It may come as no surprise that the two fastest-growing industries in the tech sphere are both founded in the online world and are helping to shape the business landscape by driving ever-increasing digitization.
With the current growth of both markets, the blossoming relationship between iGaming (digital gaming) and fintech (financial technology) is expanding both industries into burgeoning sectors, evolving technology as they progress.
The Growth of Fintech & iGaming
The traditional payment methods of bank and wire transfers are still alive and well but as we move to an ever more digital world, those options are becoming less and less appealing.
This is where Fintech stepped in to make its mark. By 2018, the financial technology sector was worth over $100 billion (and that doesn’t even include cryptocurrency or blockchain). Projections put the industry at over $300 billion by end of 2023, raising a lot of eyebrows of investors and thought leaders the world over.
The global gaming industry has been growing rapidly in recent years and continues to expand. It is predicted to be worth more than $565 billion by 2022, an increase of more than $100 billion since 2018, meaning the industry will grow by more than a fifth in the next two years.
How iGaming is Shaping Financial Technology
Esports and iGaming have seen an explosion of popularity and the games have evolved along right alongside. Gambling, competitive video games and even mobile games have all had a hand in shaping technology.
Mobile games and apps especially have had a huge influence on the relationship between fintech and iGaming. Microtransactions within games and apps are the majority income for these developers, and traditional banks, wire transfers, and credit cards simply aren’t the easiest or most secure methods anymore.
Powerhouse apps like WeChat, Viber, and Google all now have integrated pay systems that far more secure and faster than typing a credit card into a browser window.
All you have to do to see the growth of this industry is look at Candy Crush. Remember that stupid puzzle game that everyone was playing? That same game that could be made in an entry-level programming course has grossed almost a billion dollars in 2018.
With an average transaction of about $5-10, you’re not going to hit a billion dollars if consumers have to type in their credit card number every time they make a purchase. Transactions need to be fast, convenient, and secure.
Cash No Longer King in 2020
Earlier this year, OKTO Group’s director of gaming Simon Dorsen predicted that innovative companies will deliver on the new financial technology and the ones “that adapt first and begin to embrace the cashless revolution now will be reaping the rewards come the [sic] end of the year.”
The Cash “Float”
The casino industry is always in need of new financial options and a match between Fintech and iGaming only seems natural.
Online casinos have historically needed to “float” their customer base’s payouts out-of-pocket while money becomes available and moved to different accounts. This means those big payouts and the thousands of daily exchanges come out of the coffers of the operators.
This is clearly not sustainable and the second a Fintech solution allows them to rapidly, safely, and accurately shift money is rapidly approaching.
The Evolution of Currencies in iGaming
Players want to get into the game and get paid as quickly as possible, but iGaming operators have to worry about the logistics of speedy and secure transactions, with potentially large sums of money going back and forth.
Currency isn’t what it used to be and iGaming has been a driving force in expanding payment options from credit cards and cash to ever-evolving forms of payment. With secure PSPs (Payment Service Providers) pushing the bounds, it looks like older funding options will fall away. DogSlots has seen the changes taking place already as slots playtersflock to easier options and this will change the face of currency as we know it.
Digital Wallets (e-wallets)
E-wallets like Neteller and Skrill, are proving to be the new norm for iGaming financial transactions. After the UKGC ban on credit cards in April, digital wallets are growing in popularity, providing complete security along with absolute anonymity — despite some extra fees.
Although still not commonplace in iGaming transactions, cryptocurrencies are becoming more widely used by online gaming aficionados. The speed and security of blockchain technology lend to a stellar endorsement in the online gaming sphere.
PayPal is still the preferred method of payment for many players. It is guaranteed safe and secure and means that you can quickly, easily, and securely play games. It’s offered by all of the most respected and trusted online casinos as it gives both iGaming operators and players peace of mind when making and processing payments.
Future Growth & Expansion
Fintech and iGaming operators have been at the forefront of this technological innovation, spearheading new markets, and increasing their customer bases. By partnering up with an eye to the future, both industries are able to capitalize on the shared power of each other’s business expertise.
The only question mark in the road map ahead is the inevitable regulatory hurdles that will surely pop up. The challenge going forward will be to find certified solutions to appease regulators, while turning to experts for AML and KYC procedures, leveraging the best technology and security software to protect players’ identities and transactions.