New Jersey – at present, most offer a limited range of options including Visa and Mastercard.
But those that offer alternative payment methods like PayPal, Neteller, Skrill and even Paybymobile not only have a point of difference to their rivals but also open up an additional acquisition channel.
In fact, our data shows that the online casinos listed on Bojoko that offer alternative payment options can enjoy as many as four to 10 additional FTDs per month.
While Visa and Mastercard will undoubtedly make up the majority of deposits and withdrawals in the US – especially in the early days of the market – consumer preferences are changing.
In 2019, it was estimated that half of all global ecommerce payments were made via alternative payment methods instead of more traditional options
such as debit cards and credit cards.
This is a trend that is only going to continue and online casino operators in the US must be aware of this and take the necessary action to stay ahead of the game.
Why APMs are becoming more popular
As we move towards being a cashless and even cardless society, the popularity of APMs is only going to increase as they allow consumers to pay via their smartphone devices.
Even today, consumers expect to be able to pay for items in store via their mobile phones and when shopping online they expect to be able to purchase with a single click or tap.
This is simply not possible with traditional payment methods – if depositing at an online casino with Visa you must enter details such as name, address, card number, security code, etc.
If depositing with PayPal, you simply enter the amount you wish to deposit and then log-in to your PayPal wallet using your email address and password.
With the former, it can take more than a minute to fill out the necessary information and make the deposit, whereas with the latter it can be done in just a few seconds.
Unique to the online casino industry is also the need to withdraw and once again it is alternative payment methods that provide the near-instant transaction times consumers expect.
The most popular APMs
PayPal is the most popular alternative payment method. Our PayPal casino page has hundreds of users every month with players searching specifically for sites that offer this payment option.
PayPal has more than 340 million active users and is widely trusted. This will help US online casinos reassure players that they can deposit and withdraw safely and securely.
Mobile payment options are becoming increasingly popular, too. We are seeing more casinos accept Apple Pay as well as one-click options like Skrill 1-Tap.
Charge to mobile payment methods are increasingly common as well, with the likes of Payforit allowing players to deposit into their online casino casinos and charge it to their mobile phone bill.
Advantages of APMs
For US online casinos, there are plenty of upsides to offering alternative payment options to players, especially when it comes to differentiation and meeting player expectations.
As the market matures, players will come to expect the same payment options and transaction times as those in established markets such as the UK.
Operators should offer these payment methods now as a point of difference and also to educate players that they can be used to deposit into and withdraw from their casino accounts.
By adding major payment options like PayPal, operators can build trust among players – this will be vital in the early days of the market and to ensure they maximise the first mover advantage.
Most importantly, however, it enables them to open up an additional channel through which to engage new customers and drive first time depositors at scale. •
BALANCING AI AND THE HUMAN TOUCH IS KEY TO AN IMPACTFUL AML APPROACH
WHEN IT COMES TO
EFFECTIVE AML, a panel of experts at the SBC Digital Payments Conference emphasised that harmonising the human touch and tech is vital
As fraudsters become smarter and more versed in the way they seek to evade operator safeguards, AML strategies are being forced to evolve if they are to remain fit for purpose.
The pandemic and subsequent lockdowns have led to significantly higher levels of digital traffic for gaming and betting operators and it has caused an interesting dilemma over the balance between AI and the human touch when it comes to AML.
At the SBC Digital Payments Conference, Anjali S Menon, Senior
Compliance Officer and Deputy MLRO
of iPayTotal, formed part of a panel of industry experts who shared insights on AML and ‘an imperative approach’.
Menon underlined the pivotal role that tech plays, especially as the level of data rises. She stated: “The recent years have definitely seen a shift from the traditional combating approach to dependence on technology, which
Thees Buschmann, Head of Compliance at Red Rhino Guy Wilkes, Partner at Mishcon de Reya
TECHNICAL SOLUTIONS CAN HELP US A LOT, BUT THEY ARE STILL NOT AT THE STAGE WHERE THEY CAN DO A HUMAN’S WORK
is a great thing, because if you gave me somebody's KYC documentation to verify it manually, I wouldn't know if it was a great photoshop job.
“Someone can just stick their face on someone else's ID proof and you wouldn't really be able to find the difference manually - so that is something that I would say technology has changed over the past few years and even with respect to transaction monitoring you can see a certain level of suspicion suspicious activity or monitor and abnormalities in the transaction pattern.
“So, technology has definitely made things easier for compliance professionals. Now our job is more to analyse the search results we get from big data rather than just focusing on finding from the big volume of data that all of us hold - in that way, I feel like artificial intelligence regulation tech has made a huge difference.”
She did, however, go on to highlight the magnified risk of false positives as a result of deeper reliance on tech and artificial intelligence. The human touch was something she cited as being able to play a key role in helping minimise this risk.
Thees Buschmann, Head of
Compliance at Red Rhino, agreed that Menon’s point is also very relatable from the perspective of the operator. He explained: “Technical solutions can help us a lot in terms of identifying suspicions, but they are still not at the stage where they can do a human’s work - so it’s critical that the technical measures you apply are reflected constantly.”
He continued by outlining that sole reliance on tech does not allow for resolution, but only for ‘some kind of flagging system’, which means that the importance of balance can’t be understated with the integration of the human touch being essential.
Guy Wilkes, Partner at Mishcon
de Reya, was keen to stress that to maintain compliance ‘there is no substitute for a well-trained account manager, who can apply common sense’.
Identifying some of the important factors that the Gambling Commission is looking for when they assess whether operators have done due diligence, he noted: “Where we see firms that do get in trouble with the Gambling Commission getting it wrong is that there has been a lack of common sense applied.
“All you have to do is look at a customer holistically, look at the whole information you have about the customer, and put it all together.
“So for example, one thing that occasionally the commission will pick up on is you've onboarded a customer, you've got their bank statements to verify who they are, but actually on the bank statement, there's a payday loan.
“Now why is this high spending customer using a payday loan lender? It just doesn't hang together, so the commission would then expect you to do more to contact the customer and do more investigation into the circumstances around there.”
Nonetheless, when asked whether the approach of the Gambling Commission is currently too forensic, Wilkes admitted he thinks ‘in some areas, the commission probably goes too far’.
He added: “The requirement is to minimise risk, not to be completely risk-free. That's impossible, so measures do need to be proportionate. I think
the one area where the commission does go overboard is in the change of control applications and funding for operators.
“The Commission expects to see the source of funds - evidence showing forms are derived from a legitimate source and they will expect a very forensic approach. And, so for example, we will see the Commission asked for evidence that a regulated fund, you provide evidence that the monies that are using to invest in a business is from a legitimate source and that frankly is verging on the absurd - but the FCA doesn’t appear to have a
WHEN IT COMES TO SUSPICIONS OF MONEY LAUNDERING, UNFORTUNATELY, THERE IS NOT MUCH WE CAN DO BUT BE INTRUSIVE
proportionate approach to that.”
That being said, Buschmann stated that there was a degree of inevitably about an impactful AML approach being somewhat intrusive.
“We as operators want to act in our best commercial interests and make money, but when it comes to suspicions of money laundering in a broader sense then, unfortunately, there is not much we can do but to be intrusive,” he said.
Further underlining that AML and safer gambling in many ways has to come before being customer-friendly, Buschmann continued: “If we do have a certain amount of yellow or red flags and certain items that are pointing to reasonable suspicion, then we are not in a position where we can make an economic decision and say ‘we do not want to intrude into the life of the customer’.
“It is a matter of communication. But still, when it comes to communication, you have to be very diligent and go through very well-trained employees. You simply can’t mention anything that would raise awareness of your AML suspicions.
“Additionally, how you act depends highly on the case, on the specifics that you have been provided already, and also previous interactions with the customer. It always very much comes down to case management.”
Wilkes agreed, highlighting his belief that there is an increased acceptance awareness and acceptance from consumers of the importance of KYC and AML documentation, which has led to it being a less unwelcome obstacle on the player journey. •
HOW YOU ACT DEPENDS HIGHLY ON THE CASE, ON THE SPECIFICS AND ALSO ON PREVIOUS INTERACTIONS WITH THE CUSTOMER
FOURTH UK NATIONAL LOTTERY LICENCE COMPETITION - THE STORY SO FAR
THE UK GAMBLING
COMMISSION is expected to announce its preferred applicant to run the United Kingdom’s National Lottery when the Fourth licence competition concludes in September. We look at the story so far
The operator which receives backing from the UKGC will later be awarded the licence by the Commission the following month, then go through a transition period from October 2021 to July 2023, before the fourth licence period begins in August 2023 for a 10-year term.
Even though the next lottery licence doesn’t begin for a few more years, the lottery itself is already changing. On 22 April, current operator Camelot Group enforced an 18+ age restriction on all of its National Lottery products, six months ahead of the UK Government’s October deadline to introduce the measure.
With the Invitation to Apply still in full swing until July this year, there have been a few developments in the Fourth National Lottery licence competition as well since we last examined the topic in December 2020’s edition of SBC Leaders.
Back then, just three operators had thrown their hat into the ring to run the lottery: Camelot, Czech Republic’s Sazka Group, and India’s Sugal & Damani.
Since the turn of the year, not only have Camelot and Sazka made significant moves to bolster their bids, but a new operator has entered the competition in Italy’s Sisal Group.
Sisal
In early April, Sisal announced a surprise bid to run the National Lottery with backing from investment firm CVC Capital Partners.
The Italian lottery operator’s bid will be made in conjunction with charity Barnardo’s who, for their part, will provide expertise in raising money for good causes in the UK.
During an interview with The Telegraph, Sisal CEO Francesco Durante stated that winning the UK National Lottery was a ‘big aspiration’, explaining Barnardo’s importance in its bid as well, as he said: “To run the National Lottery, knowledge of the UK market is paramount.”
Barnardo’s CEO Javed Khan added: “Our involvement will strengthen the partnership’s focus on player protection and responsible play, whilst deepening understanding of the UK charity sector and how it works to make a difference in the heart of local communities.”
Sisal has a strong history in lotteries in Italy, having launched its SuperEnalotto draw game in 1997 and its Win for Life draw game in
