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Leading payment processor PXP Financial has a long heritage of driving revenue and enhancing player satisfaction in the gaming industry, and is proud work with some of the industry’s biggest names including BetMGM and Tipico.
Here, PXP Financial CEO and Co-Founder Kamran Hedjri shares his expertise on the payment strategies and trends shaping the player experience.
Please introduce yourself and PXP Financial’s offering for the gaming industry.
My passion for payments started in 1995 at Europay and developed further when I joined BWIN. I’m proud to say I shaped the company’s payment strategy and helped it gain more than 20 million customers and to grow in 27 countries across Europe, North and South America.
It was after this I established three companies: CQR Payment Solutions (gateway), CQR UK (acquiring) and Vincento (issuing). I’m now the Group CEO for PXP Financial, responsible for the overarching strategic direction of the business.
PXP Financial is an end-to-end omni-channel payment provider that helps businesses accept payments online and on-premise. Our portfolio of iGaming clients is drawn to the fact PXP was born from a gaming operator, so we have many years’ experience in running payment operations for Gaming business.
We offer an online and POS solution, alternative payments, collection services, card acquiring, risk management as well as a variety of value-added services, including checkout pages, reporting, revenue optimisation, tokenisation and dynamic currency conversion.
How is payment tech revolutionising the player experience, and what payment trends and innovations should gaming operators be capitalising on?
No-one wants to have gameplay interrupted, so the payment process must be seamless and friction-free. To this end, the gaming industry should continue to add the alternative payment methods (APMs) their players are using to platforms.
Beyond this, I would encourage developers to delve into the possibilities that GameFi and SocialFi present.
GameFi, or game finance, combines online gaming and decentralised finance to create a convenient in-game economy. It introduces the concept of play-to-earn (P2E), where in-game activity earns the player digital assets, rare items, and more.
SocialFi, meanwhile, is Web3’s answer to Web2’s social media problems by enabling users to have control over their content and allow them to directly monetise it.
If DeFi, GameFi, and SocialFi can operate together, bridging gaming and finance and redefining social interactions, we can build a metaverse where gaming isn’t just about play, but also about forging beneficial connections.
How are decentralised payments, such as cryptocurrencies, disrupting European and global markets?
The use of crypto in iGaming is steadily rising, but still lacks a comprehensive framework and remains banned in certain regions. Nevertheless, the intersection of iGaming and DeFi does hold some promise, with positive regulatory developments in geographies like Japan and the UK, and with the right regulations in place, stablecoins could become a crucial part of next-generation payment systems.
PayPal’s stablecoin launch is evidence that trends in payments are moving towards digital assets like stablecoins and CBDCs as a reliable payment method with no volatility that enables fast and low-cost payments. This will pave the way for a more stabilised crypto market, as well as give banks the confidence they need to react with their own digital currencies. Low cost and real-time settlements of cryptocurrencies and stablecoins have led the giants – including PayPal and VISA – to invest heavily in them and launch their own programs and solutions.
There’s no doubt the security of digital currencies makes them the ideal way to exchange the value of goods and services, and this will ultimately give consumers the freedom to buy from around the globe without worrying about the exchange rate of buying the host nation’s currency.
What are your predictions around the emergence and rise of crypto casinos?
As technology continues to advance and regulatory landscapes evolve, the crypto gambling industry is poised for significant growth and transformation in 2024. However, the growth of crypto casinos may be hindered by the fact they operate within the decentralised network and infrastructure of cryptocurrencies.
That said, DeFi protocols are revolutionising many industries, including finance and gambling. In 2024, the integration of DeFi in the crypto gambling space will enable trustless betting, transparent odds, and automated payouts through smart contracts. This integration will eliminate the need for intermediaries and offer players greater control over their funds.
As the crypto gambling industry grows, things like cross-chain compatibility and AI-driven personalisation will enhance the overall player experience, creating a more dynamic and rewarding environment.
What role are subscriptions playing in the growth of the global gaming market?
Subscription models have always been popular, but it used to be that the money would come directly from a player’s bank account – now subscriptions can be linked to a chosen e-Wallet. This convenience has led to a surge in global subscription-based gaming, a market that’s projected to reach $55.94 billion by 2031.
Subscription models mean players don’t need to keep track of when they need to pay; it comes out of their chosen payment automatically – leaving them free to play the game whenever they want.
How is the role of digital wallets evolving, and what are the advantages and risks that operators should be aware of?
While digital wallets come with a range of benefits for both operator and player, there are potential risks to be considered. For example, the two-factor authentication, and other rigorous verification processes used to mitigate cybersecurity threats can be time-consuming and add friction to the payment journey.
Furthermore, operators need to be mindful of the legal status of online gambling and digital wallets in their jurisdiction.
That said, the adoption of digital wallet continues to rise, with the total number of digital wallets set to exceed 5.2 billion globally in 2026, up from 3.4 billion in 2022.
Digital wallets offer many advantages for users engaging in online casino transactions. They provide an additional layer of security as they often use advanced encryption technologies to protect financial data, and because financial details are not directly shared with the casino there is an added level of privacy. Payments through digital wallets are also often faster compared to traditional banking methods, with deposits and withdrawals processed almost instantly, allowing users to enjoy a smoother gaming experience.
How is PXP Financial supporting its customers to take advantage of the rise in mobile gaming and changing trends in payment preferences?
The mobile gaming market is estimated to reach $315.90bn this year, and the number of players is expected to hit 2.32 billion by 2027.
Current trends emphasise the importance of optimising platforms for seamless mobile experiences, specifically, ‘invisible’ payments. This is particularly true in the gaming space, where players don’t want to have gameplay disrupted by making a payment.
Our offering for the gaming industry is grounded in our expertise and strong heritage within the sector, with several members of the team who are thought leaders in gaming payments in their own rights. We understand that providing smooth and convenient mobile payment solutions is crucial for meeting the evolving needs of modern gamers, and this mobile-first approach aligns perfectly with our company’s mission to deliver exceptional payment experiences to our valued merchants and their customers.
As user privacy and data protection continue to attract scrutiny from consumers, how can a payments strategy help to increase trust among players?
Payments and consumer trust need to go hand-in-hand if gaming platforms are to succeed. When looking at payment strategies that maximise trust, I strongly recommend that operators consider the advantages of open banking.
Open banking often comes with robust security measures. Customers can have confidence that their data is being protected and they have control over who can access their financial information.
Regulations and policies such as GDPR play a crucial role in ensuring consumer protection in the open banking ecosystem and are designed to strike a balance between encouraging innovation, competition, and consumer choice while maintaining data security and privacy.
Globally, which gaming markets are currently expanding and where should operators looking to grow place their bets?
Several Latin American countries have either launched or are set to launch licensing regimes for online gambling in 2024, while in Europe, Montenegro is an attractive proposition for iGaming agents thanks to government efforts to modernise its gaming laws and create a well-regulated field.
Similarly, UAE, North Africa and South East Asia are all working to create a more regulated and welcoming environment for iGaming operators, and I believe Nigeria and Kenya will be areas of particular interest, especially as they embrace Web 3.0 gaming.
Which regulatory changes do operators in Europe and across the world need to stay ahead of in 2024?
Governments and regulatory authorities have become increasingly focused on preventing money laundering and ensuring player identity verification. Online casinos are now required to implement robust AML and KYC procedures, which also extend to payment processing.
Furthermore, to promote responsible gambling, regulatory frameworks may require online casinos to implement features such as deposit limits, self-exclusion options, and other tools to help players manage their gambling activities.
Regulations will continue to tighten, and the rise of newly regulated markets will trigger new regional players to enter the scene.
Finally, which trend, regulatory change or payments innovation do you believe has the most potential to impact the gaming market this year?
It would be difficult to talk about any tech trend without mentioning artificial intelligence.
There are many ways AI have the potential to improve the iGaming experience. Not only can it analyse data and predict the types of new games players want to see or their behaviour, but it can also spot potential security threats.
Additionally, AI benefits online casino players as it can help provide customised in-game recommendations, rewards and bonuses to improve the overall in-game and user experience. Gameplay has never been more personalised or, combined with virtual reality technology, more immersive.
Operators can also leverage AI to help run their businesses more responsibly by identifying gambling behaviour and allocating patterns which indicate a player needs support, prompting operators to step in earlier than ever before.
Meanwhile, blockchain technology ensures secure and transparent financial transactions on iGaming platform, allowing players to independently verify game results and ensuring the outcome was not manipulated. Furthermore, on the blockchain, all gaming transactions are recorded in an immutable and tamper-resistant manner.
The combination of AI and blockchain technology will be a game-changer in 2024.
By bringing AI and blockchain technology together, operators can create personalised experiences, improve customer support, enhance player engagement and increase conversions, all while bringing much-needed transparency, security and decentralisation to the industry.
