Appetite for disruption: Part One

Trustly’s Pay N Play has emerged as a solution capable of enhancing KYC processes and reducing abandonment when registering players. In part one of this feature, Trustly sets out the need for such a solution while some of its clients discuss its effectiveness, and we tackle the issues that have arisen in promoting such a product to the end user.

While trends such as customer adoption of in-play wagering and gambling via mobile draws the industry’s attention, much less scrutiny has been paid to the industrywide trend of operators outsourcing core functions to third parties.

This has seen trading, once crucial to any sportsbook operator, being handled by third-party service providers. Games development is already almost entirely handled by external studios, to the point that it’s more unusual for a B2C business to build games in-house than it is for them not to. It’s less a case of operators de-skilling, and more a case of bringing in efficient and effective ways of doing things, allowing businesses to focus on elements such as marketing and, increasingly, customer protection.

Customer registration could soon become the latest operational element to be outsourced if a new product from Swedish financial technology solutions provider Trustly manages to secure a foothold in markets beyond the Nordics.

Pay N Play, as with any industry innovation, is new way of carrying out an existing task, but while it does what any payment provider has done since the industry’s early days, it does it more efficiently and effectively than before.

A new player goes to a site that’s integrated with the solution. Instead of filling out registration forms, he or she clicks ‘Play now’ and makes a deposit from their online bank account via Trustly. The “secret sauce”, as Trustly’s head of gaming accounts Vasilije Lekovic puts it, is the KYC solution.

“One of the best parts of [the KYC solution] is it uses data that’s already been verified,” Morten Madsen, chief marketing officer of Global Gaming, an early adopter of Pay N Play, says.

“It’s just so much more secure than the player entering it themselves in the traditional way.

“With a traditional set-up, you register, link your credit card, and deposit – the KYC doesn’t happen until the customer withdraws money,” he says. “We do KYC straight away so we don’t have ineligible players, such as minors, gambling.”

Gaming Innovation Group (GIG) chief marketing officer Tim Parker adds that with Trustly already a popular payment solution, Pay N Play has helped consolidate its position as the preferred method for players. It has grown so popular that GIG’s Thrills brand offers Pay N Play as the exclusive method for deposits and withdrawals.

“The best proof of Pay N Play’s success is we now have over 60 operators live,” Lekovic says. “Some are even launching entirely new brands around this concept.”

Shock of the new
With 60 Pay N Play-powered sites launched since the solution went live, uptake has been relatively quick.

Operators using the solution have secured licences from the Malta Gaming Authority, Sweden’s Spelinspektionen and the Estonian Tax and Customs Board, and is set to move into Denmark in the coming months.

A number of operators, including GIG’s Thrills brand, have developed brands around the product. Raketech is working on the roll-out of Rapidi. Madsen, meanwhile, notes that Pay N Play is responsible for “a significant percentage” of Global Gaming revenue.

However, Pay N Play’s spread has not been seamless and Lekovic admits that Trustly has faced challenges in educating regulators about the solution.

“It hasn’t always been smooth sailing,” he says. “But before we launch in any market we first speak to the regulatory authorities. We’re a licensed financial institution so we go through all the correct channels.”

He reveals that when Pay N Play was first presented to the Malta Gaming Authority, the regulator simply didn’t understand it. After all, a solution widely advertised by operators as a ‘no account’ solution – something Trustly is looking to discourage – is unlikely to receive a regulator’s blessing.

It was a case of comparing how it allowed operators to onboard players to the same process set out in the island’s gaming regulations.

“The existing [registration process in Malta] has a lot of elements that can be interfered with, but with Pay N Play you could deposit with two-factor identification and have the KYC data coming from the bank – and you cannot easily trick your bank,” Lekovic says.

Marketing issues

Even when the solution is licensed, Pay N Play clients still find themselves with a tricky issue of how to present the product to clients. After all, trumpeting an easy registration process will not necessarily draw in the punters as much as special offers or highlighting the games available.

Equally, describing the solution as offering ‘no-account’ or ‘no-registration’ gaming is unlikely to be well received by anti-gambling activists and even a significant number of players.

Spelinspektionen general director Camilla Rosenberg has even told iGaming Business that operators have been warned against giving the impression that they can play without registering, which is required under the Swedish Gambling Act.

Global Gaming did initially present its Pay N Play-powered offering as a no-registration or no-account solution, Madsen admits, if only to hammer home the ease of use for customers.

However, he says marketing is shifting focus away from the existing no-registration angle, over fears that it could anger regulators.

It’s an issue that hasn’t quite been resolved. The general trend seems to be to develop new brands focusing on the speed of the solution, in Global Gaming’s case with Ninja Casino. It offers a stripped-back gaming experience, with a series of slots, table and live dealer games put front and centre, alongside a boast of being able to process withdrawals in under five minutes.

This approach goes as deep as Global’s marketing strategy for the brand, with a focus on offering players an easy way to play rather than bombarding them with offers and promotions.

Such an approach may be effective in newly regulated markets such as Sweden, where new customers will appreciate the simplicity of the sign-up process. However, analysts have noted that Pay N Play has resulted in a high deposit turnover, leading to some hitting their mandatory spending limits quickly.

In established territories, ease of use may not be as attractive to players.

“But you don’t need to target the entire market,” Madsen says, noting that this is something gaming companies tend to forget. “You can be successful and profitable when focusing on a part of the market, and serve that part really well.

“[Pay N Play] is not something that works extremely well in the older demographics because it’s a high-tech product. It will have a higher penetration among ‘digital natives’ who are early adopters of new trends and technology.”

Yet a report by identity verification specialist Jumio, in partnership with iGaming Business, suggests there is a niche for Pay N Play-powered offerings to tap into. Jumio ran a series of operator surveys looking at abandonment rates across a number of igaming brands. Operator feedback suggested that about 16% of customers abandoned the registration process before completing, with 19% of those that completed it failing to make a deposit.

As Pay N Play effectively removes the registration abandonment issue from the equation by completing registration, depositing and customer verification in one step, it presents a solution to this.

Read the second part of Appetite for Disruption here.