During the COVID-19 pandemic, lockdowns, online shopping, and a widespread germophobia have accelerated the transition towards all sorts of digital payments. Digital payment adoption continues to rise as companies and consumers progressively shift to e-commerce and digital purchasing habits particularly millennials and Generation Z, who have fully adopted electronic wallet services, P2P payment apps, contactless payments, and even digital uses of credit such as BNPL (Buy Now, Pay Later).
Value-added services may assist digital payment providers, processors, payment platforms, and even retailers to stand out and develop new, diverse income streams as competition heats up.
The iGaming industry, which has always been known for pushing the envelope for innovations and has always been quick to adopt the latest technological advancements, is one of the several markets that have significantly benefited from the adoption of digital payments. As the industry expands at exponential rates, especially after the COVID-19 pandemic, with players now being able to place online bets on major sports events, track lottery results, and play a wide variety of online games, this quick adoption of electronic payments has allowed iGaming operators to attract new generations of customers and expand an already growing industry even further.
In 2020 and 2021, banking institutions and companies from multiple industries made digitization a major priority, and this shift is giving rise to digital payment platforms all across the world. Consumers are also digitizing their in-store and online purchases, ushering in new technologies such as contactless payments and digital wallets.
According to Insider Intelligence estimate, apps like Venmo and Zelle have risen in popularity, with volume reaching almost $400 billion in 2020 as a result of enormous user growth. The ability for iGaming operators to monetize their products will be enhanced by maturing these payment systems, as increased volume has put the sector in a better position than ever to begin capturing income from these platforms.
What are digital payments?
Before we take a look at the payment platforms and services that are currently reshaping the financial world, let’s go over the fundamentals of electronic payment. Digital payment, or electronic payment, refers to money or digital currencies being transferred from one account to another using digital mediums such as mobile wallets and payment apps.
An electronic payment, often known as an e-commerce payment system, is a platform that allows two parties to conduct financial transactions via the internet. With this shift to online transactions continuing to accelerate electronic payment methods, companies and stakeholders are being forced to rethink their strategies.
Bank transfers, digital wallets, mobile payment applications, echecks, and BNPL solutions are among the types of online electronic payments available.
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Digital wallets
A digital wallet is a virtual wallet that stores a user’s credit or debit card information on their mobile device or personal computer. It can handle credit cards, rewards cards, and memberships, among other things. Because of its convenience and ability to reduce fraud, consumers are increasingly gravitating to mobile wallets.
By September 2020, for instance, 76 percent of consumers said they had expanded their usage of this payment option, with 43 percent saying they had increased it “substantially.”
Generation Z has a high level of adoption of digital wallets such as Apple Pay, Google Pay, PayPal, and other P2P services; this age group uses Apple Pay significantly more than other generations for digital payments and are quickly catching up to older consumers in their adoption of other digital payment services.
In the past two years, the iGaming industry saw a surge in the number of operators accepting digital wallets as a deposit and withdrawal method, in part because these platforms make up for much faster transactions, with funds being made available almost instantly.
Payment apps
Mobile digital payment applications allow users to send money to another person or corporation using a mobile device such as a smartphone or tablet. In 2020, the leading P2P providers reported a double-digit increase in monthly app downloads, a trend that lasted throughout last year, with 30 percent of adults in the United States joining up for new P2P platforms in the first half of 2021.
Machine learning and artificial intelligence are two of the many technologies that enable these applications. Machine learning technologies can examine and enhance these experiences as consumers continue to make purchases with payment apps. This enhanced user experience guarantees fraud protection and improved security.
Some of the most popular mobile payment apps include Square Cash, Venmo, Zelle, and Cash App, and even Meta, Facebook’s parent company, has endeavored into this new trend. Most of these apps have been adopted by iGaming operators in an attempt to attract customers of different age groups.
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