Why we can no longer ignore poor payments performance

Payments teams within the gambling industry find themselves juggling an ever longer and more complex list of priorities. The relentless search for new innovation to enhance customer experience means that payments professionals are continually looking to the future, while at the same time trying to ensure compliance, manage security risks and fraud, and keep the lights on in a payments ecosystem that is becoming more fragmented and fluid. The inevitable result is that payments teams feel stretched and unable to do any of these things as well as they would like.

We recently undertook global research exploring challenges and priorities for payments teams across a wide range of industries, including the gambling sector. The study examined the extent to which future innovation takes precedence over the optimisation of day-to-day payment operations and, where that is happening, the impact of this lack of performance on operators.

Alarmingly, we found that 50% of operators are currently losing revenue due to shortcomings with their payment gateway and a lack of performance across the payments ecosystem.

Currently, there is not a single area of payments where leaders in the gambling sector are fully satisfied with their performance – whether it’s their ability to analyse decline codes, optimise payment pages or develop an agile infrastructure.

Remarkably, only 22% of payments leaders in gambling are fully satisfied with their current ability to monitor fraud in real-time, a lower proportion than in any other sector.

This is a worrying state of affairs and payments leaders know it – almost two thirds (60%) recognise that they need to make significant improvements in payments performance over the next 12 months in order to avoid losing significant numbers of customers and revenue.

Performance pitfalls

The study confirms a trend that many in the industry are probably aware of but feel powerless to prevent – payments performance is too often shunted down the list of priorities, in favour of innovation and compliance obligations.

More than in any other industry, senior business leaders in the gambling sector are focused on innovation within payments, rather than current systems and delivery. Most payments leaders feel that business stakeholders don’t understand the value of optimising payments processes, nor recognise the benefits of an agile payment infrastructure.

Performance is also compromised due to budgetary constraints, a lack of technology and tools, and a dearth of strategic partners.

There is also a notable lack of data and insight to make decisions and optimise processes. More than three quarters (76%) of gambling payments leaders claim that analysing payments data is a challenge within their organisation; either they cannot access data in the first place, or else they don’t have the skills and tools to turn data into meaningful actionable insight which can drive performance.

Prioritising performance

The research suggests, however, that payments performance is starting to fall under the spotlight, as operators look for efficiencies and opportunities to drive margin in an increasingly competitive marketplace. Seventy percent of payments leaders in the sector report that they are coming under increased scrutiny from senior leadership to improve performance.

In order to do this, payments leaders have to ensure they have real-time visibility across their current payment processes and the skills and support to build a business case for investment. They need to provide evidence to senior leadership of the cost of poor performance and be able to quantify and communicate how improved performance will lead to improved financial outcomes for this business. When faced with these facts, business leaders will soon commit the investment and resources to optimise performance.

Without doubt, innovation will and should continue to play a central role in the evolution of the gambling sector, but forward-thinking payments teams will increasingly balance the search for innovation with a genuine commitment to ensuring that current payment processes are fully optimised to deliver a better user experience, drive loyalty and maximise revenue, today rather than tomorrow.

Jonas Reynisson is the founder and CEO of emerchantpay, responsible for the strategic direction of the emerchantpay business. Prior to his career at emerchantpay, he was the managing director of one of the local savings banks in Iceland for 13 years, chairman of a life insurance company, and a board member of one of the leading investment banks in Iceland at that time.