Alex Capurro, CEO of Easy Payment Gateway, says US gambling operators must look to alternative options to deliver a seamless payments journey for consumers.
Following the repeal of PASPA last month, and the growing number of US states pushing ahead with legal, regulated online gambling, the USA has quickly become one of the hottest emerging markets in the world.
From sports betting to casino and poker, the potential is certainly there for operators from both sides of the pond to cash in. Most have already thrashed out their battle plans, including key aspects such as platform, games and marketing.
But one area that requires particular attention is payments. It has the potential to cause serious headaches for those that are unaware of the challenges they will face; New Jersey is an example of just how growth-prohibitive payments issues can be.
The main challenge, of course, is that the major card issuers – Bank of America, Wells Fargo, Citi Bank, etc – do not permit transactions initiated by gambling operators, regardless of whether they are a land-based or online operation.
With a traditional payments gateway, operators are assigned a merchant category code from Visa and MasterCard that identifies the type of business they are – for sportsbook, casino and poker operators it is usually 7801.
When a deposit is made, this code is run through a list of prohibited codes and if there is a match, the transaction is declined.
This has hit New Jersey operators hard – debit and credit cards are among the most popular and trusted payment methods in most markets but only a fraction are getting through in the Garden State.
The obvious answer is to offer consumers alternative methods of depositing and withdrawing. In mature markets it is often the case that players have a range of payment options, from eWallets to pre-paid cards via bank transfers and even cryptocurrencies.
When it comes to eWallets, Skrill and Neteller are among the most popular with consumers. They are easy to use, and offer rapid transaction times whether depositing or withdrawing. In addition, they super simple to integrate into platforms and payment gateways.
Another option is a pre-paid voucher such as Paysafecard. Users purchase the voucher with cash or via a debit/credit card; the voucher contains a pin code that is then entered via the operator’s payment gateway – the value of the voucher is then credited to their account.
The issue, however, is that consumers – especially in markets where online gambling is new or has only just been regulated – often lack trust in these alternative payment methods. And this is certainly true when it comes to them being used to crediting online gambling accounts.
Close the Loop & Build Trust:
The solution is to offer a pre-paid card to consumers. Some payment merchants provide their clients (online gambling operators) with a customised pre-paid card solution that their players can use to deposit into their online wagering account.
These branded cards deliver a customised and closed-loop payment experience that facilitates both deposits and withdrawals.
They also help provide a 360-degree experience to customers; the cards can be used in the land-based casino and online, and for purchasing food, drinks, etc as well as withdrawing winnings from their wagering wallet.
Of course, operators will need to advertise pre-paid solutions to their players, and even offer incentives for using them such as cashback and bonuses. It’s worth the outlay, however, as pre-paid cards are the most effective way of engaging new online players and building trust.
Change Takes Time:
Given the scale and scope of the US market when it comes to sports betting and online gambling, it is only a matter of time before the major card issuers begin accepting transactions from gambling companies.
To expedite this procedure, they will want to see states deploy comprehensive regulations that require operators to be compliant with the most stringent rules and requirements when it comes to KYC, anti-money laundering and fraud.
This will happen over time, but in the interim operators will have to look to alternative payment options to ensure their players can deposit and withdraw, and that they are offered a seamless payments journey.
Alex Capurro – CEO – Easy Payment Gateway