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Weight of the wallet: Digital wallets’ powerful payments role for sportsbooks

Discover the value of digital wallets for online sportsbooks’ conversion of sports bettors and their payment strategies.

In 2024 is it still accurate to describe digital wallets as an alternative rather than traditional payment method? Today the leading wallets for online sports-betting are over 20 years old and have become the go-to payment method for many players, with their popularity trending even higher among operators’ coveted VIP bettor segment.

Leading payment method after cards 

Paysafe’s iGaming-focused NETELLER digital wallet was launched in 1999, the same year that PayPal was unveiled, while Skrill, also developed with gamblers in mind, was brought to market in 2001. Over the last two decades, digital wallets’ popularity has grown from their being a niche option at the cashier into the top payment method for players after cards. 

Today 37% of global online sports bettors consider digital wallets a payment preference, according to our December 2023 research surveying players across North America and Europe. Wallets’ popularity trends even higher in some continental European markets, with over half of Italian players (53%) and Germans (52%) preferring to transact with a solution like Skrill and NETELLER.  

In the U.S., 33% of bettors list digital wallets as one of their favorite payment methods. And they are even more popular for wagering in certain states, especially the established markets of New Jersey (38% of bettors), which launched in August 2018, and Pennsylvania (36%), live from May 2019.

Higher popularity with VIPs

Given the betting volumes they drive, high-stakes VIP bettors are a key focus for operators when it comes to player acquisition and retention. With that in mind, it’s noteworthy that VIPs are even more keen on transacting with digital wallets than casual players.

Over a third of online sports-bettors who wager infrequently prefer doing so with a wallet – 36% of those betting once a month or less and 34% who wager a few times a month, according to our research.

But the popularity of digital wallets trends much higher among the most frequent bettors, who we can consider VIPs. Almost half (46%) of those wagering 5-7 times weekly consider a wallet a preference, with almost as many (42%) of those placing 7+ bets a week favoring a wallet.

Digital Wallets’ diverse benefits

Why do VIPs prefer wallets? Their ability to facilitate wagering across multiple sportsbooks appears key for these bettors, who tend to wager with more brands than average (maintaining 2.8 sportsbook accounts versus 1.5 for all players). Our research indicates that 26% of global players betting 5-7 times weekly are attracted to wallets because of this benefit, compared to 19% of bettors in general.

But for both VIPs and the average player, the benefits of wallets are diverse. Their financial security is of paramount importance, with 39% of global players emphasizing this advantage. Players in Italy (43%) and, above all, in France (47%) appear particularly drawn to the benefit of transacting safely.

Speed is almost as important. Three out of 10 global players (31%) consider that wallets provide the fastest payouts of any payment method. In tandem, digital wallets’ deposit speeds are also a major draw, with 28% of bettors emphasizing this.

And connected to the security benefit, players seem to appreciate that transacting with a wallet means they don’t have to share their financial info with sportsbooks. This makes digital wallets the go-to payment method of a quarter of players (24%), again trending higher in Italy (32%) and France (33%).

Future growth

With their many benefits, why have some bettors yet to embrace digital wallets? Lack of familiarity is a major factor, with 32% of bettors who don’t use a wallet for wagering also not using them for broader eCommerce, while 25% are satisfied with other payment methods.

Interestingly, confusion on wallets’ core benefits appears to be a significant barrier. A quarter of hold outs (24%) feel they aren’t secure, which is of course contradicted by actual users, who, as we discussed, consider security the top benefit. And another fifth (19%) are even more transparent about their ignorance, saying they are unsure what a wallet is and how it works.

Overall, the biggest takeaway for payment providers and operators is that there is an educational opportunity. When players experience the many benefits of wagering with a digital wallet, they almost certainly become one of their top payment preferences.

The last 20 years have seen wallets evolve into a popular payment method for sports betting. The future looks just as abundant for not just digital wallets but also the operators that add them to their cashiers – and, above all, their customers.

To learn more about the value of digital wallets for online sportsbooks in converting and retaining players, download All the ways players pay 2024.