This is a guest contribution by Ron Mendelson of Fast Offshore. If you would like to submit a contribution please contact Bill Beatty for submission details. Thank you.
While world economies struggle and many businesses are trying to find a way to continue being profitable, online gambling has seen a huge surge in popularity. During the last 12 months, online casinos, eSports and other forms of iGaming have seen a huge increase in players. A recent Global Markets Insights report on the online gambling market predicts that the market will continue to grow exponentially and will surpass $160 billion by 2026.
Concurrently, cryptocurrency and digital currencies are also growing in adoption. As people start to abandon physical fiat currencies and look for other ways to hold and transact money, crypto has become the leading alternative option.
When you bring the two together, the result is a product that offers a wide range of benefits to both online gambling operators and customers alike.
Benefits for your business
As an online gambling operator, you might be wondering what the specific benefits of cryptocurrency integration are for your business. There are many and as crypto continues to develop, they will increase. But for now, here are some of the key bonuses for you and your business model:
- Borderless transactions
Cryptocurrency is borderless. It doesn’t matter where your customers are based, you can transact quickly, easily, and in a cost-efficient manner. You do not need to wait for banks and corresponding banks to process payments, nor do you have to pay fees for currency conversion. Cryptocurrency is a truly international payment system and removes any geographical obstacles to sending and receiving payments. This is great because your business can enjoy a wider market share and cater to clients worldwide.
- Zero chargebacks
Chargebacks are a headache for online gambling providers and they can also result in problems with your merchant account or bank. When your customers pay in cryptocurrency, there is no way for them to initiate a chargeback. This is because cryptocurrency transactions are registered on the blockchain which is completely immutable and cannot be edited, removed, or tampered with in any way. Once the payment is made, the client cannot change it and you don’t need to worry about your account facilitator getting annoyed.
As mentioned above, cryptocurrency transactions are completely immutable and cannot be deleted or modified once they are on the blockchain. There can be no arguments or disputes about whether a payment was made or how much it was made for. This level of transparency is unheard of in fiat payment systems and is one of the leading benefits of cryptocurrency payments.
- You are in control of your payment limits
Tired of having withdrawal and deposit amounts dictated by a third party? Then cryptocurrency payments are the solution. There are no limits placed on the amount that can be deposited or withdrawn with cryptocurrency payments. This gives you more control over your finances and revenue without the interference of regulators.
There is no bank or financial services institution monitoring activity or deciding what can or cannot be transacted. No controls are placed on payments and your account cannot be frozen for any reason. This is a very valuable benefit for operators and the decentralized nature of crypto gives all power to you.
- No issues with banks
Chances are you’ve had issued with banks declining transactions, putting suspensions on accounts or payments, and various other situations. The beauty of cryptocurrency is that you are not reliant on the decisions of a bank and don’t need to worry about their decisions. With cryptocurrency, you effectively bypass banks completely, thus avoiding any of the issues that can arise when dealing with them.
- Limited regulatory interference
As it stands at the moment, there are only a handful of jurisdictions that regulate cryptocurrency payment. These include the U.K., Greece, Belgium, the Netherlands, Malta, Poland and Italy. While regulation is always welcome, when it comes to new technologies, it can sometimes hamper progress. Using cryptocurrency payments in your operations without having to deal with excess red tape is a great way to prove your concept and iron out any kinks before you move forward.
Benefits for your customers
Benefits are not a one-way thing and we must also consider the plus points for your customers. Here are some of the reasons why cryptocurrency will benefit your clients, increase customer loyalty, and encourage new players.
- Big variety of payments
If you limit your customers to just paying by card, transfer, or payment apps, then you are essentially excluding millions of other clients. There are many reasons why potential players may not have access to a bank account, card, or payment app. Offering crypto payments gives them a way to engage in online gambling meaning there are more customers available to you as a provider. Furthermore, many online gambling sites are yet to roll out cryptocurrency payment to their clients. This means that if you start offering them now, you have a distinct competitive edge at a time when the market is experiencing significant growth.
- Mainstream adoption
A few years ago, there was a bit of skepticism about cryptocurrency but today, that is no longer the case. Cryptocurrency is currently transitioning to the mainstream and heading for widespread adoption across multiple sectors and verticals. It is being integrated and adopted by big-name banks, investment firms, accountants, and other financial services authorities. It is being developed and used by governments, central banks, and state authorities and institutions across the world. Cryptocurrency is also being onboarded by a growing list of international, multinational, big-name companies who are increasingly recognising its benefits. You can be paid in cryptocurrency, pay for your food shopping with cryptocurrency, and pay for subscriptions and professional services with crypto. This has resulted in a situation whereby consumers feel more confident to use digital currencies and are happy to conduct transactions in this way.
- Quick transactions
When a client does a deposit in cryptocurrency on an online gambling site, the money is available quickly. Likewise, when they withdraw funds, the money becomes available again rapidly. This is a huge benefit for customers as long and drawn out transaction processing times can put them off. By offering almost instant payments, you give the consumer greater control over their funds meaning they are more likely to make deposits in the future.
- Low-cost transactions
The fees for executing cryptocurrency payments are significantly less than the fees associated with banks or fiat payment processors. There are also no currency conversion fees or commissions to worry about either. Lower fees mean customers are more willing to make deposits and have more money to spend than with fiat currencies.
- Increased security
Many consumers worry about the safety of using their card or bank account to make payments online. The risk of cybercrime, identity theft, and hacking means some avoid such payments despite wanting to make them. Blockchain payments offer an enhanced level of security as no personal details are shown for the transaction and once the payment has been made, it cannot be changed or deleted. This gives peace of mind to consumers that may be skeptical of internet security.
Avoiding the pitfalls
Of course, some issues arise when conducting transactions in cryptocurrency. The key to dealing with these is understanding them, being prepared, and asking an experienced service provider like Fast Offshore for advice on how to manage them. Here are some of the common obstacles and how you can mitigate them.
- Volatility: Cryptocurrencies by their very nature are volatile. This means their value can go up and down very quickly and with little warning. For example, a customer could make a deposit in bitcoin that has a certain value, but within an hour that value could have dropped- or vice versa. The solution here is to engage a service provider to process cryptocurrency payments. These providers lock in the rate at the time of the transaction, avoiding any issues due to volatility.
- Time frames: Cryptocurrency transactions are generally faster than fiat payments but with certain currencies at certain times, there can be delays. To avoid this, you should engage the services of a crypto processor to ensure that all transactions are fast and efficient.
Financial crime risk: There are concerns around cryptocurrency and an enhanced risk of financial crime, money laundering, and terrorist financing. This can easily be mitigated through the implementation of efficient onboarding processes and AML/CFT policies. Additionally, you should be sure to have solid responsible gaming and self-exclusion policies to protect the interests of your clients