Staying at the forefront of innovation requires companies to stay up to date on two things, technology and regulation. Veiko Krünberg, Co-Founder and CEO of XGateway, a payments technology specialist, argues that stakeholders cannot afford to wait for regulatory change to seize on technology opportunities.
Focusing particularly on stakeholders in the betting and gaming industry, Krünberg shares his views with Payment Expert ahead of the Payment Expert Summit in Lisbon, where XGateway will be exhibiting.
Speed is crucial in the iGaming world
Various payments technologies have potential for reshaping how operators engage with customers, he observes, such as Open Banking and digital assets, including cryptocurrencies in the case of the latter – though he also notes it is important not to see these as ‘one and the same’.
He says: “Overall this digital space and especially this free market, Open Banking included, opens a totally new venue for forward thinking payment processes to come in and improve the services for the end users, and for the merchants as well. It becomes less costly and much more convenient.”
Betting firms have been eyeing up how to utilise digital assets, and the blockchain technology they are based on, for some time. For example, global gaming operator Entain has invested significant sums in exploring blockchain, along with other innovations, whilst firms like Canada’s Rivalry have gone as far as to launch their own native tokens.
Many more actively allow customers to place bets using crypto. For the most part, however, crypto betting is still a nascent development and many regulators have yet to fully address it. The full potential of blockchain-based betting has not yet been fully uncovered.
Speed is everything in iGaming payments. It can often be a deciding factor for customers – if a company takes too long to process a deposit and, even more importantly, a withdrawal, there is always the chance merchants will find a partner who offers a quicker process. At XGateway, the firm has been exploring how Open Banking and blockchain can be combined as winning technology.
“Speed is crucial in the igaming world, where players expect immediate access to their funds,” Krünberg tells Payment Expert. “XGateway is leading the way in combining the Open Banking framework with sophisticated technologies such as blockchain to transform the payment experience in the iGaming industry.
“As an example, for crypto, our platform supports instant BTC processing, unlike traditional Bitcoin transactions that might take up to 30 minutes waiting for block confirmations. This means players can deposit and start playing, or withdraw their winnings, without unnecessary delays, enhancing their overall experience and trust in the platform.”
For many, the most obvious benefit of cryptocurrencies is as a payment method. Its significance for payments or value transfer should always come first, Krünberg agrees, but he adds that there is also much value to be unlocked in how digital assets can enhance the player experience.
Ultimately, the industry will have to adapt to whatever regulations come its way when it comes to cryptocurrency, and how crypto and betting can engage one another. Regardless of prospective changes, Krünberg remarks, “I wouldn’t underestimate the potential of digital assets in iGaming fueling gamification and loyalty programs”.
Offering an example of how tokens can play a role in loyalty programmes, Krünberg explains that customers could earn tokens through on site activity, and swap them for free spins on games. This is a process some operators and gaming suppliers have already been experimenting with.
“I’d argue that what I think is interesting about digital assets and cryptocurrencies is the gamification aspect,” Krünberg says, projecting that blockchain and smart contracts can ‘open so many doors’ for the iGaming sector desperate for innovation.
“There are a lot of similarities on the foundational level to the iGaming space,” XGateway’s CEO continues. “I’ve been working in Web3 for a few years, and it’s an interesting space in terms of how they gamify around the launches and scale up these projects.”
“When these two merge their forces this can yield, I think, interesting and potentially very big outcomes for businesses in both industries. Imagine a world where every iGaming operator has their own rewards token which can be freely tradeable, this creates a totally new sort of ecosystem for the operator.”
Driving Innovation Beyond Regulation
For blockchain and crypto to really take off in the gaming industry, interest needs to be courted from all relevant stakeholders, however, XGateway’s CEO adds. Krünberg notes that attention needs to come from customers, from operators and developers, but believes there is enough interest from the necessary parties for the ecosystem to grow.
Of course, the ecosystem will also need regulatory progress if it is to grow. The development which seems to be catching most attention across the industry at the moment is the EU’s Markets in Crypto-Assets Regulation (MiCA), whilst the Digital Operational Resilience Act (DORA) will also come into effect in early 2025.
This regulatory change is undoubtedly welcome, and necessary to ensure crypto, blockchain and gaming are moving forward in unison. Preparing for regulatory and technological changes is something XGateway has taken to heart, with Krünberg emphasising that security and compliance are ‘integral to our operations’.
“We’re meeting, and routinely exceeding, the standards set by regulations such as the forthcoming DORA, which will introduce new rules for ensuring the resilience and security of digital financial operations across the EU,” he adds.
“This commitment enhances our platform’s ability to withstand and respond to today’s cyber threats. Additionally, our integration with advanced KYC processes ensures compliance with regulatory requirements while also providing a seamless onboarding experience.
“For example, if a player has already completed KYC on another platform, that verification is automatically recognized by XGateway, reducing friction and expediting the process for both operators and players, all while maintaining the highest levels of security and regulatory compliance.”
The fields of payments and betting are both going through substantial change, much of it regulatory driven, other times technology driven. Regulatory clarity is being gained day-by-day, and enforcement of these regulations is not too far down the line.
The various changes payments and gaming are dealing with will ultimately be good for businesses and consumers, Krünberg, remarks. However, businesses should not wait for regulatory change to start exploring the possibilities technology like blockchain have to offer, he says.
In the high-stakes world of igaming, the agility to react is crucial, he asserts. In XGateway’s case, the firm is ‘always looking ahead’, such as integrating new payment methods, enhancing security protocols, and improving analytics. Businesses that fail to seize tech opportunities will inevitably fall behind.
He continues: “I think that change is a good change, for everyone, including the end user, the service providers like us, we need to make sure that we are making the right decisions and the right collaborations happen.
“Some businesses remain too rooted in outdated thinking and fail to nurture innovation, which will ultimately leave them behind.”
Making the most of the future of payments
With rapid change often comes risks, however – this is a no brainer. This applies to digitisation just as much as it does to any other major process, and betting operators seeking to to leverage new technologies need to keep said risks in mind.
Firms should look at these changes in the context of a risk-reward sense, and remain alert to any potential challenges. As many areas of digital payments, whether blockchain or otherwise, are still relatively new, operators run the risk of opening a door to some threats.
As payments become more digitised and we move away from rigid methods like traditional credit cards, new opportunities emerge.
It’s inevitable, the interest and benefit of digitisation and exploring these new ways of transferring assets is interesting. Operators will do it, and it does open the door for things to go wrong, because it’s still a fairly new area.
Mitigating risks in the digital asset space requires a multifaceted approach, in the opinion of XGateway’s CEO. One effective method is diversifying storage, ensuring digital assets and data are distributed across multiple secure environments with distinct layers of protection.
By decentralising storage and utilising varied security protocols, XGateway reduces the risk of a single point of failure. This strategy mirrors the concept of spreading physical assets across multiple financial institutions, ensuring that if one system is compromised, others remain secure, thus bolstering overall resilience.
“It still happens that digital currencies have backdrops and can be exploited, but in the same way that you don’t get many bank robbers these days the same will happen with crypto,” he says.
“We’ve made significant strides in security over the past two years and continue to advance. With the right protocols and trusted partners, we ensure resilience against emerging threats.”
On the topic of data, protecting and sifting through vast sums of data is an important task for the modern igaming firm. As Krünberg puts it, ‘in this business, data is as valuable as cash’.
Turning away from blockchain, the conversation shifts to Artificial Intelligence (AI), now widely recognised as the ideal toolkit in companies’ arsenals – whether they be betting operators, suppliers or payments providers – when it comes to data management.
XGateway’s AI-driven solutions combine real-time transactional analytics with machine learning models, producing actionable insights that enable operators to make data-backed decisions quickly and efficiently. For example, its AI-powered VIP detection system doesn’t just identify high-value players, it predicts behaviours in real time, allowing operators to respond instantly with tailored offers or interventions.
“This proactive approach not only improves player engagement but also increases retention and boosts lifetime value by enabling operators to optimise their player relationships at key moments,” the CEO explains.
The future of payments is one of digitalisation. This is a hard fact to deny, and is one which the betting sector is feeling more than others. For the digitally-native world of iGaming, it is even more of an inevitability.
Krünberg projects that the payments landscape will look incredibly different in five years time, with methods like Open Banking and digital currencies will gradually take over from the traditional credit cards.
Addressing the risks that come with this will be crucial, but the rewards of a future iGaming sector defined by multicurrency, speed, security and seamlessness are rewards that cannot be ignored, he says. XGateway is positioning itself as a leader in this digital transformation.
“As digital assets grow and regulations tighten, solutions that balance flexibility with compliance will define the future of iGaming,” Krünberg explains.
“By constantly evolving our platform and integrating the latest technologies, we respond to more than just industry changes; we use them, ensuring our customers can move into the future of iGaming with confidence and success.”
So how should operators make the most of this future and seize the opportunities? In Krünberg’s view, this all comes down to the ambition each individual company has. What stakeholders need to recognise, however, is the competitiveness of the iGaming landscape.
Payments are central to user satisfaction in this context. Users want faster markets, faster gameplay – and faster transactions, particularly withdrawals. Keeping up to date with technological innovations will be essential to ensuring firms stay ahead of competition, whether this be blockchain, AI, Open Banking, or anything in between.
