iGaming operators strategically offer a myriad of payment methods, meticulously tailored to the diverse needs and habits of their customers. In this exploration, we’ll ride the waves of existing payment methods, particularly focusing on the Blockchain and crypto growing in popularity in the niche. We’ll highlight some trends and possible payment solutions in the future.
Payment methods
As we said, in the realm of online gambling, operators provide a diverse array of payment methods tailored to the needs and habits of their customers. Let’s surf through the existing payment methods and see what options are available today:
- Debit and credit cards, conventional and widely utilized, facilitate the transfer of funds directly linked to users’ bank accounts or credit lines. Cards stand out as the predominant online payment method across various GEOs, including Brazil, the USA, India, Mexico, the UK, Canada, Japan, and Turkey.
- Digital wallets have become a pervasive force in online gambling, renowned for their swiftness and security (take, for instance, the widely embraced PayPal). Digital wallets empower players to fund their accounts without directly exposing confidential bank details. Furthermore, their adaptability, particularly in terms of multi-currency support, renders them appealing to international players.
- Direct debit offers players a convenient method to pay for iGaming, enabling the gaming platform to automatically withdraw funds from their bank accounts without the need for manual transactions every time.
- Bank transfers stand out as a secure method for transferring money, even though they may take longer compared to faster alternatives. This method caters to individuals who prefer traditional banking approaches over digital wallets or card payments.
- Buy Now, Pay Later (BNPL) services empower users to make deposits and settle payments in convenient installments, offering flexibility with minimal upfront costs. The integration of BNPL services into an iGaming platform’s payment system reflects an understanding of contemporary user habits.
- Mobile payment solutions like Apple Pay and Google Pay add unparalleled convenience to the iGaming experience. Players can effortlessly input their bank account or card details into the mobile wallet app.
- Blockchain technology and cryptocurrencies are relatively new, but already well-established options for payments in online gambling. Today, we see how these technologies are reshaping the landscape of the iGaming industry. So let’s take a closer look at them.
Crypto trends in iGaming
Cryptocurrencies present a decentralized, secure, and transparent payment solution, effectively addressing numerous challenges encountered by gambling platforms. It’s evident that they are steadily gaining popularity in the realm of the niche.
Softswiss data illuminates a remarkable surge in cryptocurrency bets, showcasing a substantial increase from nearly $3 billion in the first quarter of 2021 to an astonishing $6 billion in the first quarter of 2022, marking a remarkable 116% growth.
A majority of users gravitate towards well-established cryptocurrencies, with Bitcoin standing out as the dominant choice in the gaming landscape.
Delving into user deposit patterns on the Softswiss platform, Kaminari discovered some interesting insights. Almost 79% of customers prefer depositing modest amounts, ranging from $10 to $50, while an overwhelming 99.7% of casino customers opt for deposits below $500. In stark contrast, a mere 0.03% of customers make more substantial deposits exceeding $1,000.
As the demand for crypto-payments continues to rise, the need for fast and cost-effective transactions becomes increasingly crucial. Imagine: making a deposit in BTC on-chain for amounts up to $50 currently incurs a transaction fee of approximately $10, with an average waiting time of around half an hour.
So, in the case of Bitcoin, the potential transition to the Lightning Network emerges as a game-changer, offering online casino users faster transaction speeds and cost savings for both deposits and withdrawals.
Lightning Network
The Lightning Network (LN) is the primary Layer 2 (L2) project for the Bitcoin blockchain. It enables instantaneous transfers (up to 2 seconds). This speed surpasses traditional Visa or Mastercard payments, and the associated network fee is approximately 4 cents. As of the end of May 2022, the total capacity of LN channels reached 3900 BTC.
The primary role of LN is to facilitate direct exchanges among bitcoin holders without recording information in the primary blockchain. To achieve this, users initiate a specialized channel with a single on-chain transaction and deposit bitcoins into it.
Once activated, the payment channel enables off-chain transfers — transactions outside the main network. In contrast to on-chain transactions, those conducted within Lightning Network channels remain visible solely to the involved parties. Only the initial and final states of transactions are recorded in the main blockchain. So there is a substantial breakthrough in user flow and experience on the horizon.
Final thoughts
Crypto technologies are ceaselessly advancing, and the iGaming niche is adeptly adapting, nearly spearheading the charge. What the near future holds for us, as the pace of change is remarkably swift? Will cryptocurrency have the potential to supersede all other payment methods, or is it merely a matter of time? It’s undeniably intriguing!
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