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Six Reasons Why Card Payments Aren’t Fit For iGaming

Six Reasons Why Card Payments Aren’t Fit For iGaming
Six Reasons Why Card Payments Aren’t Fit For iGaming

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Six Reasons Why Card Payments Aren’t Fit For iGaming
Six Reasons Why Card Payments Aren’t Fit For iGaming

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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.

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