What Are Payment Aggregators and Why They Lose Popularity in iGaming?
Payment solutions for gaming industry are evolving much faster than those for other businesses. The reason for this is significant budgets of gambling websites and serious volumes of payments. Even beginners in this business can generate substantial processing volumes within the first few months, something that e-commerce might expect only in the second year of operation. New payment solutions are emerging to address all the industry's needs.
In addition to own solutions, payment aggregation services, which combine multiple payment systems into a single technical solution for "one-stop" sales, once became increasingly popular. Previously, these services were in high demand, but now we are seeing a reverse trend. Discussing with clients and colleagues, we notice a negative attitude towards aggregation and even thoughts about developing internal systems for managing payments to avoid working with contractors.
Why has payment aggregator ceased to be a flagship service? Let’s see in detail.
What is Payment Aggregator
Payments and payment systems form the backbone of any business, especially in high-risk industries where quality acceptance is crucial. Constant failures and efficiency drop in payment methods lead to the need for new solutions. This requires a professional department and strong market research skills. Additionally, if a product already has a base of payment providers, managing it also requires expertise. This is where companies offering to meet this need emerged. The demand for an "all-in-one" solution literally created the principle of aggregation and led to the birth of payment orchestration platforms.
An aggregator is a payment partner that combines dozens, if not hundreds, of payment methods from various providers into a single integration. Since technical capabilities often become the weak point of many businesses, this option seems very advantageous and efficient. On one hand, aggregation offers several undeniable advantages:
Minimization of integration efforts. Often, only one major integration with the payment aggregator is needed, and you will immediately have access to all the methods on the platform. Adding new settings or making changes is always easier than starting from scratch, especially if you don't have your own development team.
No need to search for payment systems. Everything is already found for you, and you can be offered ready-made options without having to conduct a separate selection process.
Routing and cascading as basic settings. Developing your own logic for these processes can often be very challenging, especially for startups without experience. It increases the quality of payment acceptance by tens of percent.
In other words, the payment aggregator for iGaming has become a "one-stop shop" that provides everything needed for comfortable work with payments. Clients of such companies are either startups looking to reduce the payment load or large companies seeking to optimize payments in a single system and obtain quality analytics. In other words, the flow of clients for aggregators seems endless, as they have something to offer to any business. But in gaming, things turned out not to be so simple.
Reasons for Decline in Popularity of Aggregation
If we look at iGaming market in its current state, we can see that aggregator services have sharply declined and even evoke negative reactions. Why is this happening? Let's break it down.
Firstly, the abundance of similar services has created enormous competition in the market. We now see a lot of mass-market products that do not have real competitive advantages. Almost everyone who has 2-3 providers under their belt started calling themselves an aggregator. Essentially, reselling became more popular and very much noticeable.
Although this way of doing business is not inherently wrong, as we all sell something — services, goods, knowledge — clients began to doubt the real added value from aggregators. Now there are too many of them, and the range of services narrowed down to basic payment methods from well-known providers. The uniqueness and system approach disappeared, while the price of such services greatly increased.
Dependency on a single contractor also often provides a negative impression in the long run. Since it requires adapting to the speed and specifics of the partner's workflow. Technical stability and favorable prices are crucial, which cannot always be obtained from every aggregator. This same issue arises in White Label collaborations with gaming platforms, which we recently discussed in another article. Drawing a parallel with it, we can see several similar factors.
Today, even many startups are choosing to avoid collaborating with aggregators, as they are not willing to pay fixed commissions for connections and additional commissions on payment systems within. Based on our personal experience, when selecting payment systems for clients, many specify that they want direct collaboration and are not willing to integrate with an aggregator, as price and direct communication with real acquirer are important. Here, we are always ready to offer the most suitable option, as we only work with actual acquirers. Moreover, today, access to professionals in the payment field has become easier, and therefore, businesses often immediately focus on their own expertise and want to develop their own payment routing systems. Of course, not everyone succeeds, and statistical information is often lacking, but they try.
Although the idea of comprehensive services and all-in-one remains popular and in demand, modern payment companies need to develop uniqueness of their services and competitive advantages. Because attracting attention of clients is becoming increasingly difficult. If we talk about iGaming market in the CIS, not all standard advantages of payment aggregators can be applied here. The nuances of payment methods do not allow for outsourcing all tasks effectively. Summing up, the market is flooded with identical offers, but there is always room for new approaches and truly quality services.
