Australia is home to one of the world's most vibrant and fast-growing online gaming markets. It's expected that by 2027, 7.3 million people in Australia will wager online, creating a market worth US$13.45 billion. That's a 6.90% CAGR over the next five years.

Yet success is not guaranteed for gaming firms despite this growth. Fierce competition prevails, with innovative brands like Dabble pioneering fresh approaches and overseas companies aiming to challenge the industry's established stalwarts.

Gaming firms must also know about changing customer preferences, economic conditions, and regulatory oversight. In short, gaming operators must be agile and keep one eye on what's next. 

Now, the need for agility becomes particularly pronounced when it comes to payments. Online gaming represents a high-risk industry, amplifying the complexity operators face as they endeavor to align with customer preferences, navigate changing regulations, ward off losses from fraud, and control the costs associated with payment processing.

That's why many brands are taking the strategic decision to invest in their payments. They're transforming them from cost centers into strategic functions crucial to business success. And they're using Primer's Unified Payments Infrastructure to do this. 

Our Unified Payments Infrastructure removes the legacy payments complexity that's historically challenged these businesses. This allows them to respond to changing customer, economic, and regulatory dynamics faster. And most importantly, it's allowing them to look beyond the challenges and focus on the opportunities that fast, seamless, and high-performing payments unlock.

Let's look at four payment-related challenges all gaming operators in Australia face and how Primer can help.

Responding to changing regulatory requirements

Regulatory scrutiny and change are a constant in the online gaming industry, often forcing firms to make significant operational changes. Take the recent move by Australian lawmakers to ban the use of credit cards when wagering online as an example. 

Few argue this is a wrong move in the effort to create a healthy and sustainable industry. But it's caused headaches for gaming operators who’ve had to figure out how to block credit card payments to stay compliant. 

It sounds simple. But this is payments; simple very rarely enters the vocabulary. And in this instance, many operators found they didn’t have visibility into what cards customers were using to fund their accounts. This left them scrambling to work with their acquirers to get that data. 

But that was only half the job. Operators then needed to block these cards. Again, this is easier said than done, with many needing developer resources to build logic in the backend to stop these payments. Even after all that work, operators cannot be sure they’re staying compliant and blocking all card transactions.

Meeting customer payment preferences

The consumer demand to use alternative payment methods is as strong in the gaming industry as it is across other verticals. Offering customers the ability to use digital wallets, like Apple Pay and Google Pay, is non-negotiable to make it as easy as possible to fund their accounts and place their bets. This is especially true given that 42% of bets occur on a mobile device.

However, consumer preferences are dynamic and continue to change. For instance, PayID, the domestic account-to-account payment method, is growing in popularity and something operators should consider offering. And the next popular payment method is likely already on the horizon.

This is a challenge for gaming operators who struggle to add new payment methods without significant developer involvement. Anecdotally, I know of several providers who spent months trying to add a new payment method, falling behind their competitors in the process.

Managing increased payment processing costs and acquirer relationships 

It’s staggering how many Australian gaming operators only use one payment processor. It’s not wise in any industry to put all your eggs in one basket. But it's a recipe for disaster in a high-risk sector like gaming. That’s because of the appetite of payment service providers (PSP) to work with high-risk changes—usually quite often. 

The nightmare scenario is they’ll stop processing high-risk businesses together. It’s easy to think that it won’t happen. But I’ve seen it happen several times, and suddenly, certain gaming operators could not process payments. In other words, they couldn’t do business. 

If the nightmare scenario doesn’t occur, relying on one PSP poses other risks. There is the cost of processing. PSPs always charge a premium to process high-risk transactions and can increase these costs as their risk appetite changes. In this situation, gaming merchants can easily find themselves paying exorbitant processing fees that impact the bottom line.

Learn more about why a multi-PSP strategy is key in today's online economy.

Preventing chargeback fraud 

Losing a bet is never a pleasant experience. Most people gracefully accept their losses and look forward to better luck tomorrow, but others will game the system by initiating a chargeback.

The gaming industry globally is one of the worst affected by chargebacks. And even if these aren’t successful, they are expensive. PSPs tend to pay upwards of $20 minimum to handle a dispute, which can increase steeply if successful. The PSP will pass these costs onto the merchant, eating into profit margins.

Betting on payments to drive success 

Investing in modern payment infrastructure is not merely an option but a necessity in an industry characterized by constant change and competition. By betting on payments to drive success, operators can focus on the opportunities that fast, seamless, and high-performing payments unlock while ensuring compliance, safeguarding against fraud, and satisfying their customers' evolving needs. In this dynamic industry, the smartest gamble is an investment in payment excellence.

Get in touch to learn more.