Trends for 2025 that will impact gaming operators’ success

The gaming industry is dynamic, fiercely competitive and constantly evolving, writes Marc Cregan, senior director, gaming and cryptocurrency

As a former merchant and current senior director of vertical growth for gaming and cryptocurrency at Worldpay, I witness firsthand the intricate dance between innovation and operational efficiency that defines the sector. Today, I want to delve into the key payment trends shaping the industry, focusing on the strategies Tier-1 merchants are deploying and the critical role of safety and fraud prevention.

Optimizing payments

For Tier 1 gaming merchants, the name of the game is maximizing revenue while meticulously controlling costs. In this environment, even marginal improvements in authorization rates and cost reductions can translate into significant revenue uplift. This focus has driven a surge in the adoption of network tokens and, critically, mobile wallets.

Network token solutions, such as Worldpay’s Revenue Boost, which replace sensitive card data with unique digital identifiers, are proving incredibly effective in boosting authorization rates. By reducing the risk of fraud and data breaches, they instil greater confidence in issuers, leading to higher approval rates and a smoother customer experience. The account updater feature is also a big win for customer experience. As a merchant, I spent a great deal of resource getting customers to update lost, stolen and expired card details. Network tokens completely solve this.

The rise of mobile wallets, particularly Apple Pay, is significant. Apple Pay consistently demonstrates higher authorization rates compared to traditional card transactions because of its enhanced security and streamlined user experience. This translates directly into increased revenue for merchants. Integrating mobile wallets into the payment flow is now a key strategic move for Tier 1 operators.

Simultaneously, account-to-account payments are gaining traction as a cost-effective alternative to traditional card payments. By bypassing interchange fees and other associated costs, A2A payments offer value for merchants seeking to optimize their bottom line. Having been an early adopter of A2A payments in my merchant days, I’ve seen the growth and benefits firsthand.

Tailoring to regional preferences

The global gaming market is far from homogenous. Each region boasts its own unique payment preferences and cultural nuances. Recognizing this, savvy operators are embracing local payment methods to cater to their diverse customer base.

In Brazil, Pix has become commonplace, offering instant and convenient transactions. In Spain, Bizum’s widespread adoption reflects its popularity among mobile users. In Sweden, Swish’s mobile-first approach has resonated strongly with consumers. Similar stories play out across the globe, with Blik in Poland, Twint in Switzerland and Sofort in Europe all carving out significant market share.

These local heroes are not just payment methods; they are cultural touchstones, reflecting the unique preferences and behaviors of their respective markets. By embracing these local payment solutions, operators can build trust, enhance customer loyalty and drive higher conversion rates. In my experience, conversion rates live in the shadow of authorization rates. Merchants are unwittingly losing players by not offering their preferred payment methods.

Trust in a high-risk environment

In the gaming industry, where large sums of money change hands rapidly, safety and fraud prevention are paramount. Operators are under increasing pressure to safeguard their customers (from both fraud and gaming abuse) and protect their businesses from financial crime.

Visa’s Account Name Inquiry and Mastercard’s Name Verification Service are powerful tools in this arsenal. These services enable merchants to verify a cardholder’s name against issuing bank records, helping to detect fraudulent transactions and safeguard self-excluded customers.

Promotional abuse, a persistent challenge in the gaming sector, remains a significant concern. Malicious actors exploit such offers to generate fraudulent profits, undermining the integrity of the platform and eroding trust. Many operators are turning to AI based fraud detection tools to help combat this.

Merchants continue to wrestle with ways to reduce chargebacks, which often manifests through buyer’s remorse or “friendly fraud.” To combat this, Visa and Mastercard have introduced first-party chargeback defence options, providing merchants with enhanced protection against fraudulent chargebacks. As a merchant, this should be your first line of defence before investing in chargeback alerting tools.

The new normal

What was once considered cutting-edge technology is now the baseline. Customers demand seamless and secure payment experiences (which, let’s be honest, play against each other – less friction = more fraud), and operators are responding by embracing the latest advancements.

Gaming is a time sensitive market when it comes to payments. Many times, players are looking to bet on a race that’s about to start or an in-play match. In these scenarios, friction kills conversion: A strong customer authentication journey can take longer than a race, depending on the issuer.

SCA exemptions, which allow for frictionless transactions in low-risk scenarios, have become the norm. Customers expect instant deposits and seamless gameplay, and any friction in the payment process can lead to abandonment. As a merchant, I was terrified of PSD2 and what it would do to my authorization rates. Initial testing saw my authorization rates drop 15 to 20 percentage points, depending on geography. Worldpay’s Exemption Engine turned it into a nonevent for me. In fact, my authorization rates were higher post-PSD2.

Similarly, instant withdrawals have become a key differentiator in the competitive landscape. Gone are the days when a customer deposits instantly and gets their winnings in three to five days. Open banking, SEPA Instant, Visa Direct and Mastercard Send are enabling operators to deliver near-instant payouts, enhancing customer satisfaction and loyalty.

Conclusion

The payments landscape in the gaming industry is characterized by rapid innovation, intense competition, and a relentless focus on safety and efficiency. As we move forward, operators who embrace these trends and prioritize the customer experience will be best positioned to thrive in this dynamic and evolving market. Worldpay will continue to innovate and support our gaming partners as they navigate this ever-changing environment.

• Learn more about how Worldpay’s gaming industry solutions can help operators meet these challenges.