Blockchain technology has changed the technological landscape by providing an alternative to traditional technology models.
This change is present in payment systems that power iGaming activities. Players need to fund their accounts to play games, and the infrastructure has to be reliable to facilitate transactions. There are many problems with the current state of online payments. We have highlighted some of these problems and the solutions that blockchain has provided. Let’s begin!
Current Challenges in iGaming Payments
Operators and players are unable to perform seamless transactions with the current payment systems. Withdrawing and depositing funds is a big part of online gaming. This is why iGaming crypto excitement has picked up steam with the introduction of the blockchain. Here are some of the problems associated with iGaming payments.
Security Threats
The current security measures available to protect online payments are subject to attacks from bad actors. Phishing emails, keyloggers, SQL injections and other hacking techniques are used to attack iGaming websites. When these attacks are successful, it can lead to serious security implications for players. Loss of funds, personal data, and other negative consequences can deter new players from gaming online.
Payment Fees
When players make transactions online, they pay processing fees. These fees increase the cost of funding gaming accounts and create a barrier to entry. If players do not have enough money to cover the fees, they are prevented from gaming. The amount charged on fees is dependent on the payment processor used on the iGaming website. These charges usually vary between 1% and 5% of the amount sent to or from the website. These charges are listed and players can choose the most affordable payment processor. Some examples of Payment processors include Visa, Mastercard, Discover, and Maestro.
Slow Processing Time
The time it takes to send money between an iGaming website and your bank account varies. It could be as little as 10 minutes or as long as 5 days. The traditional payment infrastructure is designed with legacy technology that makes these processes slow. This creates a bottleneck that slows down the pace of playing and churns out users who cannot wait. Operators lose out on customers because of a factor that is beyond their control. The processing time depends on the payment method used. Card processors like Visa and Mastercard can take up to 3 days to clear.
Blockchain Solutions to iGaming Payments
The blockchain has provided different solutions for payments in the iGaming space. These solutions create efficiency and provide a secure environment for transactions. Here are some of the benefits blockchain payments provide.
Security
Blockchain technology is secure and user data is safe from hacks. The structure of a blockchain ensures that its information is securely spread around computers or nodes. These nodes are all connected to the network and there is no central point of failure. All transactions are approved using proof of work or proof of stake principles. This security ensures that players can make payments seamlessly without any interruptions.
Anonymity
Players love to be anonymous online. This protects their identity and allows them to game without fear or prejudice. Blockchain technology provides a layer of anonymity that allows players to make payments without exposing themselves. It also removes the need for AML (Anti-Money Laundry) and KYC (Know Your Customer) checks, which operators use to verify the identity of players. Abstracting away this layer improves the payment experience and allows for more flexibility for players.
Speed
Sending money through the blockchain is fast and nearly instant. Players no longer have to wait days to receive their funds. This will improve the gaming experience and create fast turnover for operators. It will also help operators to seamlessly pay players their winnings without delay or hassle. The benefits of speedy payments are noticeable for operators and players. This harmony will create an environment of trust and it will provide more options to players in remote areas.
Low Fees
Players can send and receive money over the blockchain for little to no fees. Traditional payment methods require users to pay fees to cover the cost of transactions. Using the blockchain lowers these fees and removes the barrier to entry. Players who were previously excluded because of their weak financial capacity can now enjoy games online. Eliminating fees will also increase the profits of iGaming websites because players will have more money to add to their bankrolls.