SBC Digital Payments: Debating cryptocurrency’s role in payments orchestration

As cryptocurrency continues to grow in popularity, both as a trading commodity and a payment method, many operators are beginning to take notice of its potential role in payments orchestration, but are also noting its limitations.

During a FinXP-sponsored panel session at the SBC Digital – Payments event entitled ‘Why Payment Orchestration is a Game Changer,’ the topic of cryptocurrency as a payment method took a central role in the discussion.

Moderated by Tony Craddock, Director General, Emerging Payments Association, the panel recognised the potential of cryptocurrency as part of a wider payment orchestration strategy. 

Nonetheless,three of the four speakers were apprehensive about its use, pointing to fluctuations in value as well as its decentralised nature in particular.

Phillip Wilson, Chief Operating Officer at Carousel Group, stated that cryptocurrency was appealing to him on a ‘personal level,’ due to the decentralisation involved as well as the traceability of funds and the instantaneousness of payment. However, he shared some concerns about its role in payment orchestration, identifying a ‘number of challenges’ for its use by businesses.

“I think the unfortunate thing with cryptocurrency is that it has such potential power, but the only way we’re going to be able to integrate it into business is to lose some of that power,” he began.

“It’s going to probably have to be more centralised, more controlled, more transparent. In terms of where the funds have actually come from in the first place, it depends on the person’s reason for holding the currency in the first place.

“If they’re holding currency because they don’t wish to pay taxes on it, then you’re never going to get documentation on the source of funds and therefore you’re never going to be able to take that transaction.”

Sharing his views was Owen Tustin, Vice President of Client Relations Gambling and Digital Payments at Nuvei, who highlighted the regular changes in the value of cryptocurrencies such as Bitcoin as offsetting some of their benefits for both customers and businesses.

“Do you really want to be spending what could be thousands of dollars on a bet that once on one day was only going to cost you $10?,” he said. “It should, in theory, be able to answer one of the big questions that we would all love – a payment methods that you could just offer globally, instead of having all these different payment methods, all these different types.”

He continued: “In theory it should tick all the boxes but as everybody’s highlighted here, there’s a lot of things that go against that.”

Christian Reinheimer, Group Director Payments Product at LeoVegas, also recognised the positive and negative elements of including cryptocurrency in a wide payments orchestration policy, but overall sided with the opinions of Wilson and Tustin.

He stated: “On the one hand there is the full traceability of movement of funds, and you can know where exactly it’s come from, but then you can’t, because a lot of it is not necessarily identifiable or adjusted to an identifiable person.

“I think one of the issues that we have is that we in the industry that we are in, in iGaming,  we live with a lot of requirements when it comes to KYC and when it comes to AML to make sure we know, as Philip has already mentioned, where does the money come from that we are using on our platform, while the targets of Bitcoin is to have it completely transparent.”

Offering a different perspective was James Davies, CIO of Coindirect, who acknowledged that although there is a ‘little bit of volatility’ around the crypto space, overall the coins are ‘solid and predictable,’ and have potential for use as part of wider payment orchestration.

He stated: “Everybody who looks at cryptocurrency from the outside looks at it for payment rails and transmission of price, and they look at it through a Bitcoin lens. We do maybe some days millions a day in transmission from Asia to Europe. and we do it mostly with USDT tether.

“We on-ramp in an Asian country in USDT we can off-ramp in Europe to euros. We carry very little volatility risk and on a very good day with a premium we might beat the FX rate wholesale.”

He continued: “There’s lots of capacity and capability in that marketplace, and the answer is that it’s not going to be Bitcoin that’s going to drive payment adoption and the use of payments out of cryptocurrency, it’s going to be some of the stable coins.”

Other topics of discussion included the benefits of in-house payments orchestration versus outsourcing, as well as the general importance for betting operators to understand the complexity of orchestrating and managing the payments process.

Tustin concluded by saying: “The biggest take away I’d recommend to people is – do not underestimate the complexity of payments and what’s ahead of you. As and when you grow and expand, make sure you do your homework.”

Register for a free access pass and find out more about the event at the SBC Digital Payments website.