overload

Words by VIKTOR KAYED

Finding an igaming payment solution has never been easier. Hundreds of payment providers are saturating the current market, giving you plenty of options to pick from.

Choosing a solution that specifically addresses your business needs can, however, prove a bit trickier. It requires a more strategic approach that fully evaluates the online gaming landscape in order to syphon the right from the wrong payment partners through informed decision making.

It’s a process that requires some real expertise, which is where Xace’s Alexandra Cernescu can help.

“Choice overload is a very modern problem. Everywhere in contemporary society, we are faced with endless possibilities. Whether it’s deciding between 20 variations of coffee at your local café, or where to go on holiday, through to serious decisions about investments or career paths - the sheer number of options facing us can be overwhelming,” she said.

“All too often, choice overload can paralyse us, as we agonise over which thing to choose. And there’s always a lingering sense of ‘what if…?’ even after we’ve made our decision.

“If you are setting up an online gaming business and seeking a payment solution, then choice overload will surely be familiar. Today there are countless methods for receiving payments from online gambling customers, and a seemingly endless variety of banks, payment service providers, e-wallets, and other solutions that, in one way or another, facilitate payments.”

A Profusion Of Payments Players

An important step in navigating through this choice overload, of course, is to understand why it exists in the first place.

“When you’re planning your iGaming company’s financial set-up, you will essentially need three basic services,” Cernescu continued. “First you’ll require a business bank account for general purpose banking.

Then, you need a merchant account for receiving deposits and distributing winnings. And finally, you need a payment gateway, which funnels money to and from the merchant account. All of them need to be able to ‘speak’ to one another.

“Today there are a huge number of providers in all of these areas. There are countless business bank accounts that are more or less well suited to the gambling sector. A cursory search online will throw up hundreds of firms offering merchant accounts. And there are also countless payment gateway providers of various flavours.”

Part of the reason for this level of choice is that gambling markets in different countries have evolved in different ways, meaning certain local payments companies have become popular with local players.

“In France, for instance, a prepayment card called Neosurf is one of the most common methods for gambling online, while players in parts of the former USSR prefer using local e-wallets like Qiwi,” Cernescu explained.

“A related reason is that in some countries, consumers are barred from making deposits using credit cards. Alternative methods - such as cryptocurrencies, prepaid vouchers and e-wallets - must be used instead. This can be a headache for gambling companies. You will need to find a payment gateway that can connect with all these different payment methods.”

Cernescu continued: “Traditional banks are also hesitant to engage with a sector that they still view as ‘high risk’. In response, a wide range of alternative banks, e-money institutions and payment institutions have sprung up. These fintech startups often deliver high-quality, cheap and efficient payment services to the sector.

“And some of them have dedicated compliance departments with real expertise in the iGaming sector. This is undoubtedly a positive thing, but again, all this choice makes deciding between various fintechs and neobanks a challenge.”

Narrowing Down Your Options

Xace’s COO suggests evaluating your needs and getting to know your customers before drawing up a shortlist of payments partners.

“First, think about geography. Where are your customers (both current and future), and what payment methods are common where they live? Your payment system must connect with the most widely-used payment technologies in your target market,” said Cernescu.

“In many places, people are happy to gamble online using credit or debit cards. In other places, prepaid vouchers are most popular, while e-wallets are the go-to method elsewhere. You can’t expect people to gamble with you, if you don’t let them pay in their preferred way.”

She continued: “Currency is also a considerationespecially if you plan to operate internationally. You want to be sure that your merchant account can actually accept payments in all your customers’ currencies, and convert it with reasonable FX rates. This includes cryptocurrency too.

“If you’re unsure how people want to pay, it’s worth doing some market research to find out what they want. There is no point in paying extra to offer cryptocurrency payments, for instance, if no one in your target market actually uses it!

“Once you have a clearer idea of currency and payment methods, you can go out to market with a list of ‘need to have’ and ‘nice to have’ features that you would expect from your payment and banking partners.

“Then it’s a case of narrowing down your options based on other differentiators. How quickly can they process payments? Can they process multiple payments at once? What’s their security record like? Do they have dedicated compliance experts? Does their customer service seem responsive? And finally, how easy is the solution to use?”

DON’T BE OVERWHELMED BY CHOICE OVERLOAD

Overall, it is “undoubtedly” a good thing that online gaming businesses have such a wide choice, Cernescu believes, as more competition births more innovation and features at better rates.

“And by taking some simple steps to narrow down your options and to work out what you really need from a payment service provider, making this decision should become much more straightforward.”