3 min read
The use of open banking in iGaming is becoming increasingly popular due to its many advantages. This innovative technology is revolutionising the iGaming industry, providing players with a seamless, secure, and efficient way to fund their accounts and withdraw their winnings.
How is open banking used in iGaming?
Open banking is used in iGaming to provide players with a secure and convenient payment method. Traditionally, players must use credit or debit cards to make deposits and withdrawals from their gaming accounts. However, with open banking, players can now link their bank accounts to their gaming accounts, allowing seamless transactions without needing a middleman.
Using open banking for iGaming payments provides players with several benefits. Firstly, it provides a more secure payment method, as players do not need to share their banking information with the gaming provider. Instead, the gaming provider only receives transaction confirmation from the player's bank. This reduces the risk of fraud and identity theft.
Secondly, open banking provides players with a more convenient way to pay. Players can link their bank account to their gaming account, which means they do not have to enter their banking details every time they make a transaction. This saves time and reduces the risk of errors when entering banking information.
Finally, open banking is also cost-effective for gaming providers. By using open banking, gaming providers can avoid the high fees associated with traditional payment methods such as credit and debit cards.
Advantages of open banking in iGaming
Instant transactions: Open banking enables players to make instant deposits and withdrawals without needing credit or debit cards. This means that players can enjoy their favourite games without worrying about delays in deposit processing or withdrawals.
Enhanced security: With open banking, players can no longer provide sensitive banking information to iGaming operators. Instead, they can use their online banking credentials to initiate transactions, eliminating the risk of fraud or theft.
Improved user experience: Open banking provides players with a seamless and user-friendly experience. They can fund their accounts and withdraw their winnings without leaving the iGaming platform, making the process quick and easy.
Cost-effective: Open banking is cost-effective for iGaming operators, as it eliminates the need for third-party payment processors. This means operators can pass the savings to their customers through reduced transaction fees or bonuses.
Challenges of open banking in iGaming
While open banking has proved to be a game-changer for many industries, including finance and e-commerce, implementing open banking in iGaming comes with its challenges.
One of the significant challenges of implementing open banking in iGaming is regulatory compliance. The iGaming industry is highly regulated, and strict laws govern the handling of customer data and financial transactions. These regulations vary from country to country, making it difficult for iGaming operators to comply. Therefore, iGaming operators must work closely with regulatory bodies to comply with all relevant regulations.
Integration with legacy systems
Another challenge of implementing open banking in iGaming is integrating it with legacy systems. Many iGaming operators use legacy systems not designed to support open banking. It is difficult for iGaming operators to integrate open banking into their existing systems. Therefore, iGaming operators need to invest in modernising their systems to support open banking.
Security and fraud prevention
Security and fraud prevention are significant challenges of implementing open banking in iGaming. With the increased use of APIs to access financial data, there is a risk of unauthorised access to sensitive financial information. Therefore, iGaming operators must ensure robust security measures to prevent unauthorised access to financial data. They also need to implement fraud prevention measures to prevent fraudulent transactions.
Finally, customer education is a challenge when implementing open banking in iGaming. Many customers need to be made aware of open banking and its benefits. Therefore, operators must educate customers about open banking and its benefits to encourage them to use it.
The potential growth of open banking in iGaming
The potential for open banking in the iGaming industry is immense. According to a report by Future Market Insights, the open banking market is expected to reach ~US$ 158.6 billion by 2032, growing at a CAGR of 23.2% for 2022 – 2032.
In the iGaming industry, open banking could increase player retention and loyalty, as players can deposit and withdraw funds quickly and easily, without having to navigate complex verification processes. This, in turn, could lead to increased revenue for iGaming operators.
Open banking could also lead to the development of new and innovative iGaming products and services, such as real-time payments, allowing players to receive their winnings instantly.