LeoVegas Group’s Senior Director Christian Reinheimer, has spent 14 years in the payments space. He recently joined industry experts to discuss the state of payments in the igaming ecosystem – past, present, and the future of this make-or-break aspect of the business. Don’t miss this opportunity to tap into the latest insights!
You recently discussed instant payments and how they are reshaping the payments landscape. Why is this happening, and what can we expect going forward?
“Traditionally, the execution of money transfers has occurred in batches processed during banks’ office hours. The underlying networks connecting banks, such as SEPA (Single Euro Payments Area), were not designed for instantaneous transactions.
In today’s connected world, where consumers of online services expect immediate execution, waiting days for money to move from bank A to bank B is no longer acceptable. Transferring funds through traditional, non-instant networks also carries the risk of money being delayed or even lost along the way.
Newer networks, such as SEPA Instant or Faster Payments in the UK, enable transactions to be completed within seconds. No more bundling thousands of transactions into batches that are processed only during office hours. Money now moves instantly.
For years, instant money transfers were the privilege of digital wallets such as PayPal and Skrill. Today, consumers no longer need to register for such services or top up an eWallet to experience instant payments. They can simply pay directly from their bank accounts, where their money already resides.
Together with the introduction of Open Banking in Europe, which has enabled Payment Service Providers (PSPs) to offer payment services allowing customers to pay directly from their bank accounts, we can expect a shift in the adoption of e-wallets and payment cards in the near future.”
Will instant payments become the standard in the future, then?
“The adoption of instant payments is progressing very differently across European countries. Whether we look at instant money flows through card networks owned by Visa and Mastercard, or through bank networks such as Faster Payments or SEPA Instant, it ultimately comes down to the consumer banks that hold the funds. They need to be connected to these networks and start using them.
In Europe and the UK, there are more than 5,000 banks providing services to consumers, and getting all of them aligned with a new standard takes time. However, instant payments are undoubtedly becoming the standard.
Currently, the share of SEPA Instant transactions compared to traditional SEPA payments is around 15 percent, but the latest EU regulation, which makes it mandatory for banks to offer SEPA Instant by the end of this month, is expected to significantly increase adoption in the coming years. In the UK, the share of instant bank transfers is already roughly 70 percent.”
What about wallets? Seems like everyone is using it.
“Wallets” is a term used to describe many different things, so let’s start by making some distinctions.
An eWallet, a digital representation of money, holds funds that the consumer has previously topped up. The top-up can be done using payment cards, bank transfers, or, in some cases, peer-to-peer payments or cash conversions. Examples include PayPal and Skrill.
Apple Pay and Google Pay are also referred to as wallets, but unlike PayPal or Skrill, they do not hold any funds. Instead, they enable consumers to use their phones or wearables to make payments, with the money originating from a connected payment card.
While wallets such as Apple Pay and Google Pay have become very popular in recent years due to their simplicity and convenience, PayPal and Skrill have been losing consumer preference. This clearly illustrates that consumer adoption follows where genuine consumer needs are being met.”
If we have this discussion again in a few years – say, in 2030 – LeoVegas will be turning 18, and much will likely have changed since its inception in the Swedish market. Back then, instant payments practically didn’t exist, and wallets were still made of leather. What do you think will define the payments space in 2030?
“Instant payments will become the norm in Europe, while eWallets will maintain only a niche presence. Card networks will continue to exist, they always find a way to stay relevant, and the growing use of wallets such as Apple Pay and Google Pay will contribute to that.
Money transfers using blockchain technology will become commonplace. Popular cryptocurrencies, such as Bitcoin, will be held by a much broader share of the population, while many smaller coins are likely to disappear.”
