The payments landscape for the gaming industry is changing. New products -such as NFTs and cryptocurrency- are coming to market; operators begin to explore the potential of digital wallets and new alternative payment methods; and the land-based sector turns to cashless wagering as a new way to engage customers and drive profit.
Navigating this new reality is no easy feat for industry players. “Delivering to the last mile is always the biggest challenge in payments,” Kamran Hedjri, PXP Financial’s Founder and Group CEO tells Yogonet. “It can make or break the player experience and have a direct impact on a business’s bottom line.” Companies seeing the impact of offering appropriate payment services are now increasing their interest in this issue.
In conversation with Yogonet, the expert details PXPF’s expansion in the US market as well as the company’s entry into Ontario in Canada. The company’s CEO also reflects on a recent ICE London participation and discusses new products and novelties within the payment landscape, and how this impacts both industry and regulation.
As the land-based sector bounces back from the pandemic, with casinos now once again operational and seeking to renew their offerings by leveraging new technology, such as cashless wagering, what are the main demands from operators seeking to digitize their in-store payments experience? And as online gaming keeps gaining a global presence, what are the main inquiries within this space at the time?
With the changes in regulations enacted by the Nevada Gaming Commission, the door has finally opened to cashless wagering on casino floors. Land-based gaming operations are now looking for innovative solutions that will allow players to use mobile device to fund table game wagers without withdrawing cash from an ATM or redeeming tickets and chips. They’re also looking for a wider variety of in-store APMs which can ensure a smooth experience in the casino, but also allow players to use any channel, whenever they like, and still get the same service.
One of our most notable upgrades last year was the update to our cage deposit solution. This cage solution is unique as it enables customers to deposit and withdraw money to/from their gaming account at any physical location. This works by giving the teller access to our backend tool for processing transactions, essentially turning a teller into an ATM for traditionally cash-focused customers who want to keep playing. This makes it faster for the end-user to get back into the game.
Meanwhile, online we’re seeing growing demand for personalization, new APMs (tailored according to demographics), crypto, closed-loop payment options, truly omni-channel experiences, strong risk engine and regulatory compliance.
Many operators are turning their eyes to the US industry, amid the boom of sports gaming and a land-based sector recovery. As the payments landscape also grows in this market, in which PXP has been active since 2013, what is the company’s current position within it and how might it be of assistance to partners there?
In 2021 we continued our ongoing expansion across the US iGaming and Sports Betting sector while supporting our customers with new licenses, new technology, features to drive conversion, personalization and loyalty, and new payment options. By offering a full-gateway service to iGaming operators, we’ve helped our customers navigate a complicated region and expand into new territories across the US. Everything from improved/new UI features that are more optimized for mobile to an improved convergence of channels.
The US has stringent licensing processes and tight timelines for each state, making it difficult for new companies to navigate. PXP offers its customers a flexible, multi-level service that utilizes its experience operating in multiple states. This includes management and compliance with the regulatory environment on a state-to-state basis, with comprehensive payments solutions that make cross-state payments simple for both the partner and end-user.
PXP is able to adapt to the changing needs of its customers to secure licenses and rollouts into new states while navigating the regulatory gaming landscape. Customers are provided with a compliant system ahead of launch, so they can operate immediately as they launch in their target state. This has secured a way for iGaming operators, casinos and sports bookmakers to offer their entertainment fast and free of restrictions.
The speed of our expansion in the US is thanks to the fast and reliable integration of numerous new partnerships into the region that required operations in different states, with cross-state payments and support with regulation compliance. The US is a new market for gaming/payment companies and it’s only through the experience and talent of the team at PXP that the company has been able to help many newcomers make their mark.
What can you tell us about the recent company expansion to Ontario’s newly regulated market in Canada? Meanwhile, Nevada approved remote verification for cashless casino wagering accounts in January. What’s your take on this decision, and how do you expect this to impact the US largest gaming market?
Ontario is the next key territory for sports betting. As the largest populated province in Canada, representing 40% of the population, it is the ideal base from which PXP Financial can help shape the future of online gaming in the country. Sports betting in Canada is expected to increase by billions in the next five years and our launch into Ontario is set to be the blueprint for a new online gaming framework, which will set the trend for overall gaming regulation in Canada.
We welcome the decision in Nevada and see it as an important step to simplify the access to casino entertainment and improve customer experience, without losing sight of security in the process. It is best practice for many sectors and will enable further innovation with customers in mind. We expect this to be an important step in introducing similar regulations across all states with time.
PXP Financial participated in the latest edition of ICE London, held 12-14 April at ExCel. Which were the main company objectives for this event, and which would you describe as the main takeaways?
After such a long hiatus it’s great to be able to catch up with our contacts in person. One of our objectives for the event was lead generation, and we were lucky enough to meet with providers and potential customers.
The PXPF team was at the event, sharing some of the exciting news from the past few months, including our new partnership with Esports Entertainment Group, a full-stack esports and online gambling company, and our expansion into Canada. In the second half of last year we also announced a partnership with leading provider of integrated payment processing and technology solutions Shift4, as we expanded our capabilities in the US market.
The team brought back some valuable insights from the show, importantly around the increased focus on esports, customer protection and artificial intelligence (AI). Casinos are already using AI in marketing, automation, fraud detection and predictive maintenance, so it will be interesting to see how it will play a role in payments as the digitization of casinos continues.
There are also increasing conversations about the metaverse being utilized in gaming, and I think this is the next logical step for the virtual casino experience, so we’re excited to see meta-gambling unfold and gamblers embracing cryptocurrency. As well as these technical topics, it was encouraging to see diversity and inclusion in the spotlight too.
What did this participation mean for the company in terms of its business strategy, and what opportunities did ICE open in terms of networking and conversations with potential partners?
So many key players in the entertainment space came together at ICE – it is the place to meet with current customers and providers, but the networking program also enables new opportunities. This is particularly important as we continue our expansion in the US.
Last September we celebrated three successful quarters of growth in the US iGaming and Sports Betting market. We are now licensed to process payments in 17 US states from being licensed in just one state in January 2020.
We were able to meet lots of potential customers and talk to them about our offering, so it has been a very successful show as always.
This edition saw an increased presence of fintech companies when compared to previous events, amid new developments in payment tech for blockchain, digital wallets, and more. Did you find attendees interested in learning more about new solutions within the payments sector? How can PXP Financial help its partners accomplish a solid payments experience within this changing landscape?
Delivering to the last mile is always the biggest challenge in payments. It can make or break the player experience and have a direct impact on a business’s bottom line. Entertainment companies understand this, so interest in payment services is constantly increasing as they search for ways to improve the cashier experience for customers.
We know they are actively looking at the potential of digital currencies as well as personalization, open banking, digital wallets and new alternative payment methods – all areas in which PXPF has in-depth knowledge and expertise.
We can help by providing an end-to-end payment solution – gateway, aggregation, acquiring across channels, plus add-ons such as data analysis and insights, tokenization, and checkout pages. Our goal is to make the player experience unique across all channels, and we have some exciting new features coming to our portfolio later this year.
ICE London featured a keynote session from UK Gambling Commission’s CEO Andrew Rhodes, who discussed “novel products coming to market” such as NFTs and cryptocurrency, with regulators still in the process of “changing how we regulate and deal” with them. Do you expect the regulatory landscape for payments and currency in the gambling industry to change along with these trends? What are your expectations in regards to the upcoming white paper on the gambling act review?
Regulation inevitably follows innovation, so yes, payments rules in the gambling industry are going to be subject to major changes in the coming years, and payment industry stakeholders’ expertise and cooperation will be increasingly valuable to gambling operators and regulators. As more sectors, including gambling, look at adopting digital currencies, the role of regulation will be to ensure a safe environment for customers to use payment methods according to their preferences.
The Government’s Review of the Gambling Act 2005 aims to ensure gambling regulation is fit for the digital age and it is exploring the potential consumer protection benefits and risks offered by new payment methods, and technologies like crypto and blockchain are likely to be subject to the most intense regulatory scrutiny in the coming years.
We look forward to seeing the white paper based on the review in the coming weeks. Given the current challenges across the globe, we hope it will take into account the impact of the pandemic and focus on protecting the vulnerable, creating a safe environment for players while supporting the industry to build around player experience.
What other industry events does the company plan to attend this year?
We will be attending a number of North America-focused events, including SBC Summit North America, SIGMA North America, global gaming expo G2E, and in Europe you’ll see us at iGB Live in Amsterdam, SIGMA Malta and SBC Summit Barcelona.