Payments performance can be a catalyst for growth

Innovation has transformed every aspect of the gambling industry over the last decade, from the way that people research and compare odds, the way they interact with operators, betting platforms and other players, and the types of bets they place.

Ten years ago, we would place a bet in a high street betting shop or on a desktop. Today, according to EGR, more than three quarters of all sports betting (by stakes and revenue) is done on mobile devices. Payments is one area which has seen huge disruption over recent years and those operators that have successfully integrated localised and personalised innovative technologies and alternative payment methods (APMs) into their payments infrastructure have undoubtedly stolen a march on the competition.

In recent global research we explored the current payments landscape, examining challenges and priorities for payments teams across a wide range of industries, including the gambling sector. The research revealed that 84% of gambling payments leaders predict that a greater focus on payments performance would actually increase their organisation’s revenues by between 1% and 10%. Surprisingly, changes to performance could represent 7% to 10% revenue growth for as many as 42% of them.

New technology and innovation is also seen as an important catalyst for improved payments performance and growth. More than three quarters (78%) of payments leaders in the gambling sector believe that deploying AI within payments systems will drive improved performance and additional revenue.

Measuring payments performance

Measuring and evaluating the effectiveness of payments performance needs greater scrutiny to ensure that the process for customers meets expectations and provides a good user experience. We found that only 14% of gambling operators currently measure payments performance in relation to customer experience, trailing behind all other sectors including retail, travel and foreign exchange.

Instead, when it comes to measuring and evaluating payments performance, the most widely used metric is growth rates deployed by 58% of operators, followed by conversion rates (54%), operational costs (40%), acceptance rates (40%) and impact on revenue and profitability (36%).

Payment leaders acknowledge that customer satisfaction will be primarily driven by minimising the number of steps that need to be taken in the payment journey, while also reassuring customers around security and that payment pages are encrypted and consolidating international payment providers. These steps are followed by incentivising payments teams around improved efficiency (88%) and optimising merchant category codes (MCCs) to increase authorisation rates (82%).

There seems to be a real disconnect between the organisational drive for greater payments performance and the objectives and focus of those individuals responsible for delivering it. Remarkably, fewer than one in five payments leaders has personal and team KPIs that are fully aligned to the KPIs of the wider business and to broader commercial objectives.

Putting performance first

Payments leaders within gambling have a career-defining opportunity to deliver significant commercial and financial results, through a strategic approach to payments performance but they need to ensure they lay the right foundations to exploit this opportunity in full.

Payments teams need the high quality skills, or support from external providers, to analyse, interpret and present data back to the business in a coherent and accessible way. The narrative around payments needs to change, from a tactical focus of ‘keeping the lights on’ to a strategic, business imperative, where performance is clearly aligned to overall strategic goals and KPIs, and payments teams are measured and incentivised around hard commercial metrics.

As an industry, if we can get this right, payments performance will create a platform for payments teams to position themselves as more strategic and high-value functions within their organisations.

Jonas Reynisson is the founder and CEO of emerchantpay, responsible for the strategic direction of the emerchantpay business. Prior to his career at emerchantpay, he was the managing director of one of the local savings banks in Iceland for 13 years, chairman of a life insurance company, and a board member of one of the leading investment banks in Iceland at that time.