Make no mistake. While they are a unique sub-segment of global consumers, digital gamers and gamblers are just like every other denizen of the internet: They want to be paid what they have won, preferably as fast as possible.
“Consumers keep demanding a better, more convenient, seamless, secure user experience that makes their lives better. And this is happening across many verticals,” Mastercard‘s Senior Vice President of Digital Payments Silvana Hernandez told PYMNTS in a recent conversation. “You want faster P2Ps, you want faster insurance payouts, you want faster loan disbursements. It fits in that you want faster payouts for gaming and gambling.”
As consumers’ day-to-day lives have digitized across the board in 2020, Hernandez said that Mastercard had already seen a trend toward the adoption of instant payments. The pandemic did not create a need for consumers to get their money faster, but it did massively accelerate growth in the area. And that growth will continue even as the pandemic fades, she predicted — because even after consumers get back to “normal” experiences, they aren’t going to abandon their desire for faster payout experience, in gaming or anywhere else. Which is why Mastercard’s path in the digital gaming space is pointed directly forward, as it’s a big market that is getting bigger by the day.
“We estimate about $120 billion as the size of the overall market in the U.S.,” Hernandez said. “We are now using Mastercard Send, our push payments platform, to support four sub-verticals of games of chance, where you buy tickets online, sports betting and bookmaking, games of skills and fantasy sports. These segments are growing the fastest within the overall vertical.”
The ‘Better For Everyone’ Solution
And it’s a sound customer relationship strategy. Getting paid faster allows gamers to better control their cash flow, enabling them to put their winnings to work for them more quickly — often in other online gaming applications.
What is often overlooked, however, are the myriad ways that paying out faster is also better for the merchant in this situation. It allows them to modernize the ways in which they interact with their customers, thus making digitization possible — an essential competency in the world of COVID-19. Consumers are looking for ways to entertain themselves, Hernandez said, and in a gaming function, not having the option to get instant payments digitally “feels like a broken part of the process to the consumer.” Instant payments are critical to fully delivering on that end user experience, she noted.
Moreover, merchants aren’t just building a better, more manageable payment experience for the customer — they are building one for themselves as well.
“On the operational side, simplifying some processes like managing checks is painful — not only for the recipient, but also for the sender,” Hernandez explained. “Being able to make those processes more efficient — and getting some savings on the operational side – is a major benefit for the recipient.”
The Road Ahead
The demand for digitization and change is going to carry on — even when the pressing need for it, triggered by shelter-in-place orders in the U.S., have disappeared from public life. The pain points of the past, like waiting on payments, won’t simply be annoyances — they’ll be the things consumers simply find unacceptable in the future. Hernandez noted that ultimately, merchants in online gaming and beyond will face two choices: They can optimize and future-proof when it comes to instant payments — and be ready to move winnings and other funds as soon as customers win them — or they can watch those consumers head off to the players that have made such digital optimization happen.
Hernandez said consumers will continue to expect a seamless experience, “and it will be the merchants that find new and inventive ways to do that — this year and beyond — that will keep their customers and find that digital tools are helping them thrive.”