Ease of payment processing helps igaming and sports betting operators retain players and offset rising customer acquisition costs that have run into hundreds of millions of dollars as these U.S. markets become more competitive.
Operators are reassessing marketing expenditures and strategies in an effort to make those costs more effective. Several have announced cutbacks on advertising and bonus spending to focus more on player conversion and retention, admitting that customer-acquisition costs are unsustainable and render the business unprofitable.
Santa Clara, Calif.-based PayNearMe is offering a solution.
PayNearMe executives have gotten feedback from operators that a positive deposit and payout experience is of the utmost importance to players. Improving deposits and payouts not only creates higher player satisfaction, but it also encourages players to return to place more bets. It’s also crucial to operators’ bottom-line performance.
In fact, according to PayNearMe consumer research, the ability to easily make deposits and receive timely payouts is just as important as having access to bonuses and player-preferred content. The latter requires a significant amount of investment, while the former is more about choosing the right payment provider.
“A shift is taking place among operators beginning to put added focus on the payment experience to improve conversion, retention, and overall margin – and that opens the door for us,” said Leighton Webb, vice president of igaming and sports betting for PayNearMe, which solves for the complexities of money movement, seamlessly combining capabilities for deposits, payouts, cashiering, cash at cage, analytics, and financial operations in a single platform.
“Over the past 18 months, states have legalized sports betting online and there’s a mad rush by operators to get to market as quickly as possible,” Webb said. “They’ve also been spending an exorbitant amount of money to acquire customers. Late last year, you started to see some cracks in that strategy with questioning whether those acquisition costs were sustainable. Many people would argue they’re not. The thinking is that if those acquisition costs are unsustainable, what can we do to bring down the costs and increase the lifetime value?”
That’s where PayNearMe comes in with a payments solution, Webb said. When an operator measures customer acquisition, it’s done at the point where that player has made a successful deposit, so they want to bring that cost down as much as possible.
“One of the best ways to do that is to improve the payment experience, starting from the moment a player gets to the operator’s cashier,” Webb said. “Operators know that if players have a poor experience or an unsuccessful attempt at that first deposit, they’re likely to leave and never return. It’s crucial to make that experience as quick and intuitive as possible not only for deposits, but also withdrawals. Operators need to provide a range of deposit types for immediate funding and withdrawals need to happen quickly, not over the course of days, which many operators still struggle to provide.”
Last fall, PayNearMe announced a partnership with global fintech company, Pin4, that enables operators to provide players with instant access to their winnings in cash at 18,000 ATMs in the U.S. through the integration of Pin4 technology into PayNearMe’s MoneyLine platform.
The MoneyLine platform is an end-to-end payment gateway and platform designed to remove friction, enabling operators to deliver a best-in-class player journey, Webb said. With one integrated platform, igaming and sports betting operators can process deposits, initiate withdrawals, and gather insights from data to automate decisioning and better manage payment experiences that ultimately reduce costs and increase revenue.
“When players think about payments, they believe it’s part of the operators’ platform,” Webb said. “It’s not a separate product to them, it’s just one experience. Thus, payments is a big part of that experience and having a positive one directly correlates to conversion, retention, and lifetime value.”
Players prefer to use payment methods they trust and are familiar with. Having a range of tender types for players to choose from is an important first step in the deposit flow. PayNearMe offers all major tender types through the MoneyLine platform, with plans for more as new payment types become more mainstream, Webb said.
“Operators can use MoneyLine to design the cashier experience or create their own to provide the tenders they prefer,” Webb said. “It’s completely configurable based on operator needs – one solution through one integration to not only effectively manage and scale their payments offering, but also to be future-proof.”
PayNearMe’s goal is to help operators minimize players dropping out of the flow, Webb said. “One of the more advanced features of MoneyLine is what we call ‘elegant retries.’ If PayNearMe knows that a bank, for example, won’t approve a player transaction ahead of time, the platform can redirect the depositor to other payment types to help complete the deposit.
“It’s very much about guiding a user through that process, with the goal of having a successful deposit,” Webb said. “With MoneyLine, operators can provide every major tender in a seamless fashion to enable them to focus on optimization and conversion.”
While putting money into the system is important, it’s equally important for a player to be able to easily get their money out, Webb said. “One of the reasons it’s important is it gives the player satisfaction. They win and even if it’s a nominal amount, they want to get their funds without any wait or uncertainty. That goes to their satisfaction and trust of the product and willingness to come back and play again and again.”
Webb said they can do a push to debit cards in a matter of minutes and accommodate PayPal disbursements and cardless cashouts at ATMs, mirroring the cash-in deposits.
“It’s about a variety of tender types and giving the player choices of what they’re familiar and comfortable with,” Webb said. “And we do that in a rapid and efficient way, so the player has a positive experience and is willing to come back to play again.”
PayNearMe operates and processes payments for licensed operators in 18 U.S. states and continues to expand its gaming footprint as new states legalize igaming and online sports betting. It processes cash deposits for 16 of the 17 largest online casinos in the U.S. and nine of the 10 largest U.S. operators, including BetMGM, TVG, PointsBet, FanDuel, and Caesars Sportsbook.
“The MoneyLine platform helps operators glean insight into player behavior – where they’re having difficulty and where they’re dropping off – and make decisions based on that,” Webb said. “Several large operators are still manually approving their disbursements. For one operator, it resulted in significant player backlash in terms of complaints on social media and to state representatives as to why can’t they get their money off the platform. Using a platform such as MoneyLine allows them to automate more of that process.
“Operators have an opportunity to deliver a payment experience for players akin to what they enjoy in ecommerce and other daily transactions, essentially removing friction and making the payment as invisible as possible,” Webb said. “A lot of work still needs to be done in the igaming space, but focusing on making the payment experience easier will go a long way toward helping to lower customer-acquisition costs.”
