When placing a bet, whether it’s on slots, roulette or who will become the next England manager, a lot is going on in the background that customers don’t see. Hopefully, if everything works correctly, a deposit can be made and a bet can be placed.
This is why the role of Payment Service Providers (PSPs) cannot be overstated. These firms are the backbone of financial transactions, one of the most important aspects of the operator-customer relationship, with various emerging payment technologies also playing a role in redefining this relationship.
A true balancing act
Given the critical role of PSPs, expertise is needed in managing them. Sean Spiteri, Head of Payments Solutions at PressEnter Group, shared his views on payments in the B2B and B2C spheres with Payment Expert.
Spiteri has occupied pivotal roles within the industry and currently manages all relationships with PSPs, ensuring approval ratios and overseeing configurations during onboarding processes. At PressEnter, he handles the entire range of payment solutions, which he describes as “the full shebang”, including both B2C and B2B perspectives.
Understanding the nuances between regulated and unregulated markets is crucial in the dynamic landscape of payment solutions, Spiteri emphasises. Both regulated and unregulated sectors present unique challenges to operators.
Starting with regulated markets, he advises: “You need to be on top of your game.” This comes from the emergence of new PSPs all the time, which is happening at a rapid pace.
This fast-changing environment forces operators to adapt for the need of a plan B. “You must have a contingency plan, especially for the PSPs and the markets that are most important for the company, Spiteri adds.
At the same time, to stay on top of emerging PSPs, it is also important to keep an eye on regulatory changes, with every regulatory body having its own rules and regulations.
“You really need to be on top of your game in terms of understanding how you can use certain functionalities and what is frowned upon by the different regulators.”
When envisioning Spiteri’s role, it’s comparable to the challenge of balancing multiple spinning plates, although in this case, the plates are crucial for the smooth operation of the business. Selecting the right PSPs is vital to striking a fine balance and ensuring the company is generating money.
However, it’s essential that profits are generated through wise choices in performance, rather than merely opting for the cheapest option.
Spiteri says, “One of the common mistakes that I’ve seen in my career is a lot of emphasis on the pricing of the specific payment solution that you’re looking for.” He explains that pricing is obviously important but states, “at the end of the day, there are a lot of different factors that you need to look out for.”
How tech is shaping payments
Moving away from the present and looking towards the future, emerging technologies are poised to disrupt the payments landscape in the betting industry.
Chief among these are artificial intelligence (AI) and blockchain, two technologies that are currently being used to revolutionise the sector – although as Spiteri rightly points out AI is fairly new to the space from a payment process stance.
Despite its comparatively recent emergence among payments, AI’s potential in the realm of finance has not gone unnoticed. The gaming sector is paying close attention and is making use of the tech in some cases.
Responsible gaming is a notable area AI is being used heavily in. The tech can be used to scan through vast tracts of customer data to detect signs of problem gambling – but is this capability being used to its full potential in payments?
In Spitteri’s view, not quite. “I don’t see that we’re utilising it in the best way, there’s so much potential behind it,” he tells Payment Expert.
This is not to say that the technology is having no impact on gaming’s approach to payments. One of these implementations is for transaction routing, with AI offering real-time recommendations in terms of which BIN should be routed to which PSP based on performance.
AI also supports fraud prevention as it continues to be a pressing matter, a constant cat and mouse fight between good and bad actors. Leveraging AI’s processing power of large data sets, it can be used to identify suspicious behaviour, although as many experts emphasise, conclusive decisions need to be made by a human.
Turning to blockchain, there are several benefits this technology offers operators, such as enhanced speed of transactions at cheaper costs. This is due to blockchain transactions not being dependent on any third-party intermediary, meaning that the costs of withdrawals and deposits are much lower than with any fiat currency. Privacy is another significant point, as players can remain anonymous due to being identifiable by keys rather than names.
However, there are significant hurdles in gaming’s way with blockchain adoption, both technological and regulatory. In Spiteri’s experience, the sector as a whole has struggled with converting players who are familiar with fiat to crypto.
“From my experience on casinos that have a kind of a hybrid setup in terms of having both fiat solutions and crypto solutions in tandem on the cache. I’ve never seen conversion specifically for crypto takeoff.”
Spiteri likens this idea to learning a language, observing an educational gap. “Let’s say I’m trying to learn Spanish, but every time I speak in Spanish, whoever I’m speaking to, they’re replying in English.
“So learning Spanish this way would be incredibly difficult. Whereas if I’m being spoken to back in Spanish, this is forcing me to learn the language and it will incentivise me to learn it.”
Finally, when talking about the potential of different payment technologies to the igaming sector, it is impossible not to mention Open Banking. Comparisons can be drawn here to the above observations around PSPs, and the importance of operators working with these companies.
With more and more financial firms driving Open Banking development and adoption forward, operators must recognise this opportunity and ensure the right partners are found.
“I would say Open Banking is one of those solutions that we need to keep a lookout for,” says Spitteri. He continues: “I’m quite positive that Open Banking will grow exponentially in the coming months and years.”
Open Banking has the potential to improve the player protection and KYC processes of operators due to the amount of data shared between banks. However, the feature that makes it so useful to operators is one reason that is standing in the way of its adoption.
Customers are often reluctant to share data with third-parties, for one thing. Operators have a job on their hands to educate customers and will need to put a lot of thought into finding the right Open Banking partners – ones which can be trusted by both bookmakers and bettors.
The significance of payments and payments providers cannot be taken for granted. As the gambling industry expands and competition becomes more fierce, driven by technological advancements, the need for seamless secure and efficient payment solutions becomes ever more paramount.
Recently, Spiteri shared insights from his career and valuable advice for aspiring payments professionals in the latest SBC Leaders Magazine. Click here to read more.