E-wallets and beyond: are cryptos the next step in online casino transactions?
Although the continued popularity of traditional banks remains undisputed, the rise of e-wallet companies is challenging the dominance of traditional banks within the online casino industry, which was worth almost $50 billion last year.
Here, we’ll assess why customers find e-wallet payment methods such as PayPal preferable to traditional banking methods in the online casino market, before we discuss whether cryptocurrencies and blockchain technology could herald the future of online deposits and withdrawals in the industry.
What forms of deposits are accepted at online casinos?
For many online casinos, credit cards and traditional banking options such as debit cards remain universal options for minimum payments and initial deposits. However, convenient and secure methods such as Skrill, Neteller and PayPal are also now widely accepted and have been disrupting the market for the past decade. In fact, the success of these e-wallets has grown to the extent that traditional banks have trialled their own e-wallet apps.
All UKGC licensed online casinos accept PayPal deposits. One of the biggest names in the industry, PayPal is an incredibly popular e-wallet payment method. Casinos that accept PayPal are often well regulated, with advanced security protocols and top-rated reviews, which means that well-established PayPal casino sites are often highly recommended.
However, at some online casinos, e-wallets are excluded as qualifying deposit methods for new customers, which can make them less appealing to some. But, once a customer has established themselves with a casino and has lost their “new customer” status, e-wallets can be used regularly, much like any other form of accepted payment.
Why use PayPal over traditional banking?
In effect, the PayPal logo acts as an unofficial seal of approval due to the company’s high security standards. PayPal services allow participants to make payments to an online casino without sharing their personal details with the provider, adding an additional layer of security to the funding process. As the data is secured via PayPal’s systems, the customer also does not have to continually input their own information to third party sites, too. This adds both convenience and safety to the process; something many customers see as a key benefit.
Additionally, when withdrawing and depositing money into online casinos, many customers have one primary benefit in mind: speed. By using an e-wallet, customers can receive their winnings far quicker; to the extent that withdrawing winnings from an online casino account using PayPal is often faster than collecting winnings in a physical casino, as winnings are deposited and transferred instantly.
Contrastingly, if using a traditional banking service, a customer may have to wait two to three business days for their transaction to clear into their account due to the volume of transactions between banks and casinos, as well as the checks required by both parties.
In addition to allowing the customer to receive their money instantly, e-wallets also provide the customer with increased choice. They can either transfer their winnings into their traditional bank account, or they can hold the money within their wallet for other online purchases. This allows the customer to keep their winnings separate from their usual income if preferred.
However, there are still drawbacks to using e-wallets like PayPal. For example, in effect, PayPal still acts as a third party to the transaction, meaning that, depending on the provider chosen, customers may be charged a transaction or payment fee. However, this is often not the case with debit or credit card transactions.
Are cryptocurrencies the future?
By harnessing the potential of the digital age, PayPal has successfully disrupted the industry. However, as the 21st century continues apace, other fintech solutions have appeared to further disrupt the market.
Notably, blockchain technology and cryptocurrencies such as Bitcoin have emerged as key rivals for current payment solutions due to the advantages they provide.
Additional security is provided because the blockchain is free from any form of central control, which means that it cannot be manipulated or modified by a singular person. What’s more, as part of the public ledger, the need for a third party (such as a bank or PayPal) is removed. Not only does this add extra security, but it also speeds up transaction times further and completely eliminates the need for the payment of any transaction fees, making deposits and withdrawals faster, easier and cheaper than ever.
Likewise, whereas a credit card may give a provider access to an account and personal data, the use of cryptocurrencies restricts the shared information. Instead, crypto payments are made via an encrypted selection of letters and numbers, meaning personal information including names, addresses and bank account details do not need to be shared.
However, this being said, cryptocurrencies and blockchain transactions are not without their risks. This means that, while crypto payments may be the technology of the future, further trials and pilots are required before the young payment solution reaches the mainstream.
By Ben Saunders