iGaming payment options diversity and main features
Gaming industry constitutes a significant segment of online commerce and, as a result, stimulates development of international online payments. There are payment systems specifically designed for online casinos and gaming projects that offer services exclusively to this industry. At the same time, other players in the fintech market, although not specifically targeting gaming industry, intersect with it because iGaming sites strive to offer their users advanced payment options they develop.
However, before integrating various payment options, it is essential to understand their nature, differences and algorithms, as well as pros and cons for users. Our service can help you with all of this. Monoup is an encyclopedia of knowledge about payment systems and payment habits in the world. On our website, you can find detailed reviews of payment methods, author’s articles, and interviews with fintech and gaming leaders.
Today, we will discuss the most popular types of payment methods for gaming websites and how they work and differ from each other.
E-Wallets
The most widespread payment method for international iGaming websites is electronic wallets. Wallet represents a separate ecosystem that stores balances and allows transactions for deposits, withdrawals, and payments between wallet owners. Examples of such systems include Jeton, Astropay, Venmo, and PayPal. The wallet usually provides an application or a web version of its system where the user can fully manage their funds. Why has this become popular for gaming sites?
The answer is simple — anonymity. Although a wallet is registered under a real name and requires a KYC procedure, it does not disclose card or other personal data of its clients to other wallet owners. In a wallet, you can have a nickname, account number, or another identifier, such as email address. Thus, when making a payment on an online casino website, client will not compromise their card data (if they are concerned about security) but only their email or wallet ID. The electronic wallet acts as an intermediary and stores personal data securely. A significant drawback of using electronic wallets is fees they charge. Usually, fees are quite high and accompany all payments: wallet top-ups, withdrawals, and transfers within the wallet ecosystem. Additionally, there may currency exchange take place or even lending. However, despite the relative expensiveness of payment method for all participants, convenience and security of the process attract many users and almost every player owns an e-wallet.
International payment system credit cards
The second most popular payment method on gambling sites is credit and debit cards from payment networks like Visa, Mastercard, UnionPay, American Express, and others. In countries where the majority of population has a bank account, this is the most preferred and convenient payment method. Instant processing, low fees for the payer (and often no fees at all), and widespread use have been decisive factors.
At the same time, the situation for merchants is somewhat different. Card processing, despite its convenience, is one of the most expensive payment methods for businesses and carries several financial risks. These include the risk of payment with someone else's card and subsequent chargebacks. It is not uncommon for fraudsters to attempt a stolen card on an online casino site, seeking to cash out funds and avoid punishment. If not monitored, losses from such cases can amount to significant sums and also damage the reputation. Additionally, dishonest users can pose significant financial risks. There is a category of players who make illegitimate chargebacks in every casino, and there are few means to combat them, especially if the casino is licensed in Curacao or Anjouan.
Otherwise, credit cards are an excellent payment method that is convenient for many users, and in some countries, it is indispensable.
Cryptocurrency
Once considered a temporary phenomenon and an unreliable project, cryptocurrency is now a full-fledged payment method. Despite resistance from the traditional financial system, cryptocurrencies have managed to gain followers among users and move beyond being just an investment tool to become a payment method.
The most popular cryptocurrencies for payments on iGaming sites are Bitcoin, Ethereum, Tether, Litecoin, and Dogecoin. Smaller coins like Ripple and Toncoin are also frequently used by players for deposits. The convenience and real anonymity of payments have led to the existence of entire crypto-casinos where only cryptocurrency is accepted for payments.
At the same time, many countries actively oppose the anonymity and decentralization of cryptocurrencies and try to regulate their operation, license their creators, and monitor all payments. For example, the prominent European MiCA regulations, which led to the ban of the USDT (Tether) currency in the EU, significantly affected users, forcing them to switch to alternative stablecoins.
Vouchers
A less popular and somewhat outdated payment method, vouchers still have a place in online casino payments. A voucher is a prepaid gift card that can be topped up to a certain amount and used at a point of sale. For example, an Amazon gift card is an example of a voucher, but in iGaming, Flexepin and local options are more commonly used.
The player purchases a voucher on a third-party website and receives a code or another identifier for their voucher. On the merchant's site (in this case, a gaming website), you can find a special window where the code must be entered, and the funds will be credited to game balance, thus voucher will be redeemed. Behind the scenes of this payment method, there is cooperation between voucher operator and online casino itself, where they transfer funds between each other.
This payment method was previously widely used but has become less relevant with the advent of more convenient options in the online payment market. This was mainly due to resistant need to purchase a voucher on a separate resource or even in a physical store, which is an additional step for users. Additionally, the fact that a voucher can only be purchased for a specific exact amount and, once used, cannot be topped up again, played its role. Moreover, payment method only works for deposits and cannot receive incoming payments, as it does not hold a balance. Therefore, winnings from gaming site will still need to be withdrawn to another payment method, and players prefer to use one convenient option for all transactions connected to their gaming experience.
Mobile Payments
Payment from a mobile phone account is particularly valued in certain countries and regions. For example, in Africa, this payment method gained the most popularity due to a long period for majority of the population being unbanked. Mobile operators became not only a tool for receiving communication services but also the only source of financial services. Through a mobile operator, one could top up utility bills, purchase online services, and pay for some purchases. Mobile operator M-PESA in Kenya is still one of the most used payment methods, despite the increased share of credit card transactions. This operator has also entered the markets of other African countries and helps make fast and low-cost international payments.
Another example of mobile payments nation is Kazakhstan. In the country, transfers from mobile accounts are very developed, and providers such as Kcell, Altel, and Beeline dominate the country. The nature of mobile payment is simple: funds for a purchase are debited directly from the mobile phone balance. It can also receive incoming payments. Therefore, mobile payments are well-suited for use on iGaming sites. You can make a deposit and also receive winnings to same account. The payment is usually instant and secured by an SMS message, allowing you to ensure that it is being made by owner of mobile number at that particular moment. At the same time, this payment method is suitable for small payments but can cause difficulties with large transactions, as you cannot top up the mobile balance to very large amounts.
Bank Transfers
Transfers from account to account are considered as basic payment method in most countries of the world. Using transfers for deposits on gaming websites, however, is not as common as other types of payments. The reason is that such a payment can take more time, especially if it is international. SEPA transfers within Europe used to take several hours, which negatively affects gaming experience of the user and does not allow them to quickly start using the iGaming website. Modern instant transfers eliminate this problem, but the complexity of overall procedure remains. A SWIFT payment can take from two to five days. Additionally, both types of payments require more complex mechanics, such as entering full payment information: account number in IBAN format, full recipient details, payment purpose, and other data. All this leads to a direct decrease in convenience of payment and, consequently, approval ratio of payments.
This is why e-commerce very rarely use bank transfers as the main payment method and prefer more simple and user-friendly interfaces. At the same time, transfers within one country in a more convenient format may be popular, depending on the region. This means that before entering any market, it is important to study all the nuances and habits of payers to prepare with necessary set of payment methods.
All these categories of payment systems and methods are used to a greater or lesser extent on iGaming websites. The reason for this diversity lies in the audience, which is no less diverse and varies greatly from country to country. By analyzing payment habits in different countries, one can clearly see that difference in user preferences is enormous, and this is reflected in products developed for them. iGaming industry usually focus on engaging and bright content, and payment systems in this regard are often set to the background. We at Monoup believe that payment experience is an integral part of the overall user experience and therefore requires no less careful attention.
