Gaming operators bet on new payment methods to open revenue streams
In 2018, over 35% of online gaming payments were made through digital wallets, according to new data from global financial technology provider FIS. The data from its recently acquired Worldpay merchant business indicates that the prevalence of smartphones, and availability of mobile applications, is enabling online gamers to embrace real-time payments and collection of winnings by betting on the go.
According to FIS’ 2019 edition of the Global Gaming Payments Report, this trend is expected to soar by 2022, making digital wallets the preferred payment method for online gaming activities (like betting on March Madness picks) globally. Player demand for improved mobile gaming experiences has encouraged them to embrace those payment methods that can deliver a faster and more frictionless gambling process.
Alongside the improved user experience that digital wallets offer, additional layers of security provide greater protection for both players and operators, with encryption, tokenization, and device authentication helping to reduce fraud.
With Strong Customer Authentication (SCA) being a major legislative drive for merchants over the coming 18 months, there could be significant changes to payment processing, and how deposits work across online gaming in general. As a result, FIS predicts an increased demand and adoption of digital wallets such as Apple Pay and Google Pay, which satisfy SCA regulatory requirements.
As of 2018, gambling players in regulated markets across Europe, including France, Italy, Denmark and Germany have embraced alternative payment methods when placing their bets. While card-based deposits remain dominant for regulated online gaming in Belgium, Spain, and the UK, their share in this space shows signs of decline. FIS predicts that use of card-based deposits will fall by almost 10% across Europe by 2022.