As the U.S. iGaming market continues to expand, including through state-by-state regulation, the opportunities for operators to accelerate revenue growth will be seismic. Research predicts we will see a compound annual growth rate (CAGR) of more than 10% between 2022 and 2030 as the industry matures, more states come online, and the payer base increases in states that have already regulated.
But of course, with such hefty rewards up for grabs, competition will be fierce. Current market leaders, international operators with eyes on entering the U.S. market, and disruptive new start-ups with fresh ideas will all be fighting for market share in what will increasingly become a saturated market. This is pushing player cost per acquisition (CPA) up through increased marketing spend and sign-up incentives, and potentially lifetime value (LTV) down as fickle players switch between the many options they have to choose between.
Player experience is going to be key for operators to successfully navigate this challenge, and this begins with the cashier. The range of payment methods, a seamless authentication process, smart deposit sum suggestions, and likelihood of payment acceptance are just some of the ways deposits can have a positive or negative impact on overall player experience.
But often the impact of payouts can be slightly overlooked, because a clunky or failing experience doesn’t have the same immediate effect on player acquisition as factors such as acceptance rates. However, this could be a critical mistake. As our recent whitepaper on the impact of real time payments on the U.S. iGaming industry explains, offering an industry-leading payout experience is an incredibly effective tool in differentiating iGaming brands in the eyes of players. And inevitably, when it comes to evaluating payouts, speed of settlement is the key criteria players will judge operators on.
Why instant payouts to cards are a gamechanger
Nuvei was the first payments provider to bring instant payouts to the U.S. iGaming industry in 2021. Players with a bank account integrated into the Clearing House’s Real Time Payments (RTP) can request an instant payout via Nuvei Instant Bank Transfer. Now operators can integrate instant payouts to debit and credit cards as well.
There are several reasons why integrating instant payouts to cards can have a significant impact on player experience:
- Payouts are players’ top priority
Industry research tells us that not only are fast payouts important to iGaming players, for many accessing their funds quickly and securely when they request a withdrawal is the most important factor they consider when comparing iGaming brands. This is ahead of factors such as sign-up bonuses and odds. So, demonstrating frictionless cashing out is a critical tool for player acquisition.
- Fast payouts reduce the risk of fraud and increase deposit volume
Our data indicates a reduction of money laundering, chip dumping and other fraudulent activity due to a closed loop payment flow, as well as a drastic increase of player deposits following the introduction of the Visa Direct, Mastercard Send and RTP payout programs. Faster and easier access to gaming balances results in a stiff increase in deposit volumes due to the ability for players to rapidly wager in multiple gaming categories. Also, thanks to instant payment programs, merchants can create different marketing activities to incentive active players to re-deposits.
- Consumers value choice
We also know players don’t want to be limited by the options in their cashier. Factors including convenience, security concerns, availability, willingness to embrace new technology, and likelihood of acceptance mean that consumers have developed strong personal preferences when it comes to payment methods across eCommerce, and iGaming is no exception. And expectations of having access to their preferred payment method is high; increasingly breadth of payment options in the checkout or cashier is a determining factor when consumers choose whether to complete a transaction with a merchant or not. For iGaming operators competing for players in an increasingly saturated market, failing to convert players due to limited deposit or payout options could have a dramatic impact on CPA. Losing players for the same reason will damage LTV.
- Cards are still king
But despite the emerging popularity of alternative payment methods, cards remain the most commonly used online payment method in the U.S. According to our research, 56% of U.S. consumers use credit cards to make online purchases across all of eCommerce on a monthly basis, and 49% use debit cards (in iGaming debit card usage is significantly higher than credit cards). The next most frequently used online payment methods are digital wallets (habitually used by 38% of consumers), prepaid cards (14%), , eCash (12%), store cards (9%) and online bank transfer (9%). Almost two thirds (62%) of U.S. consumers told us their number one preferred online payment method across all eCommerce is a card (34% credit card; 28% debit card). The next most popular preferred payment method is a digital wallet (18%).
In the U.S. iGaming industry, the online payment landscape is slightly different. Due to historic issues with card acceptance rates and players’ reluctance to share financial details with operators, there has been less reliance on card payments, with alternatives such as instant bank transfer being popular. But card acceptance rates have improved dramatically as banks and issuers have become more comfortable with regulated iGaming, making card payments increasingly important for players that prefer to use cards for their online payments.
Integrating instant payouts to cards: Next steps
Marketing leading payments providers for U.S. iGaming know the importance of instant payouts to cards, and are working with card schemes to make this a reality for operators. Push payment platforms such as Visa Direct and Mastercard Send enable operators to send funds directly to their customers cards via their card scheme rail in near real time. There are many use cases for these push payments, such as insurance claims, but one of the most effective is the gaming industry.
The impact of Nuvei Instant Bank Transfer’s real-time payouts capability has been dramatic for iGaming operators in North America. Instant payouts to cards are set to be equally effective as a tool for maximizing operator revenues and accelerating business growth, and so must be strongly considered across the industry.
For more information about the impact instant payouts to cards can have on your business, and how to integrate instant payouts to cards into your cashier, contact us today.
|Umberto Corridori, is the SVP iGaming Int. Digital Payments at Nuvei. Umberto has professional experience in both North America and Europe, where he has held senior roles with global IT companies such as Pitney Bowes, Dell and eBay. Prior to joining Nuvei, Umberto spent an extensive period of time at PayPal where he served as Head of Sales Italy & iGaming CEMEA, to introduce new payment solutions and expand the digital business of numerous of medium & large corporate companies across Europe. Umberto’s comprehensive knowledge of the North American and European markets, mixed with 16+ years of experience in fintech, solution-based approach and industry knowledge is driving Nuvei technology to rapidly expand into new verticals and territories.|