As US gaming continues to grow, the payment solutions package provided by operators has become crucial in driving retention and lifetime player value. Why?  

We discuss this all-important area of business for operators with PayNearMe’s VP & Head of Marketing, Anne Hay, and VP for iGaming and sports betting, Leighton Webb, using data gathered from 2,050 iGaming players across 19 states. 

Hay: We gathered data on the player’s experience with operator payment solutions, focusing on three key areas. We focused on age groups, from 18 to 65+, male vs female, and frequent vs casual bettors. Some of the most interesting differences can be seen between frequent and casual bettors. Frequent bettors were defined as placing one or more bets a week, and casual bettors as less than once a week.  

How important is it for you to have access to the following deposit options when depositing funds for online gambling/sports betting?

The research uncovered four key insights: 

1. Choice matters. Bettors expect a wide range of options for making deposits and withdrawals. Some options bettors want aren’t even available in the US today. 
2. Experience is everything. Slow deposits and withdrawals are hurting the player experience. The research indicated that the withdrawal process was 10% more painful than depositing. This is probably not surprising given the checks and balances that go into the withdrawal process. However, the research showed that with minor improvements, this process can be sped up significantly. The biggest issue for players was the length of withdrawal time.
3. Information privacy. This is an area where the difference between frequent and casual really stood out. Casual bettors in particular were wary of sharing additional financial information to sign up. There’s an expectation around privacy and anonymity, to protect personal information.
4. Preferences. Different bettors have different preferences, particularly frequent vs casual bettors. There is a need for operators to meet the expectations of both early adopters and casual bettors as the industry matures. It’s imperative for operators to retain players they work hard to attract to the site, given the incredible cost of acquisition per player operators spend. Many operators in the US are finding current acquisition costs unsustainable, $1,000+ per player.  

An important point here is that an operator does not officially acquire the player until a deposit is made. You may have a player visit your site, but until they make a deposit you haven’t acquired anyone. It’s a lot to spend on drawing a player to your site without giving any attention to that point of acquisition. It’s important, too, to make it seamless and frictionless for a player to complete the deposit. The data showed that the point of deposit represented a barrier, because the process was not seamless. Many said they would leave and try again at some point down the line, or leave and never come back. If you’re an operator opening up in a new state – the process of which is a bit of a land grab – then you have one chance to get a strong foot in the door. If you turn off players, particularly casual bettors from the offset, the likelihood of them coming back is pretty slim. 

How would having access to your preferred withdrawal types affect your withdrawal behavior?

Webb: I think the research shows that payments are more than just physically moving the money. When you look at choice, an operator shouldn’t have choice for the sake of it; but choice that supports the player experience, preferences and, of course, privacy. I was on a call last week with a Tier 1 operator in the US, who asked: “It seems like there’s an unlimited number of tenders we could have in our cashier, but what is the optimal tender mix, what is the best combination?” So choice is important, but it has to be the right mix so that the overall payment experience isn’t degraded, or confusing for the player. It has to be a mix that players are comfortable with, featuring tenders that players are used to using in their everyday lives. This way, when a player enters an application, you’ve lowered the entry barrier for a player.

PayPal is a great example. People use PayPal across their everyday lives, so having PayPal in an iGaming or sports betting application adds a layer of comfortability. The research backs this, 64% said PayPal was an important option, and this is backed up by the operators we speak to. On the other hand, Cash App, which is not available for operators in the US and is not available at all in the global iGaming space, was a tender type that 56% of respondents claimed would be their preferred tender. These two tender types (PayPal and Cash App) are very similar, in terms of the brand, the level of trust people have in them and the ease of use. Put this up against a tender type that players aren’t as familiar with and there are some operator sites that players are less familiar with, which is not good for the player or operator.  

How long does it typically take for you to receive funds from your online gaming account after initiating a withdrawal?

The other factor to keep in mind is that the US is a far less mature market than the UK and Europe. So when we talk about early adopters vs casual bettors, it’s an area that is extremely important right now in the US market. What the data has told us is that early adopters are more willing to go through any added complexity, any added hurdles to make that sign-up official with an operator, and simply wait for a more optimal payment option to come along. However, as the US market matures, one thing each state will see as it grows is that it will exhaust the acquisition of early adopters, and need to try to convert casual players into more frequent ones. These casual players are likely to have different sets of expectations and different tolerance levels, regarding deposits and withdrawals on an application.

What’s more, it’s worth noting that in the US, iGaming is only available in five states today. As iGaming continues to become more regulated in the US, we know this market has a different profile, it draws the more casual player in the US. Early adopters, the ones who bet frequently in the US, are associated far more with sportsbooks. They understand the steps associated with the process and are willing to go through all sign-up procedures. The takeaway from this is that operators need to think about payments as more than just physically moving the money, and think about it more as the overall experience. This touches everything from choice, the experience, the design, the flow of a website or application and communication with players.

This all ties in with privacy and trust. Operators need to think about their payment options holistically, that way they can best manage costs. As Anne said, customer acquisition costs are extraordinarily high for operators; there’s no way most of them can continue to spend upwards of $1,000 per player on acquisition costs. One of – if not the main way – to pull down customer acquisition costs is to do a better job at converting those players who download the app or visit the site, and go through to make a successful deposit. Plus, you can’t talk customer acquisition and forget lifetime value. So you need to make sure you’re retaining those users, and one of the ways to retain users is to make sure that their overall experience is a positive one. By that, I mean a successful withdrawal.