The state of igaming payments processing is pitiful. When bettors make deposits or withdrawals, they often get redirected to other sites to complete their transactions. Bettors may have to log in again, which adds steps to the deposit process. Many bettors discover that their desired deposit method isn’t accepted until the end of the transaction too. Any one of these problems can discourage a bettor from making a successful deposit. But taken together, online sportsbooks and casinos pay a high price for a patchwork of deposit and withdrawal options.
However, PayNearMe has announced a new platform, MoneyLine, which addresses these problems. MoneyLine is designed to keep bettors from switching between sites when they make deposits. It also tells bettors which deposit methods a sportsbook will reject ahead of time, simplifying deposit choices. But most importantly, it will show igaming operators important customer data that will show them how to improve customer experiences.
We spoke with PayNearMe CRO, Mike Kaplan, to understand the state of igaming payment processing, why it’s important to bettors, and how the industry is expected to evolve.
The State Of iGaming Payments Processing
When the internet was first created, it went through phases called Web 1.0, 2.0, and 3.0. Each phase ushered in new features that made the internet easier to navigate and more useful. iGaming payment processing is going through a similar evolution.
“Payments 1.0 is simply the ability to process a card-not-present payment online,” said PayNearMe CRO, Mike Kaplan. “It’s the way we initially did e-commerce payments. And then 2.0 is added value and customer journeys.”
So, payment processing went from just entering credit card information to a more integrated approach that bettors would recognize today. It’s going from making clunky payments to going through smooth checkout processes. However, payment processing is entering a new evolutionary stage that MoneyLine is leading the way into.
“3.0 has really been the invention of purpose-built platforms to service specific industries,” said Kaplan. “You think of players like Stripe that have done that. And that’s the approach that we’re taking—frankly that we’ve taken in general—in all of the markets we’ve gone into. This 3.0 approach is heavily based in data and the use of data to drive better customer journeys and ultimately reduce the cost of accepting payments.”
Why iGaming Payments Need Innovation
Most tech companies have spent a lot of time and talent making their apps seamless for customers. However, igaming payments haven’t come close to matching that standard.
“In the gaming space, payments are essentially broken,” said Kaplan. “You know that the deposit and payout experience is [an] unreliable clunky payment experience that results in much lower conversion rates, player churn, abandonment, and ultimately high operator costs.”
When bettors give up on making deposits, online sportsbooks and casinos miss out on revenue. When bettors wait too long for withdrawals, they may accuse legitimate companies of scamming them. That scares potential customers off, costing igaming companies even more revenue. So, making deposits and withdrawals easy for bettors is an urgent task for online sportsbooks and casinos.
The Problems MoneyLine Solves
The igaming industry faces unique challenges. Gambling is one of the most heavily regulated industries in the United States. (Even marijuana dispensaries don’t have hard limits on how many of them can be built in a legal state.) Gambling companies also have to grapple with the bad reputation that 1920s gangsters gave them. That reputation is the main reason that igaming payments are such a messy patchwork of companies. So, the simplicity that MoneyLine brings to deposits and payouts is a critical innovation.
“We have consolidated the most popular payout methods in the industry in a single platform with a consistent look and feel,” said Kaplan. “So the player doesn’t feel like they’re being redirected to a different site every time they use a different payment option.”
When someone shops on a website like Amazon, checking out is slick and easy. Customers enter their delivery and payment information on screens that look the same on the same website. Depositing at a sportsbook is not that smooth. Multiple redirects and rejected payment methods are unusual in modern apps. But MoneyLine modernizes igaming payment processes to bring online sportsbooks and casinos into Payments 3.0.
PayNearMe’s Place In The Patchwork
Because of gambling’s bad reputation, many specialized payment companies emerged to solve specific deposit and withdrawal problems. Once upon a time, PayNearMe was one of those narrowly specialized companies.
“Our cash-at-retail solution was one of those point solutions that solve a very specific problem surrounding reliability and privacy,” said Kaplan. “But when you integrate those different point solutions alongside of each other, you wind up with this very disjointed customer experience. Because you’d frankly integrated five or six different payment providers that all have their own requirements and necessities and flows that they need to satisfy for their KYC rules or their particular risk and fraud rules.”
Getting different payment methods into one place is a novel achievement for a payment processing company in the gambling industry. This will be a dramatic move for payment processing. It’ll make online sportsbooks and casinos easier to use and eliminate some of the biggest friction points for bettors. However, MoneyLine also has an important feature that will save money for igaming companies.
Reducing Costs Further Through Automation
MoneyLine will allow operators to create rules that automatically process withdrawals. That means bettors could get their withdrawals in seconds instead of days. Not only is that a massive benefit for bettors. It’s also a major cost-saver for igaming companies.
“We use this exact same technology in our lending market to significantly increase self-service and reduce calls into a call center,” said Kaplan. “Because the most expensive payment you can take is one over the phone. Forget about the cost of the payment, because you’ve got to talk to a live human being.”
Live human beings have to be paid. So, the more people manually approving payouts, the more igaming companies have to pay. Processing withdrawals is still a manual process for many igaming companies. Real people have to go through real checklists to send winnings to bettors. That’s why it takes days to process withdrawals.
Automating any part of the withdrawal approval process would allow igaming companies to reduce the staff needed to approve withdrawals. iGaming companies would save money on salaries, benefits, and 401k matches. Backend automation would have the same cost-saving effect on sportsbooks that it would on call centers. With MoneyLine’s rollout, PayNearMe can offer those same benefits to igaming companies.
How PayNearMe Envisions The Payment Processing Industry’s Future
Although PayNearMe’s new MoneyLine platform is exciting, focusing on this product alone misses an important emerging trend. PayNearMe isn’t the only company that is entering the 3.0 stage of payment processing’s evolution. So, other payment processing companies will likely develop platforms that offer similar benefits. However, PayNearMe’s vision for payment processing is unique. It plans to blur the line between online accounts and offline wallets.
“Why should I not be able to use the $1,500 sitting in my sports betting account when I walk into a casino and vice versa?” said Kaplan. “I was just at the casino at one of those sportsbooks, and I just went out to the pool and I want to continue to bet while I sit at the pool. Why should I not be able to do that seamlessly as a player? That’s ultimately where I believe the market goes. This [MoneyLine] is the first product that helps enable that.”
One of MoneyLine’s features gives bettors a barcode that can be scanned at a cash cage to withdraw real money from virtual accounts. That adds convenience for bettors who place wagers online, win, and want cash in their hands instead of a withdrawal in their notifications. It’s yet another way to make igaming payments a modern streamlined process.
It’s been easy to accept subpar deposit and withdrawal processes from the igaming industry. iGaming’s national expansion makes it easy to forgive design flaws. No consumer would accept the current state of deposits and withdrawals from any other industry. Amazon wouldn’t allow its payment processes to be disjointed, difficult, or frustrating. But PayNearMe is taking a big step toward modernizing online sportsbooks and casinos with the release of its MoneyLine platform.
Bettors should be able to breeze through deposits and withdrawals without realizing how many moving parts make those payments possible. Logistical challenges shouldn’t distract bettors from an igaming company’s products. MoneyLine could go a long way toward achieving that high design standard. And if MoneyLine is as seamless as PayNearMe executives claim, bettors should enjoy the platform’s benefits without ever noticing the platform is there.