Update your payments to the Smartphone Revolution

Steve Jobs, on 9th January 2007 at MacWorld Expo, walked up to the stage with a small black metal and glass piece in his hands.

He said as he held up the gadget, “Today we’re going to make history.”

Since the iPhone’s debut 15 years ago, it has revolutionized the way people live. It has shrunk the world while connecting everyone. When we lose our phone or it is damaged, the feeling can be similar to phantom-limb syndrome.

The smartphone’s impact on commercial transactions, particularly in the payment area, is in many ways more profound. The consumer expects to pay by pressing a single button, and to have their product delivered to them without any friction. The consumers will not accept delays in payment, analog systems, or to be taken down the garden path.

It has been an issue in the gaming industry for a long time. In most jurisdictions strict requirements such as anti-money laundering and know your customers, and also social responsibility, complicate payment processes and make it difficult to achieve that ease.

Clicks to kill

Christopher Justice, president of Global Payments and member of the American Gaming Association’s (AGA) Board of Directors says that when you enter the US gaming industry the rules of payment and gaming are not the same.

Justice portrays an industry riddled by legacy technology, which is out of touch as consumers spend their money in other places.

He said that part of the problem is that they have all been brought together with the technology which was developed so many years back and has not yet adapted itself to the fact the the majority of Americans carry a smartphone. Three quarters of retail transactions take place in self-service. Last year, half of holiday shopping was done via mobile.

All of the various statistics pointing out where society is heading are drastically different from what actually happens in the market for casinos, primarily because they’re built on old models.

Justice says that consumers are confused about why they can order dog food on Amazon.com and have it delivered to their door by an Uber driver before noon, but when I visit a casino, I must jump through hoops. We look at gaming very much like ecommerce where clicking is the death knell.

Square the circle

Justice says that the issue is exacerbated by the mobile environment, as it operates within a much smaller space than desktops and increases the urgency of finding more efficient methods for payment.

Mobile is more similar to electronic purchasing than a computer, which has a larger screen and keyboard. We are reducing the number of keystrokes and making it easier for guests to move from one jurisdiction or property to another, while still having access to their money.

Justice says the only way to square the circle is by creating an ecosystem interconnected that doesn’t discriminate online or land-based services. As an example, he uses Global Payments omnichannel products.

Our interconnected eco-system is how we really try to tackle these issues. The VIP Preferred program, with more than 3 million members, is growing by approximately 35,000-40,000 new members each month. These are customers who enroll or get their KYC completed at brick-and mortar casinos or online.

Justice refers to the company’s VIP Preferred system as a B2C electronic check. This system allows users to transfer money electronically to casinos or ilottery where traditional payment methods may not be accepted.

The TITO Payment System

Global Payments also has found great success in leveraging the existing infrastructure of casinos to its own purposes.

Most slots in the US have operated under the ticket-in-ticket-out (TITO) system since the 1990s. Instead of emptying the slot of coins as the stereotype suggests, a paper is printed with a barcode that can be redeemed in the cage.

This system is built upon by the company’s VIP Mobility, which allows the casino to continue operating within its existing framework of compliance, rather than having to create a brand new one.

Users can create digital tickets for slot machines or other table games by scanning a QR Code. The casino allows users to quickly transfer funds in and out, or use them for other services.

Justice said, “Our approach was very different since we are the only system to leverage the TITO Infrastructure which has existed for over 20 years.” We do this because we track and audit everything. We will balance the entire resort every single day, to the cent.

The infrastructure is already there, and we don’t have to create new processes or open the door for new avenues of compliance like if we were to use a system based on a betting account.

The result is that the design of our system helps maintain and facilitate the compliance standards already in place at a casino. The AML is not visible because all the electronic funds are known.

Critical Mass

Justice predicts that omnichannel payment trends will reach critical mass by 2023.

Justice says that if you take a look at a bell-shaped curve, it is clear we have moved from the early adopter to the fast follower stages. 2023 will mark a significant year in that more and more consumers are going to invest in cashless systems. This is a natural progression, because as I said earlier, today, 34 of transactions are done by self-service in the US.

People don’t like to wait in lines, have face-to-face conversations or do any other of those things. Cashless is in line with the direction we’re taking as a culture. When you examine the mobile purchases made during last year’s holiday season, everyone was on their phone.”

Justice is also against the idea that online consumers are a bunch of trendy 20-something digital natives, who use technology differently than your average American.

Justice says that “it used to happen to me, people would tell me my clients were too old. They weren’t tech-savvy enough to handle this.”

When we examine the demographics of our database it is a female over 55 years old. The majority of them are using their iPhone or Android.

We’re finding that this convergence is really driving us forward. “I think that 2023 is the year when we will start seeing mass adoption.”