Payment methods remain an ever-important part of the iGaming experience. Today, we sit down with Matt Sahakian, CSO, Technamin and Dmitry Starostenkov, CEO, EvenBet Gaming to discuss the adoption of mobile and cryptocurrency payments, the role of each in the industry, and how emerging and developed markets are different in their adoption of payment solutions. Read our full conversation below.
What affects the level of uptake of alternative payment methods like mobile payment services and e-wallets – are certain markets more receptive to them than others?
Matt Sahakian: “I think it all boils down to convenience. That’s what technology is here for, right? To make things easier for us. Statistics clearly show that most people prefer to use their mobiles and have everything they need at their fingertips. This is certainly why mobile payment services are becoming more and more prevalent recently. E-wallets follow the same logic.
“If we look at things in the context of iGaming, we’ll see that our industry grows faster in terms of technological solutions that the current hardware can barely catch up to. It’s not surprising that alternative payment methods are tagging along.”
Dmitry Starostenkov: “There is a range of factors that impact the enthusiasm a given market will have in adopting new financial technologies. With the growing mobile penetration and lowering costs of mobile data and devices, fintech is becoming accessible to users who have limited access to traditional banking and more conservative online payment methods, specifically in the developing regions in Asia, Africa, and South America.
“They are also adopting faster in countries with younger populations. If we compare India or Brazil with any European country, we see a quite drastic difference.
“Finally, strict anti-money laundering and compliance policies might also be a reason for the slow progress of mobile fintech in more mature markets. The US is an interesting example here – although ‘Cash is King’ is a phrase that is commonly heard in relation to the States, given the country’s famously inflexible AML stance, it may well enhance its payments methodology dramatically before long.”
What opportunities does crypto present as a betting payment option?
MS: “Crypto is popular with gaming enthusiasts because of two main reasons: it’s lightning-fast, and it’s secure. That’s why most iGaming businesses nowadays are equipping their products and services with crypto-payment systems. When processing payments, cryptocurrency can offer greater flexibility than fiat casino payment options. Payments made with these currencies happen instantly because they don’t depend on intermediaries like banks. A similar situation applies to transfers. The lack of a middleman between the user and the operator results in increased efficiency and speed. At Technamin, we are firm believers in crypto and see these blockchain currencies as inseparable parts of our industry.”
DS: “It’s already widely used across all iGaming verticals. Many operators and payment processing providers allow a user to deposit and withdraw using different cryptocurrencies and wallets. In this case, there’s not much difference between conversion from any fiat currency other than being used by an operator. However, unpredictable volatility in the crypto market makes it a less desirable means of payment, so a player can’t expect a very attractive conversion rate.
“Another pain point in adoption tends to be a lack of understanding of the technology. However, online poker players tend to be a discerning demographic and are largely familiar with cryptocurrencies, with many already using Bitcoin.”
“In addition to that, we have seen more and more ideas for online poker projects based on decentralized technologies over the past year. These include using tokens, creating NFT-based bots, and using decentralized AI to enhance game mechanics. It’s only a matter of time before they gain traction and attract an audience that already trusts new technology as a result of the constant use of crypto and having a working understanding of blockchain.”
Are emerging markets more receptive to these methods than established markets, or less so?
MS: “Interestingly enough, in emerging markets, more people have access to online payment solutions than to actual banking accounts. This is partly why these markets are more receptive to these methods. E-wallets and online payment systems are much quicker than the banking systems either way and seeing how mobile-friendly emerging markets are, it’s a given that this would be the case.
“Another perspective that we need to look at is that iGaming has an educational function. These players are exposed to the latest online payment systems and become somewhat experts in the field. Many of them end up securing jobs in the IT sector because of this experience. Educating a new generation of online payment enthusiasts is the gift that the iGaming industry is providing emerging markets with.”
DS: “This is absolutely the case with mobile payments and e-wallets. As for crypto, the level of trust and adoption varies. There are a lot of variables for a market to be receptive to crypto: its legal status and regulation, the availability of trusted crypto trading services in the market, in addition to the obstacles facing mobile fintech in developing countries.
“In the case of Nigeria, people pay for food on the market with local crypto and its adoption level has exceeded 25 per cent. Meanwhile, in Mexico, those numbers are three to four times lower.
“It’s certainly an effective tool for developing countries that don’t have strong currencies, which often use the US dollar and, increasingly, cryptocurrency.”