Kristian Gjerding is a serial entrepreneur and business strategist. He held leadership positions at Network Appliance and Sun Microsystems before co-founding CellPoint. His role is both inspirational and operational: sharing his vision and keeping us all on track and growing (fast) in the right direction.
Since the Covid-19 pandemic outbreak, gaming operators have seen increasing restrictions on online payments. Kristian Gjerding, CEO and Co-Founder of CellPoint Digital, a global fintech provider, explains in this guest column for Yogonet why they should design their payments network to accept any alternative payment methods (APMs) in order to enter global markets, drive revenues and successfully engage players. With this aim, the expert introduces and analyzes the concept of payment orchestration platforms.
The pandemic saw a rise in the number of consumers taking advantage of digital technology. Digital payments were already growing popular but as shopping moved exclusively online, options like cash and tap payments became unavailable and so the population was forced to adopt something new. The same can be applied to the online gambling space. As casino’s and gambling halls were forced to close, players flocked to online gaming websites and software to continue their hobby. Adoption of digital was at an all-time high.
Unfortunately for the iGaming and sports betting industry and its players, regulations have placed restrictions on the form of payments players are allowed to use. For example, credit cards were capped so that more addicted players would be unable to play on borrowed money that they could not pay back. These limitations are not universal either, with some countries outright banning the use of certain payment methods. For gaming operators, navigating these regulations to enable play can be a nightmare.
With that said, there are still a lot of alternative payment methods (APMs) out there that players can use and so in order to not lose any customers, gaming operators must ensure their payments network is designed to accept any APM. If they are unable to, they risk creating friction with customers and can lose out on potential profits, inhibiting any growth / expansion plans the company may have.
There are several options for APMs in the world, from card or cash-based wallets to mobile payments, to pre-paid cards. In 2019 it was believed that over half of all global eCommerce payments were made with APMs and in the Europe alone, 80% of shoppers shared that they would prefer to pay with digital payments instead of typical debit or credit card payments.
If we look forward to the future of payments as well, we can also see that APMs are becoming even more prominent. Across the Asia-Pacific (APAC) region, a report showed that 94% of consumers are willing to use APMs in 2022 and within the Middle East and North Africa (MENA), digital wallets are on their way to become the primary form of payment. Even Latin America regions are seeing an increase in financial options, with 55% of the population now banked and APMs steadily becoming more options.
As we can see from these statistics, APMs absolutely cannot go ignored. Consumers are moving towards APMs in ever increasing numbers. For gaming operators with aspirations of growing their business, developing an APM strategy is now crucial for penetrating global markets, driving revenues and keeping players happy.
The problem for gaming operators is, with all these different payment methods, some more popular in specific regions than others, and with a gauntlet of contrasting international regulations to navigate, implementing and managing all these methods can be incredibly difficult. But with Payment Orchestration, this complexity becomes much simpler.
According to PYMNTs, the global market for payment orchestration platforms is expected to grow 20% every year between 2021 and 2026. With each new merchant implementing the technology, consumers across the globe have a new place to spend their money in whichever way suits them best.
For gaming operators, the platforms provide a single interface through which all transactions between themselves, their customers, and their payment providers are initiated, directed, and validated. The agility this confers to gaming operators who would otherwise need to manually integrate new APM options - resulting in protracted time-to-market and decreased competitiveness - is considerable.
Another benefit of this is how it simplifies monitoring the performance of multiple, manually integrated, and siloed payment methods. Payment Orchestration intercepts by automatically aggregating and processing these crucial data streams and providing gaming operators with valuable, real-time analytics that save time, prevent human error, and aid in decision making.
This speed to market coupled with comprehensive real-time reporting allows gaming operators to begin increasing revenues in the short-term and make better decisions to facilitate growth in the long-term. However, the opportunities to enhance cash flows don’t stop there.
When a gaming operator relies on a single acquirer/PSP it is they who have ultimate control over transaction flows. For example, if the PSP succumbs to an outage, the gaming operator is subsequently and directly impacted. Likewise, if the PSP routes transactions to a specific acquirer, the gaming operator can do little if the costs they incur from this acquirer are unfavourable to them. A payment orchestration provider redresses this imbalance by transferring control of the transaction flow back to the gaming operator by allowing them to create real-time rules for switching transactions and offering APMs to consumers. This dynamic routing improves the success of processing rates, gives customers more payment options, and means failed transactions can be re-routed to the next acquirer leading to fewer lost sales.
Collectively, these various payment orchestration features and functionalities both unleash the potential of APMs and provide gaming operators with the speed and flexibility to drive revenues to ambition-exceeding levels.
By plugging directly into an existing core or eCommerce system, payment orchestration platform providers allow gaming operators to develop a growing payment ecosystem where the best suited partners are easily picked and added. This means online transactions will be fully optimised to accept a full suite of APMs, allowing for opportunities for growth to quickly multiply.
With the knowledge that consumers can pay using whichever APM they prefer, gaming operators no longer need to worry about the platform their games are available on, whether it be digital or not. This allows gaming operators to target specific regions by demonstrating their ability to accept the most popular APMs consumers in that region, in turn allowing players to play the games they want.
APMs enabled by payment orchestration add an agility and dynamism to today’s gaming operators that allow them – for the first time – to give consumers whatever payment method they want, wherever they are. As adoption of APMs continues to rise, this capability will only become more essential for gaming operators, and any merchant company, looking to find success on a global scale.