PayNearMe: Payment Experience Crucial to Online Bettors

Digital payment provider PayNearMe recently released new research that outlined the important role that the payment experience plays in converting and retaining mobile sports bettors and iGamers. Leighton Webb, the company’s vice president and general manager of iGaming and sports betting, talked to GGB News about how operators can better position themselves for success in a crowded landscape.

PayNearMe: Payment Experience Crucial to Online Bettors

In a post-PASPA world, the growth of mobile sports betting and iGaming across the U.S. is all but inevitable, with new states and new markets launching seemingly by the week.

This rapid rate of growth has introduced online gaming to dozens of new jurisdictions and demographics in a relatively short amount of time, and the data reflects this trend—since 2018, mobile sports betting revenue has skyrocketed from less than $500 million to a projected $7.62 billion by the end of 2023, according to Statista. Online gaming, with only six legal states as opposed to over 30 for sports betting, is slated to bring in $6.29 billion by year’s end, a 34 percent increase over 2022.

However, as the revenues and number of account sign-ups continue to rise, so too do the number of technological glitches and other user-related issues. With competition as fierce as ever, the companies that can offer the smoothest and most satisfying user experience will inevitably rise to the top, and as it turns out, the data reflects this as well.

Billing and payment provider PayNearMe recently released a new report in conjunction with Betting Hero, titled “iGaming Payment Optimization is Key to Player Retention,” which showed that seamless funding and withdrawal processes are of vital importance for mobile operators.

According to the study, which polled 213 U.S. adults who placed at least one legal online bet, nearly a third (29 percent) of respondents reported having issues funding accounts or withdrawing funds on mobile apps.

Of those bettors, 27 percent indicated that those problems were the chief reason for discontinuing play on an app.

With regards to funding issues specifically, 26 percent of respondents reported that their card was declined, but there were four other categories that garnered votes of at least 10 percent—these included difficulties linking bank accounts (25 percent), technical issues with alternative payment methods like PayPal and Venmo (19 percent), account access issues (15 percent) and a lack of preferred deposit methods (13 percent).

On the withdrawal side, speed and simplicity were the two sticking points, as 60 percent of bettors who reported having withdrawal issues said that they would be either “likely” (32 percent) or “very likely” (28 percent) to switch to a different app that promised faster withdrawals.

Leighton Webb, vice president and general manager of iGaming and sports betting for PayNearMe, said that the inspiration for the study was to see how the rapid growth of mobile gaming in recent years has impacted the payment experience for end users, and to see what kind of value that impact had for operators.

“We wanted to take a look at how critical the overall payments experience is,” Webb told GGB News. “Yes, the moving of the money and the ability to make a deposit or withdrawal, that’s clearly important. But from a user’s perspective, once they make a decision, ‘I wanna make a deposit, I wanna wager,’ they go into the cashier, and what is that experience like, how intuitive is it, what is the impact? What kind of impact or not is that having in the industry?

“And so we really wanted to look in more detail to really validate what we believe to be true in terms of what kind of impact that was having. So that was really the impetus of it, to look at the payments experience as holistically as possible in addition to just the moving of the money within the payments experience.”

Now that the research has been conducted and the data collected, the next step for operators would be to inspect their own interfaces to make sure that they meet players’ expectations, Webb said.

For both deposit and withdrawal processes, it is crucial to include all of the most popular tender types, which, according to Webb, are “debit, credit, PayPal, Venmo, bank account and cash.” By offering broad coverage, operators are more likely to have better conversion and retention rates, as players are inclined to simply use another method if they experience issues.

According to the study, 28 percent of respondents with funding issues reported trying another method, compared with 24 percent of respondents who cited withdrawal issues. Both of those percentages were higher than the amount of players who simply left the app—23 percent on the funding side and nine percent on the withdrawal side.

Thankfully for operators, Webb noted that PayNearMe’s platform can help alleviate some of the challenges associated with diversifying tender options.

“Within our platform, we offer all of those major tenders through one platform, one integration and one settlement,” he said. “That’s particularly beneficial for smaller mid-market operators that don’t have the resources or the volume, frankly, to be able to go out and do direct integrations with all of those providers. It’s too complicated, it’s too costly. And so we offer that complete solution for them within that one set.”

As the mobile sports betting and iGaming industries continue to mature in the U.S., the stakes will get increasingly higher as players start to gravitate toward their preferred app.

The study notes that almost half (41 percent) of online players use just one app, compared to only two percent who use four. The majority (54 percent) of respondents deposit funds into their mobile accounts at least once per month, meaning that even just one instance of payment or deposit issues could potentially lead to the loss of a loyal, high-value player.

Having been in the online gaming space since 2013, PayNearMe has seen this evolution first-hand, and has seen the importance of consistent performance—the company currently processes cash deposits for 16 of the 17 largest online casinos in the U.S. and nine of the 10 largest U.S. operators.

In the end, Webb asserted, those who can provide consistent high-level performance will inevitably win out in a race that is only becoming more crowded and more competitive as time goes on.

“You’re starting to see operators really separate themselves,” he said. “And I think this is being reflected in market share with products and quality of product that’s very different from others that are more in the bottom of the market…If you of look at the key leaders and even some ones that are mid-market that are doing a great job in certain segments of the country, that separation is because of quality. So that is the parallel to other industries, and whether it’s gaming or e-commerce, it always comes down to the product at the end of the day.”