Optimizing the payment experience for iGaming players as the market expands
2022 was a banner year for iGaming. The sector has undergone an expansion in North America and this trend is expected to continue in 2023. More broadly, the global regulated gambling market is projected to grow by $260.44 billion during 2023-2027, according to Research and Markets. With operators keen to continue their growth and expansion into more jurisdictions, enhancing the user experience becomes vital, especially as it relates to payments.
Major developments in the industry
2022 saw some major U.S. states like New York, Louisiana, Arkansas, Maryland and Kansas going live with online or mobile sports wagering. Most recently, Ohio went live earlier this month. Across the border in Canada, the province of Ontario launched an expanded sports-betting market for private operators last April, with the expectation that it would generate gross annual revenue north of C$1.8bn by 2026, rivalling major U.S. markets.
The incremental progress in these markets will almost certainly lead other highly populated and, therefore, game-changing states like Florida, Texas and California to reconsider their regulatory positions. Likewise, in Canada, the provinces of Quebec and British Columbia could perhaps consider emulating Ontario and launching their own private iGaming markets alongside their respective provincial lotteries.
In addition to these expansions, we have seen international operators enter the U.S. iGaming space. BlueBet, an Australian betting company listed on the ASX, launched its ClutchBet brand in Iowa last summer, with further plans to expand into other states.
Amid this growth, iGaming continues its transformation into mainstream entertainment for North American consumers. This means it is vital for operators to offer players their preferred payment methods in order to optimize their experience and increase customer retention. So, how can they do this?
1. Provide a broader spectrum of payment methods
The way players would like to pay has never been more diverse and to keep them engaged, operators must offer a range of payment methods, from card payments to alternative payment methods (APMs) like digital wallets and online cash solutions, or eCash, for players who prefer to use cash in their everyday lives.
The research we released in 2021 showed that when a card transaction is declined, almost three quarters (73%) of players would continue to attempt making a transaction by using a different payment method, such as a different credit or debit card, digital wallet, eCash solution, or even bank transfer. Only 19% of players leave the sportsbook to either stop betting altogether or bet on another platform. This suggests that offering a wide range of payment options improves the user experience for players, increasing customer retention and engagement.
Through Paysafe’s single API, operators can seamlessly integrate all the payment methods their players would like to use, such as our Skrill digital wallet and Paysafecash eCash solution plus third-party APMs; and we continue to add new payment methods to our API.
2. Accommodate faster deposit and payout times
As operators look to take a larger slice of the market, another key industry focus for this year will be responding to player demand for faster payments.
Our 2021 research revealed that U.S. players prioritize cashing out quickly over all other considerations – including odds, sports markets, and bonuses – when selecting a sportsbook brand. 75% said that receiving payouts quickly is the most important factor to them when deciding whether to open an account with an online sportsbook. One-third of players think payouts should be instantaneously credited to their account. 52% would be willing to pay a premium fee to receive their payouts quickly. Since there is high demand for cashing out rapidly, we can expect supporting faster payouts and even deposits by allowing instant transactions will increasingly become the industry norm.
3. Serve VIPs with a better experience
Supporting high-stakes or VIP players will also remain key in 2023. Our 2021 research indicated that VIP players prefer a wallet over all other payment methods. Therefore, it is essential to serve operators and their VIP player base with bespoke solutions. Operators that support higher deposit limits and actioning deposits anytime will gain the upper hand.
At Paysafe, we launched the Skrill VIP program for U.S. players, providing some of the industry’s highest limits for deposits. Furthermore, unlike a traditional bank wire transfer, sports bettors can deposit 24/7, including on weekends.
As operators look to expand further, it is inevitable that competition will intensify. Those who understand and respond to the demands of players will be more strongly positioned for the future. Therefore, it is paramount to provide players with a broad range of payment options, including those which allow them to make instant deposits whenever they want. Additionally, given the player acquisition and retention value of payouts, a seamless cashing-out experience will give operators an edge over the competition.