What will it take to align gaming payments in the US with the broader e-commerce ecosystem? iGB speaks to Global Payments President Christopher Justice to find out.
On January 9, 2007, Steve Jobs stepped onto the stage at the MacWorld Expo with a small black piece of glass and metal in his hand.
“We’re going to make some history together today,” he said, holding the new device.
In the 15 years since the iPhone hit the scene, the smartphone has changed the way we live: shrinking the world and connecting us all. We spend half our lives staring at its screen — and when it’s gone or shattered, it’s not unusual to feel something like losing a limb.
And the changes that the smartphone has brought to the business sphere, and especially to payments, are in some ways more comprehensive. Consumers expect to be able to pay with the push of a button and have the product shipped to their front door without friction or hassle. They will not accept delayed payment, analog systems, or going down the park path.
This has always been an issue with gaming where, in most jurisdictions, there is strict anti-money laundering, know your customer and anti-money laundering Social responsibility The requirements complicate the payment process and push that level of ease out of reach.
Justice paints a picture of an industry riddled with outdated technology that is increasingly out of touch with how consumers spend their money elsewhere.
“Part of that is how they all came together on the side of technology that was created many years ago that hasn’t really adapted to the fact that the majority of Americans have a smartphone in their pocket,” he said. Three-quarters of all retail transactions are self-service. Half of all holiday purchases last year were made using a mobile phone.
“All of these different stats that indicate where we’re going as a society is very different from what’s really going on in the casino market because it’s built on the models of yesterday.
“Part of the challenge then is that consumers don’t understand why I can go to Amazon.com, press a button, order dog food, and have an Uber driver deliver it to my door before noon — as long as I’m going to go,” Justice says. The gaming market is very similar to e-commerce, you kill clicks.”
Square the circle
The problem is exacerbated by mobile, Justice says, which runs in a smaller environment than a desktop and makes the need for more efficient payment methods more acute.
“Unlike a computer which has a keyboard and much more space to work in, a mobile phone is more like an electronic purchase. So we minimize keystrokes, making the process easy as a guest can move from one jurisdiction to another, and from one property to another, and still have access to the money he needs to fund gaming entertainment.”
The way to fine-tune this circuit, Adl says, is to create a connected ecosystem that distinguishes between online and land-based offerings. He uses the example of Global Payments’ omnichannel product as an example in action.
“So how we really try to address these things is the fact that we’re creating an interconnected ecosystem. The VIP Preferred program, which has over three million consumers, is growing by about 35,000 to 40,000 members every month, who are consumers who sign up for or accomplish KYC either in physical casinos or at one of our online sites.
The company’s VIP Preferred offering that Justice mentions is a B2C electronic verification system. The system allows the user to transfer funds electronically to illottery or casinos where other payments may not work.
TITO payment system
Global Payments has also had success leveraging existing casino infrastructure to achieve its own goals.
Since the 1990s, most slots in the United States have operated under a band Entry ticket, exit ticket or the TITO system. The slot prints a piece of paper with a barcode that can be redeemed into the cage, rather than discharging physical coins, as in the common stereotype.
The company’s VIP mobility product builds on and expands upon this system, enabling the company to operate within the existing compliance framework that the casino has, rather than creating a whole new canvas system.
“Our approach is very different because we are the only system that takes advantage of TITO’s infrastructure, which has been around for 20 years,” Justice said. “The reason we do this is so everything is trackable and auditable. Because we ensure that money moves in and out, we will balance each day to the penny throughout the resort.
“Leveraging this infrastructure allows for this to be done, so we are not creating new processes and opening the door to new compliance avenues as if you were using an existing betting account system.
“The result of it all is the way our system is built which helps facilitate and maintain the casino’s already existing compliance. There is no AML fingerprint because all electronic sources of funds are already known.
Justice believes that the trends that have brought omnichannel payments to this point are about to reach critical mass in 2023.
“If you look at a typical bell curve of a product introduction, we’re really at the end of the early adopter stage, and we’re moving into the rapid follow-up stage,” Justice says. 2023 will be a great year, more and more people will invest in cashless solutions. It’s a natural progression because as I mentioned earlier, three-quarters of all transactions in the US and retailers are self-serving today.”
“People don’t want to stand in line, they don’t want face-to-face conversations, they don’t want any of that stuff. As we move to cashless, it goes along with what we’re going to as a society. And then when you look at the mobile purchases that have been made This past holiday season, we find everyone is using their cell phones.”
Justice also pushes against characterizations of online consumers as a kind of 20-something digital blockbuster who handles technology differently than the everyday American consumer.
“It used to be like that, and people would tell me my clients are too old: They’re not tech-savvy enough to do this,” Justice says.
Well, the fact of the matter is that when we look at the typical demographic for our database, it’s 55 plus female. They’re on their Android devices, they’re on their iPhones, and they’re using this technology.
“I really find this a massive convergence driving forward. I think 2023 will be the year we start to see mass adoption.”
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