Max Emilson, Chief Revenue Officer at TrueLayer, spoke to Payment Expert about the role open banking can play in boosting payment efficiency for the gaming sector, as well as how the significance of verification strategies has elevated.
Payment Expert: Are you able to tell us about Truelayer’s open banking offering and what sets it apart?
Max Emilson: TrueLayer is an open banking innovator. In 2016, our co-founders Francesco and Luca saw that the regulatory changes occurring in the UK and Europe would set the foundation for new ways to provide financial services. We’ve now built a network on open banking rails across the UK and Europe and on top of that, we’ve built deeper solutions which solve more complex problems for clients, including our newest payment solution, PayDirect.
Unlike other opening bank payment providers, we’re API-first. With PayDirect, no passwords are stored and consumers don’t need to share their credentials, making it much more secure than methods like screenscraping.
Also, unlike other solutions on the market, PayDirect is customisable to the operators’ brand. That means the customer will only see their brand when they’re paying, and on their bank statement afterwards. This helps increase customer trust and ultimately, conversion.
PE: How crucial can the relationship between open banking and gaming be in terms of creating the best user experience?
ME: Open banking can deliver a fundamentally better experience. That starts with onboarding where the trend is towards seamless and frictionless signups. When YouGov surveyed more than 3,000 iGaming players in Europe, 65% of respondents said they would not tolerate a signup process which lasted more than five minutes.
Then you have the ability for players to instantly fund their account from their linked bank and, as we’ve built with PayDirect, instantly getting their winnings. We know players want this – rapid deposits and payouts consistently topped the list of player priorities, with eight out of 10 players rating fast payments as important and our YouGov survey showed that, in five out of six markets surveyed, players consider fast withdrawals to be in their top two priorities.
On average, operators see customer deposit increase by up to 29% using TrueLayer/open banking compared to Card and PayPal. We also find it has the added advantage of being an incredibly sticky method and once a player uses open banking to deposit funds, they tend to stick to this payment method due to convenience.
PE: Has the climate for identity verification changed since the start of the pandemic?
ME: It has evolved as we’ve moved more of our daily lives online during the various lockdowns, which has highlighted where digital offerings have flaws or frustrating processes. Open banking can support the verification process. Currently, the European Gambling Commission requires players to confirm their age and identity to the operator within 72 hours before playing games or depositing funds. Open banking can reduce this to minutes by verifying the player’s bank account details matches their iGaming account.
PE: What role can open banking play in boosting retention rates for operators?
ME: Operators recognise that giving their customers the ability to deposit and withdraw funds instantly and seamlessly is essential to them having a great experience.
We know that slow payments are a long-standing source of frustration, complaints, bad reviews – and ultimately, customer churn. A recent study from YouGov and TrueLayer found that 60% of players are more likely to trust a provider that offers instant payments – and in the case of services like iGaming platforms, around half of customers are likely to switch to a provider that offers them instant withdrawals.
Trust in an operator is critical and that is why we’re seeing so much interest from operators in PayDirect. Unlike other methods, players are not redirected away from the operator to an e-payment interface, it all happens within the app, because the customer has authorised the operator to be a trusted holder of login and transfer credentials.
PE: Are you able to tell us more about what steps need to be taken to take the relationship between open banking and gaming to the next level?
ME: As more operators embrace open banking, players will increasingly expect faster onboarding, instant deposits, and instant pay-outs by default. Operators need to communicate why open banking is the most beneficial payments method – as we’ve already mentioned the speed, lower fraud and ability to gain instant pay-outs.
The average person doesn’t know what ‘open banking’ is or means and they shouldn’t, it’s a regulation. But when operators explain the benefits, we have found that players quickly accept it as the default option. We typically see that one in three customers choose the open banking payment option soon after it’s put into the checkout.
PE: Can open banking be pivotal in combating the growing threat of fraud for gaming firms?
ME: Absolutely. There are a number of reasons why open banking makes sense for customers. For one, they don’t need to remember card details. Instead, they authenticate with their face or fingerprint on their mobile device, instantly and securely. Plus, they’ll never need to update stored details if their card is lost, stolen or expires.
Because it uses secure bank-to-bank connectivity, using APIs, means there’s no need for users to share credentials.
PE: What impact will SCA implementation have on the importance of open banking for gaming operators?
ME: SCA is designed to make card payments safer. However, because it is being retrofitted into the existing card-based payments flow, it will result in some clunky workarounds and a poor user experience. That will negatively impact conversion, with some studies suggesting between a 20–30% drop off rate. That is good news for operators who offer open banking because the conversion differential between open banking payments and cards is likely to get even bigger.