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Six Reasons Why Card Payments Aren’t Fit For iGaming
11 February 2021, 10:00:00
Max Emilson, CRO of open banking experts TrueLayer, discusses how open banking can help igaming operators flourish through safer, better experiences by removing cards as the primary payment option.
As players experience seamless digital services in other aspects of their lives, their expectations of igaming operators are also changing, particularly when it comes to payments experiences and service.
The problem is a reliance on cards as the primary payment option. They were not built for online experiences and have been retrofitted into payment flows, which create unnecessary friction at sign-up and throughout the player experience.
It is still common for customers to have to manually enter card details. While the impending introduction of strong customer authentication rules will improve security, it adds another layer of friction to cards, introducing workarounds that deliver a poor customer experience.
In our experience improved payment options are a key driver for players, whether they are choosing a new gaming provider, allocating deposits or deciding to move on. For operators that means implementing more robust, instant pay-in and payout capabilities, or facing increased player churn.
In a survey conducted by YouGov, on behalf of TrueLayer, in Q4 2020, we found that almost two-thirds of players said they were more likely to trust a gaming service that offered instant withdrawals and deposits (64 per cent). While more than half (55 per cent) said they were likely to switch to an online gaming service that offered instant withdrawals.
The good news is there’s a proven alternative in the form of open banking, which enables the use of instant, bank-to-bank payments. It means you can move money at a fraction of the cost, securely and conveniently, while also delivering a vastly better consumer experience. It’s a huge win for operators too, as I’ll explain in greater detail below.
1: Streamlined onboarding
A player’s first experience of your brand is when they want to sign up and fund their account. Research has shown 25 per cent of customers abandoning the account opening process because it was too long or complicated. Further, over a third of players are not likely to remember their card details when signing up to a new service.
With open banking you can link the player’s account to their bank, which gets players up and running in a matter of minutes, using biometric authentication. It also removes the need for players to remember usernames or passwords.
2: Increased Conversion
Once players have successfully executed a deposit, payment failures are up to four times lower with open banking than cards – on average cards fail up to 15 per cent compared to 3.5 per cent for instant bank payments. This means more efficient deposits for players, less time managing failed payments and fewer customer service queries that can ultimately lead to customer churn.
3: Faster access to funds, especially winnings
Card deposits take up to three days to settle, while withdrawals can take up to five days. Even with faster alternatives like online bank transfers, users could still be waiting hours or days to receive their payout. Slow or problematic withdrawals are a key source of frustration, complaints, bad reviews – and ultimately churn. Imagine winning and then not being able to access those funds.
Rapid deposits and payouts consistently top the list of player priorities, with eight out of ten players rating fast payments as important – and they choose their gaming operators accordingly – according to YouGov research (Q4 2020).
4: Reduced fraud
Open banking is safer. Authentication is integrated in the payment flow, often with the customer using biometrics such as fingerprint or face ID to identify themselves in their banking platform, so operators can be sure the person opening a player account and transacting on their platform is legitimate. There are no more chargebacks, no credential sharing or password storage.
5: Lower operational costs
Open banking based payments save time and reduce cost by accelerating otherwise manual processes such as payment reconciliation. Refunds can be automatically issued to the same bank account that was used to make the deposit. This reduces opportunities for human error compared to cheque or manual bank transfers as well as cutting down customer support cases on lost or never issued payouts.
6: Improved brand experience
By connecting to a bank account, players can top up and withdraw funds seamlessly using payment initiation services. Customers are not redirected to an e-payment interface, it all happens within the operator’s app or website so long as the customer has authorised the operator to be a trusted holder of login and transfer credentials.
In 2021 it’s time to leave the card behind
There is an opportunity for operators to differentiate and drive customer loyalty. And what’s more, your players want it and use it. According to a YouGov survey (Q4 2020) bank transfers are the most common and preferred way to pay into gaming services in the UK, Germany and the Nordic territories, with 64 per cent of players depositing funds with this method. This compares to 23 per cent using credit cards and seven per cent using digital wallets.
Cards have had their time. 2021 is the year that payments, powered by open banking, come into their own in igaming.