25 minute read
Payments
by SBC Global
Transactions being an obvious strength of LiveScore’s Payments Director, Das went on to summarise the dangers of choke points for operators that are inconsistent with their depositing and withdrawal journeys.
“Choke points in the payments depositing and withdrawal journeys can be hugely damaging for betting operators. Players use our products to wager and win – if either of those two elements are disrupted (and to wager, you usually must deposit), the overall brand promise and experience is tainted.
“Given that some players are of a superstitious nature, any disruption to the ‘normal’ or ‘expected’ flow can cause them to walk away to another operator. Signposting the journeys is critical here – so if some choke points are inevitable (e.g. from the card issuer) – make them as predictable or ‘normal’ as possible.”
In its decades-long lifespan,
LiveScore has managed to refine the payment process in a way that combines simplicity with effectiveness. Always on par with regulations, the company became one of the UK pioneers to deploy 3D Secure for card transactions.
Das went into more detail: “When it comes to card transactions, we were early adopters of 3D Secure and made use of exemptions, deploying these well before the SCA deadlines hit UK merchants.
“The insight we worked with was that we needed to ‘train’ the machine-learning risk engines on the issuer side, so we did a fair bit of experimenting around 3D versions and exemptions with each issuer, to achieve the best acceptance rates.
“With payment methods in regulated markets, ‘less is more’. You have more recreational punters, so you’re better off offering a smaller selection of recognisable methods, rather than dazzling them with a long list of obscure alternatives.”
Such recognisable methods also include digital wallets, which Das believes can carry a lot of weight for operators that have to deal with a large customer flow.
Although the speed they offer in terms of payments and verification can help manage the player base, fraudsters can still convert “really well”, according to Das, bringing more problems with them when operators choose speed at the cost of friction.
“You have to understand the value that digital wallets bring to the table. SCA for card transactions has given issuing banks a mandate to interrupt payment flows willy-nilly, regardless of the true chargeback/fraud risk, and they do.
“Consider the nuisance of having to go into a bank app on a phone you might not have at hand, to authorise a £5 transaction for a quick bet before you hit the next tunnel on your commute. Or, you use PayPal or ApplePay to quickly complete the transaction in one step.
“Digital Wallets still have to meet the SCA requirements – they just approach the problem differently, utilising technologies such as behavioural biometrics.
“Can you use a card to register
and deposit with an operator? Nope. With some digital wallets, checkout is a breeze in comparison, filling in everything from your name, billing address and date of birth in one quick, consented journey.
“But, not all digital wallets are created equally, and they will have varying levels of player verification. You must always remember the maxim that fraudsters convert really well – so sometimes friction is actually desirable, and will, in turn, drive up player value.”
With LiveScore’s global perspective,
Das was also able to point to some of the international markets that can be used as case studies for operators looking to learn more about the payment journey and customer friction.
“Each of our markets has a unique twist to how they do things,” he noted. “Verifications in Nigeria were an eyeopener for example, where, by hunting around with local experience, we realised that we didn’t need customers to send in documents at all – we can simply look up the documents, based on their document number and personal details.
“This process also builds trust with the customer and establishes us as a fully-licensed and legitimate operator. In the Netherlands, the opposite is true – being able to operate and offer IDEAL bank transfers means that while IDEAL does generate friction, it also shows you as a legitimate operator.
“The lesson here is that friction itself isn’t the problem – it’s understanding the customer’s attitude to the friction, to then determine the best way to address it, and whether to accentuate or minimise it.”
Of course, when it comes to payments
and friction, the question of security is also frequently raised. Luckily, technology advancements have allowed for the deployment of modern antifraud measures such as biometrics.
However, Das explained that gambling operators may have been placed at a disadvantage due to how limited usage the technology brings to the table in comparison to PSPs.
Saying that, in his eyes, the biometric technologies have evolved “not as much as hoped, and at the same time massively”, Das continued.
“From an operator perspective, the use of biometrics has been limited to specific use-cases such as customer verification (think selfie IDs or videos), and login.
“Delegated SCA is the ideal vehicle to implement biometric technologies, and has been part of the SCA framework right from the start. But in practice it hasn’t been rolled out to merchants by the card schemes.
“On the other hand, the adoption of biometric technologies has been rapid when it comes to PSPs, who have been using the technologies to make SCA easier for their customers.
“So, they’ve made life easier for customers wanting to make deposits to operators – but life for the operator hasn’t changed much, beyond benefitting from liability shifts and a dip in fraud rates.
“The time for biometrics in betting is coming – with the rollout of Passkeys and delegated SCA, we’ll see a continued growth in this direction.”
But use of biometrics shouldn’t be the end goal, as LiveScore’s Payments Director added that “it’s worth weighing up the pros and cons” due to the adoption costs.
“It's worth analysing the painpoints in the customer journey, from the perspective of acquisition fraud/verifications and abandoned transactions,” he said. “Also, there are perhaps other technologies that can be used more easily to achieve the desired results, e.g. the use of Open Banking and eIDs.”
Asked to then go back and reflect on the future of SCA and PSD2 regulations and how they might affect investments in Europe, Das explained that there are currently large opportunities in bankto-bank transfers at scale that open banking companies should exploit.
“PSD2 mandates Open Banking, but that’s not the end of the story. I look at the PSD2 SCA mandate as being part and parcel of the same goal: to drive bank-to-bank payments, and diminish the role of the card schemes.
“I don’t know if it’s a case of unintended consequences, but SCA has meant that most cardholders now have the means to authenticate card transactions on their phones, while they may not have bothered with mobile banking apps before SCA was rolled out. Of course, that also now means that they have the ability to authenticate bank-to-bank transfers from those very same bank apps.
“So, in a sense, the mandated SCA for cards has enabled support for bankto-bank transfers at scale, so the scene has now been set. Investment in Open Banking infrastructure now needs to step in to exploit that, as we’ve seen with companies like TrueLayer.”
LiveScore is already looking into
2023 with its investment planning, looking to focus specifically on technology. This is what Das believes is the “transformative” way to drive the company forward.
“We’re investing heavily in technology to flatten the headcount growth as we scale up as a business, and to pay down some of the technical debt we’ve accumulated.
“As a smaller operator, we didn’t have to worry about straining our suppliers and the cost of outages was small – now the focus is on bullet-proofing our services, building resiliency and scale. 2023 will be a transformative year for LiveScore.” •
JIMMY FONG, CHIEF COMMERCIAL OFFICER
AT SEON, highlights the importance of a robust KYC process and the need for igaming companies to take a more bespoke approach to fraud prevention - a decision which can, ultimately, help protect the bottom line of their business
BY JOE STREETER
SBC: Firstly, can you tell us about why the threat of fraud within gambling is so unique and requires a specialist approach?
JF: Especially in places like the United States, we’re seeing lots of companies run promotions to help establish loyal customer bases and I think that has led to bonus abuse becoming a particularly severe problem. Similarly, various fraud types like multi-account and account takeovers remain alarmingly popular. Once again, these are issues affecting every online sector right now, but still something the industry needs to take very seriously.
Money laundering also remains a huge issue across the igaming sector. Now more than ever, igaming businesses need to know exactly who they are dealing with when accepting money online, or in-person. If they don’t then it’s easy to see how money could be laundered through an
igaming provider, which could lead to legal troubles further down the line and, more broadly, would have the potential to tar the name of an entire sector.
Thankfully, effective online fraud prevention systems, such as the one we offer at SEON, are able to minimise risk and combat online fraud. Our solution can detect and stop igaming fraud in its tracks in real-time, mitigating the problem before it’s even occurred. What’s more, the highly flexible and adaptable system can be tailored over time, to help igaming providers deal with an ever-changing regulatory landscape and the rising volume of fraudulent activities.
SBC: When it comes to implementing a secure process, how vital is minimising friction and how do you ensure that there is as little friction as possible in the consumer journey?
JF: It’s absolutely crucial, especially in such a competitive marketplace. Igaming operators need to focus on finding the best conversion processes and user experience for their customers, and prioritise solutions that allow them to reduce user friction, ensure player legitimacy and gain a complete view of the user journey. All these steps are interconnected, and the right fraud prevention system is able to satisfy all needs in an efficient and convenient manner.
Unfortunately, some gambling operators take a one-size-fits-all approach to fraud prevention. This either makes their fraud prevention processes too heavy-handed, or largely inefficient. By contrast, a good fraud prevention tool should give you enough flexibility to alternate between light and heavy know-your-customer (KYC) processes. Our revolutionary
SBC: What extra challenges does a fast-paced environment present, where a significant number of transactions are taking place?
JF: There are two main ones. The first is one you’ve mentioned, finding
AI machine-learning fraud prevention does just that and makes fraud management simple and accessible to all by analysing over 50 online platforms to help validate a person’s identity via one API call.
Unlike some alternatives, our solution can be integrated into existing fraud prevention stacks to allow businesses to enact real-time customer verification and consumer affordability checks. As such, our platform helps to limit things like multi-account attacks, account takeovers and bonus abuse, whilst promoting more responsible gambling practices amongst users. In doing so, the powerful solution helps igaming operators to mitigate challenges associated with online fraud.
the balance between a robust fraud prevention and a frictionless customer journey. When you work in a sector with high transaction volumes, such as igaming, then this problem intensifies. If your system is too relaxed, then fraudsters will take advantage which could incur significant costs. By the same token, if it’s too rigid then genuine customers may take their business elsewhere.
Similarly, high transaction volumes often leave customer service and fraud management teams thinly stretched,
rendering manual reviews obsolete. That’s why I’d recommend businesses in the igaming sector to explore enhancing their existing systems with more comprehensive fraud prevention solutions.
There are fraud prevention tools, such as ours, that can be onboarded in a matter of minutes and will start to deliver a return on investment almost immediately, helping businesses to save on the time, labour and monetary costs previously associated with fighting fraud.
SBC: Why is it so pivotal to catch potential fraud early in the consumer journey?
JF: Again, like with any sector, the earlier you catch a fraudster, the less damage they’re able to cause across your platform. To this end, the best time to catch an online criminal is at the point of sign-up, well before they’ve even had a chance to interact with your service.
Our technology is enabling igaming providers to do that, by assessing key digital identity points, such as analysing over 50 social lookups, at the point of sign-up and doing more robust fraud checks should an account appear suspicious.
SBC: How can the evolution of biometric technology be key to enhancing fraud detection, specifically within the digitalised payment space?
JF: If used correctly, biometric technology can offer a low-friction, high-impact authentication system for businesses across several verticals, including digital payments. In recent times, we’ve already seen how successfully these systems can be incorporated into embedded payment features, such as ApplePay. However, there are still many problems associated with biometric technology, which mustn't be ignored.
Less sophisticated biometric technologies often produce false positives, which undermines their effectiveness. What’s more, we’re now seeing the rise of biometric spoofing, where criminals use fake biometrics to gain access to accounts, funds or even spaces they should not have access to.
There are methods coming to the fore, such as liveness detection, which can help to ascertain if a biometric marker has been provided by a real person, or is more likely to have been spoofed. Over time, these solutions might help to mitigate the challenge, but they aren’t universally adopted yet.
different customers, as well as different periods of the year. Taking a onesize-fits-all approach is more than just unsuitable, it’s practically unviable and could end up costing your business significantly in the long-run.
Thankfully, effective online fraud prevention systems, such as the one we offer at SEON, are able to minimise risk and combat online fraud. Solutions like ours can detect and stop igaming fraud in its tracks, mitigating the problem
before it’s even occurred.
What’s more, the highly flexible and adaptable system can be tailored over time, with the ability to set up custom rules and unique restrictions to limit certain features or functions across transactions. Thanks to this, igaming providers are able to deal with an everchanging regulatory landscape and the rising volume of fraudulent activities. •
SBC: Do you believe that a more intricate approach to fraud detection can have a positive impact on safer gambling and KYC?
JF: It’s an unequivocal ‘yes’ from me. The challenge for those working in the igaming sector is to find flexible approaches to fraud prevention management, which can be tailored appropriately to suit different markets,
CRM NEEDS A NEW ‘SECRET SAUCE’ IN A WORLD WITH NO BONUSES
AS OPERATORS NAVIGATE
A WORLD with restrictions on bonuses, SBC Leaders asks whether CRM is the future for understanding customer behaviour and being able to create player engagement strategies
William Hansen, New Business Executive of Xtremepush
BY TED MENMUIR
Years of regulatory interference and voluntary adjustments have resulted in the popular opinion that marketing is undoubtedly the most difficult business discipline for igaming operators to succeed in.
Yet amongst igaming’s multitude of marketing facets stands Customer Retention Management (CRM) as the segment most disrupted by the wholesale changes to how operators are required to engage with customers whilst also ensuring that they abide by new compliance rules across all regulated markets.
A gathering of igaming experts in London’s Southbank Centre discussed how “boundaries could be pushed on igaming CRM and player engagement” against a fast-changing regulatory backdrop, testing the resources and technical capabilities of operators and their related software suppliers.
Respecting costly boundaries
The limits and boundaries on player retention were detailed as a prominent concern by William Hansen, New Business Executive of Xtremepush, who reminded the audience that “customer retention begins outside an operator’s remit in the channels of Facebook, Google, Apple iOS and other major tech platforms”.
Across all jurisdictions, big tech policies have tightened on gambling promotions, which must be accounted for when planning campaigns or launching new third-party software to track customers.
Hansen recognised that marketing and CRM teams operate within a “hypersensitive ecosystem, as penalties are no longer simply the domain of regulators”. This, he said, was the reason why big tech platforms can double the penalty cost on those operators and software providers that are found to be non-compliant - a situation that incumbents can ill-afford to hinder their businesses with.
Of note, Hansen outlined recent changes on Apple iOS related to the “technical interpretation of real money gaming apps and operator campaigns and free-to-play (FTP) promotions being rejected by Facebook”.
The conundrum has recently
intensified as big tech platforms play a critical role for tier-1 operators who have doubled down on recreational player strategies to lead their marketing campaigns as they seek to replace revenues that might previously have come from VIP customers.
The onus on operators to implement their recreational player strategies throughout all marketing components (CRM, acquisition, promotions) takes place as player behaviours change across all jurisdictions.
Poof… no more bonus!
The trend was visible to customer engagement expert Andreas Hartmann, CEO of VAIX, the personalisation studio of Sportradar AG. He noted: “If we compare to previous years, we are seeing that player retention curves are going down across the majority of markets ... and this trend is only getting quicker.” For Hartmann, it’s easy to dissect the root of the downturn, which reflects “markets such as Belgium, Sweden and the Netherlands, where the traditional options to acquire and retain players have been taken away from operators”.
“In these markets it’s been poof… and bonuses and incentives have been taken away,” he said. “Plus, the new rules demand that you can only engage a customer when they are logged in.”
Working alongside marketing teams, Hartmann noted a tough transition for “operators who have solely based their player journeys on providing bonus rewards, with little else to communicate”.
Stricter bonus limitations have been applied at a time when operators continue to expand the products available in their casino suites to now
Andreas Hartmann, CEO of VAIX
include new slots and live games. Many of these companies often choose to also deepen their offering of in-play betting markets.
However, restricted on the use of bonuses, Hartmann acknowledged that it is harder for operators to test their new games and betting markets with customers – an engagement dynamic that should concern all software suppliers.
When asked about potential resolutions to this debacle, Hartmann responded: “I believe that it’s about bringing simplification back to the customer.
“No one can pick a game out of a catalogue of 10,000 casino titles. So preference here is fundamental. For sports betting, we are seeing the emergence of micro markets, especially in the US.
“Operators have more data on customer preferences, yet they are still not sure if they are delivering the right content to the customer. Without a bonus, it's about packaging that game, acca or bet to your customer at the right moment … that should be the focus.”
Intelligence wins
Taking a back-to-basics approach, operators are left wondering what the secret sauce will be to replace bonus incentives.
As game suites have expanded their content portfolio, number of markets and even the bet types that are available, the bonus has remained ever-present as an unchanged blunt tool ingrained in operators' day-to-day retention strategies.
Overseeing CRM disciplines for over 50 UK online casino and bingo brands, Rebekah Douglas of Grace Media believes that data intelligence is the optimal discipline to customer engagement success.
Douglas highlighted the successes of CRM, having recently spearheaded Grace Media’s CRM transformation from a data management team to an intelligence unit for its UK brands.
Reflecting on a three-year transformation, she noted: “It was a decision we had to take, as we could no longer wait to have each campaign approved by compliance.”
Tough adjustments saw Grace Media revise the data channels that it was using to feed its network of sites: “We undertook an audit, focused on the interactions of recreational players.
“What we found is that we had a lot of systems that could tell you a player’s worth and average spend, blunt measures but little else, creating silos in our approach to targeting customers”.
Aware of customer changes affected by bonus restrictions, Grace Media rebuilt its CRM tools and framework of third-party solutions to provide marketing teams with granular data on player engagement.
Moving away from VIP segments, Douglas said: “It might sound trivial, but it was critical to understand which players were playing on fish-themed games and when they were playing.”
In previous campaigns, Grace Media had segmented by two or three different criteria on customers. However, its new solution allows for optimal targeting of up to 10 individual
customer variables, thereby providing an optimised platform to target and improve the conversion of recreational customers.
“Bonuses and free spins work, but they can fatigue the customer,” Douglas concluded. “What is required is real intelligence on the customer and why they play without any form of incentive.” •
Rebekah Douglas of Grace Media
CATENA MEDIA: STAYING ON TOP ARGUABLY HARDER THAN GETTING THERE
DUSTIN GOUKER, outgoing Vice President of Content for North America at Catena Media, reflects on the company’s growth over the past four years and the increasing number of opportunities within the online casino space
BY JESSICA WELMAN
Admittedly, it felt a little strange being tasked with talking to someone else about how Catena Media’s North American operations work. I was Employee #2 when Catena started the division. Employee #1, Dustin Gouker, now serves as Vice President of Content for North America.
We worked together through pre and post-PASPA repeal, over 20 state online gambling launches, and a period of growth where it seemed like all we were doing was interviewing new content creators. What started as a portfolio of sites covering a handful of states with a skeleton crew grew into a behemoth in the US affiliate space in the span of four years.
It’s been 18 months since I last worked with the Catena team though, and in that time, the company has continued to grow both internally and through key acquisitions like Lineups.com and i15 Media. If I thought we had changed at break-neck speed over four years, speaking with Gouker, I realised perhaps as much, if not more, change has been packed into the time since I left.
There are the obvious, external changes like the addition of a datadriven site like Lineups.com, but with
that comes internal change. For Gouker, integrating a site like that into a portfolio comes with internal changes as well.
“We try to let the acquisitions be what they were,” he explained. “I think we try to use as many differentiated approaches as possible.” Moreover, he noted there are opportunities to improve existing successful formulas by sharing what they know with new acquisitions in addition to learning from them.
Learning as they go is essential for Catena. The company is one of the top affiliates, but that status isn’t something you achieve then rest your laurels upon. Catena definitely had a head start, but things have changed since 2016.
“Five years ago, we were really the only ones focusing on North America. And it was almost too easy at that point because the amount of competition was so low. Then it started getting aggressive quickly,” Gouker recalled. “We're still the leader in North America, but there's so much more competition and that's not just from the will that other affiliates have brought to this but traditional media as well, which really only manifested itself in the last year-and-a-half.”
What is interesting about the emergence of traditional media competitors is that, in many instances, they team up with affiliates rather than compete against them. For example, Catena recently took over the deal with Advance Local to work together on NJ.com. These partnerships are one of the few areas where Catena has not been a pioneer and its competitors have been quicker to embrace traditional, local newspaper partnerships.
Gouker conceded these partnerships have value, but he also questions if they are a sure-fire return on investment.
“Those deals have been kind of pricey for everyone. Sometimes they work, sometimes they don't. Sometimes, smaller sites can work. Sometimes, the larger sites that are more expensive to get, that audience could work or could not.”
Meanwhile, he cited Crossing Broad as an example of a smaller site with a dedicated audience that has converted into very successful affiliates.
“We'd be silly to think that just niche affiliate gambling sites are the only things that are going to win. Basically, if you have a good authoritative site, you have a chance to be a good gambling affiliate as well,” he added.
Establishing that authority is something that has changed over the years as well. Ranking for core search terms has always been integral to the business, but Catena initially built its reputation with quality news stories on sites like Legal Sports Report and Online Poker Report. Now, though, news is an even more important component of the game plan.
“News results were not part of the game in search at one point in time. Now, it's a huge part of it,” Gouker said. “You have to be thinking about that in terms of whether you can capture that share of the audience as well. It's gotten a lot harder and we can't just rely on what we've done.”
The difficulties extend beyond SERPs, too. With every passing state launch, the low-hanging fruit of new sign ups dries up a little more. More mature
markets across the world continue to need affiliates long after launch, but Gouker readily admitted the shrinking map of states without sports betting impacts the bottom line.
“Especially in sports betting, so much of that water is under the bridge. Launches are this critical mass of when people sign up for sportsbooks. If you've missed that, you've missed a lot of the cash grab so far. It’s not like this is a bad business to be in, but you're trying to compete for a share of recurring revenue instead of establishing yourself number one right away, and taking that cash up front.”
That is not to say a new competitor couldn’t come into the sports betting affiliate space, run a standard SEObased affiliate playbook, and succeed. Where that could work though is online casino.
Catena is already paying attention to the potential of online casino, particularly with its Play brand of sites. Gouker also understands that the market is more complex than tacking casino pages onto a successful sports betting site.
“If you're not looking at the casino and that opportunity, then you might be behind. It’s a different audience. Even though there's cross-sell, it's a different type of site,” he said. “I don't think you can always just bolt on casino to sports betting and say, ‘hey, that's going to work.’”
Affiliates are increasingly finding situations where the conventional approach either isn’t as effective or won’t work. Period. Canada is a great example. The industry standard has been to highlight bonuses and deposit offers. Those are off the table in Ontario. Moreover, the top operators so far were grey operators before, so there wasn’t the same pool of potential players to convert at launch.
“If you're an existing grey market operator, in Ontario, you have a pretty good advantage. If you're an endemic Canadian brand, if you have an advantage, you don't have to go acquire customers. You already had the customers, you just transferred your base.”
New operators are struggling in Ontario, both because they don’t have that pre-existing base of customers in the territory and because the marketing rules limit both affiliates and operators when it comes to presenting what they have to offer.
“If you are a new player, it [online gambling] doesn’t look terribly attractive to you if you don't know what's going on and an operator can't talk about what bonuses they offer until you actually get on their site. So that's a tough slog for all of us. Not just affiliates, but for operators, especially new operators,” Gouker noted.
Ontario isn’t the best affiliate model,
but it could be a sign of things to come. Catena Media and others need to continuously adapt to new regulations, new markets, new competition, and new algorithms. The climb to the top may have been relatively simple, but defending the summit is a complex and difficult ongoing battle. •
XTREMEPUSH: KEEPING PLAYERS HAPPY, ENGAGED AND EXPERIENCE-RICH
ROBBIE SEXTON, Director of Partnerships and Sports Betting and Gaming at Xtremepush, took time out with SBC Leaders to share his views on what he describes as “tapping into implicit buying behaviour”
