In its sixth edition, the Global Gaming Payments Report by Worldpay compiles insights from over 40 key markets, shedding light on the transformative trends reshaping the gaming industry. From the surge of cryptocurrency and embedded finance to addressing fraud and emerging markets, this report encapsulates the industry’s response to an era marked by rapid change.
Cryptocurrency: A Game-Changer
Cryptocurrency, featuring prominent names like Bitcoin, Ethereum, and Kraken, has become a ubiquitous topic of discussion. Cryptocurrency’s borderless nature and speed have made it a preferred choice for cross-border fund transfers, challenging traditional methods such as wire transfers. The report highlights a 116% global increase in cryptocurrency usage at online casinos exclusively accepting digital coins. Furthermore, mainstream brokers are gradually embracing crypto trading.
Despite its popularity, the report emphasizes that the current volumes of cryptocurrency transactions do not yet pose a significant threat to conventional payment methods. The lack of regulation in many crypto-only operations remains a concern. However, opportunities are emerging for operators to adopt pay-by-crypto solutions that don’t necessitate holding crypto coins, paving the way for regulatory acceptance. Notably, 60% of central banks are exploring the issuance of stable cryptocurrencies, potentially moving these digital assets into the mainstream.
Fraud: A Growing Challenge
The report identifies a concerning 50% increase in digital fraud levels within the gaming industry from Q1 2021 to Q1 2022. This surge in fraud is attributed not only to the expansion of online gambling and newly regulated markets but also to the sophistication of fraudsters. The shift towards online services has generated more transactions and data, offering hackers more opportunities. Within the gaming sector, factors like bonus abuse and sign-up perks have attracted “friendly fraudsters.”
To combat this, operators are investing in advanced fraud prevention technologies. Sophisticated solutions, including machine learning and expert teams, help identify and predict fraud, offering an additional layer of security. Worldpay’s Fraudsight tool, for example, employs machine learning to analyze billions of transactions, continually updating fraud prevention rules.
Emerging Markets: Opportunities Abound
Approximately 72% of the global population has access to instant payments through real-time payment infrastructures in 60 markets. While the US and Europe dominate the epayment landscape, other regions are catching up.
Brazil: With a forecasted CAGR of 29%, Brazil is poised to become a prominent market for online betting, particularly after a significant election. The country’s passion for football and an existing unregulated market create a promising environment for growth. Regulatory clarity is crucial, enabling operators to invest and ensure responsible gambling.
Africa: Nigeria leads the way in Africa’s burgeoning online betting market, with Kenya, Tanzania, and South Africa following closely. Investments, joint ventures, and partnerships are flourishing. However, international operators often lack awareness of conducting business in individual African countries due to varying regulations.
Localized payment solutions are pivotal for expanding operators. Worldpay collaborates with regional payment providers, like Flutterwave, to support operators in their African expansion.
Pix: Revolutionizing Payments in Brazil
Pix is an exemplary case of successful payment technology introduction in emerging markets. Developed in collaboration with Brazil’s Central Bank, Pix leverages open banking regulations, enhancing transparency and facilitating direct payments from bank accounts. Pix offers speed, efficiency, reduced costs, and minimal chargeback risk, making it an attractive choice for operators entering the Brazilian market.
Lottery: Surprising Growth
One surprising revelation from the report is the projection that online lottery growth will outpace other gaming verticals with a 13% CAGR between 2021 and 2026. The widespread acceptance of lottery as a socially acceptable form of gambling and robust global regulation contribute to this growth.
The gaming industry faces unprecedented opportunities and competition. A strategic approach to payments, including localization and adopting innovative payment technologies, can significantly accelerate revenue growth. As markets continue to regulate and payment innovations become more accessible, the future of gaming payments appears promising, offering fast and secure access to games for a growing number of consumers.