Following his appearance at the second Payment Expert Forum, we caught up with Simon Dorsen (director of gaming at fintech specialists OKTO) to talk payments innovation, industry disruption and the revitalisation of retail betting.
First of all a prediction – if you had to choose one type of payments tech that will undoubtedly disrupt the gaming ecosystem, what would it be and why?
Dorsen joined OKTO in June 2019.
SD: While there’s plenty of disruption coming to the gaming ecosystem, when it comes to payments tech, there’s one fundamental element that will standout; the digital wallet.
As ever with payments, innovation is driven by offering improved convenience and speed.
Digital wallets, including ours, are dedicated to reducing friction in payments, as well as accessing funds whenever and wherever players want them.
Allowing bets to be placed through any chosen channel via one singular payment system is the future and the key to allowing winnings to be paid out fast, while adhering to compliance.
Not only does this address the player’s need for instant gratification but also provides a serious competitive advantage for operators.
Fast payouts build brand trust with the player, driving repeat betting, visitation and deposit ratios.
We’re already seeing this adoption in real-time. Players and customers alike are already conducting their lives via mobile, and retail betting will be no different. Mobile transactions already account for 54% of digital payments in Europe and are growing globally by 10%.
Why is having the ability to offer an omni-channel payment experience so important?
SD: The omni-channel customer segment is now well-established in most markets, and the multi-channel operator needs to proactively address the omni-channel user experience, as well as optimise the player engagement and retention of this valuable segment.
This is a key part of our offering, and we enable funds to move at the same pace as the customer across multiple channels with zero friction.
However, omni-channel does have its limitations. No matter what alternative operators offer, many demographics will already be happy with their preferred gaming channel.
Whether that be for online, in-shop or in the digitised middle ground, operators need to focus on the unique needs of each of these player segments. From strategies that address multiple segments to payments services that are flexible and appealing to each, we’re here to help.
In what ways could retail betting utilise payments technology?
SD: When it comes to the future of retail betting, I am very optimistic. We’re already seeing change happening in real-time, with many of the more forward-looking operators revamping and modernising their shops with a focus on the latest in customer experience.
But it doesn’t stop there, plenty of suppliers have exciting plans in the pipeline, including tablet-based solutions that allow for the futuristic ‘Apple store’ self-service shop experience that we expect to see becoming mainstream in 2020.
UK bookmakers have already suggested that a number of their stores could disappear from the high street, with William Hill estimating 700 shops could close, and GVC predicting a figure of 900.
(Source SBC News)
This digitised, in-store convenience is set to be a major part of retail’s re-vitalisation and cashless payments will be a key part to making this experience work. Payments technology will not only make the self-service experience fast and paperless, but also intelligent.
As well as giving players the freedom to enjoy the experience more by making bets faster, it will also ensure that players receive bet notifications and their winnings fast and be ready to place another bet.
With more countries beginning to open their doors to sports betting, can the industry keep up with such high levels of activity?
SD: I’m sure the industry can keep up – but with the regulatory and technology velocity of change increasing, partnerships will become increasingly important to keep up!
The importance of paying attention to regulatory hurdles should never be underestimated by operators.
With a market as diverse as Europe is, both in terms of customer preferences and different regulatory climates, the key is having a payment system that is interoperable across channels, flexible to different environments and responsive to change.
Separate licenses for online and retail that limit movement of funds between the channels can be challenging. This is where licensed third-party providers such as us come in.
By bringing in an already regulatory solution, you’re good to go with a ready-made provider that already has regulatory approval.
What makes a particular emerging market more difficult/easier than another?
SD: In general, I would say that emerging markets can be easier for operators to enter as there is often limited legacy to overcome.
Many emerging markets, such as Africa, went directly to mobile which means it can be far faster to integrate the latest in tech innovation – compared to traditional markets with legacy regulations and stubborn mindsets, it becomes far easier to move fast and scale up.
However, operating across multiple markets (whether emerging or traditional) brings challenges for operators needing to find the right balance between standardisation and localisation.
Delivering a payments journey that is fully compliant with the disjointed patchwork of regulatory frameworks in place is no easy task. Standalone tech is not enough to solve this.
If PSPs are to fill this gap, they need the relevant licenses to provide an end-to-end service which allows partners to ensure they are fully compliant with local anti-money laundering, data protection and gaming laws.
How do you see sportsbook digital payment systems advancing?
SD: When it comes to sportsbook, betting is very much time-critical, whether that be for in-play or a myriad of other betting options.
This trend is set to accelerate as players become more and more accustomed to the instantaneous convenience that technology can deliver.
Digital wallets will be key to this increasing need for fast delivery. Not only because they can operate in real-time when integrated, but also in eliminating delays when it comes to payments, which is vital.
Our aim is to ensure that the time spent processing a transaction is short as possible, which is especially valuable when the start of the race may only be seconds away.
Another key area that I anticipate will need significant improvement to advance is the settlement between betting operators and agents, and one that will need to be solved sooner rather than later.
Lastly, with the levels of innovation happening at the moment, is this the best time to be involved with the gaming industry?
SD: Without a doubt.
New technology, especially when it comes to mobile, is opening up plenty of new possibilities and opportunities. The pace of change we’re seeing is making it a very exciting time to be in business.
I predict that the market will be fascinating in terms of growth, as digital wallet tech continues to go mainstream, and we are working with gaming partners to make OKTO the best tailored solution for betting and gaming available.
