A quick look at the numbers tells you that the online gambling industry could implement any payment method it wanted and still turn over a hefty profit. Between 2017 and 2020, Business First believes digital wagering accounted for 39% of the total money spent. Of that, over £5 billion goes towards remote betting, mainly sports, and online casinos, with digital bingo games growing at a rapid rate, too. Europe has a majority share in the industry – over 50% – while the next biggest competitor’s market share, Asia and the Middle East, is below 20%.
Although payment methods are expanding with every passing year, including the introduction of Blockchain technology such as Bitcoin, PayPal has been a reliable and consistent feature for online gamblers for quite a while. And the trend looks set to continue as more and more remote wagering companies decide to utilise the e-wallet to their advantage. How and why did this happen? Continue reading to find out.
PayPal & eBay
The story of PayPal’s growth might begin with Elon Musk in the late 90s, but it catapulted to fame after being acquired by eBay in 2002 for around £1 billion. Thanks to its relationship with the online trader, which was the market leader at the time, PayPal was able to prove to customers that it offered a superior e-wallet experience its rivals couldn’t replicate. Before long, more than 70% of auctions accepted PayPal payments, and the brand’s value moved into the tens of billions of pounds. Today, it’s valued at £121 billion.
During the time eBay dominated the market, from between 2002 and 2014, prior to Amazon’s rise, PayPal highlighted to its users that it was the most secure and trustworthy payment method around. This reputation expanded past the borders of online auctions to the point where PayPal transformed into one of the world’s leading brands, appealing to anyone who used the internet for online payments, including remote betting customers.
PayPal’s reputation was the foundation for its dominance among the online gambling industry. After all, once people knew about it in a general sense and understood the safety and security aspect, they began to download the app and open an account in vast numbers. As of 2020, it has over 300 million active users, and it added 21 million new accounts in the second quarter of 2020 alone. The global popularity of PayPal is undeniable, which is why it is incredibly useful for betters and betting companies since players will likely have an open account.
Therefore, PayPal casinos eliminate any accessibility or functionality issues when they allow customers to deposit and withdraw winnings via the e-wallet. Plus, the fact that the transactions are almost instantaneous only heightens the user experience because gamers don’t have to wait to continue playing. Compared to traditional payment options, there’s no reason to waste time trying to remember long card numbers and PINs as the account is linked to a bank and automatically deals with the payment.
Links with Gaming Sector
As far as relationships go, the gaming and online betting industries couldn’t be much closer. Firstly, they develop and publish very similar services, some of which overlap. Secondly, they implement the latest technology to enhance their user’s experience, such as 5G and mobile applications. However, most tellingly, the two now piggyback off of one another via in-play purchases. Video game monetisation is rampant, and microtransactions bring in $26.73 billion in consumer revenue every year.
Yes, lots of examples include mobile and free-to-play games, such as Clash of Clans or Fortnite, and they don’t intermix with online gambling companies. But there are signs this is due to change as console developers allow users to spend in-play to win money they can use the real world. Grand Theft Auto Online is a prime example as GTA launched a casino in 2020 to attempt to make the gameplay more authentic. What’s the e-wallet that allows in-play purchases and microtransactions to happen, linking the sectors? It’s PayPal.
To say that PayPal is alone in the world of easy and accessible online transactions isn’t true. Since the beginning of the decade, technology has challenged the payment giant and forced it to change its ways. The software is cryptocurrency. Using blockchain programming offers a range of the same benefits PayPal does, from secure transactions to instant withdrawals and deposits. However, unlike the e-wallet developer, it’s totally anonymous.
Understanding it had to act, Paypal initially fought the rise of cryptocurrencies and blocked it from its platforms. Then, it let its customers accept payments in Bitcoin but wouldn’t let users spend it. Now, PayPal has entered the market by signalling that consumers can buy and sell virtual currencies using their accounts. For online gamblers, the news is huge as a decent percentage of players prefer the payment option and are part of the reported 6 million Bitcoin users. Also, Webxcon says that over $100 million worth of cryptocurrencies are traded daily, which highlights the role they have to play in the future of online gambling. If cryptos are involved, PayPal will be too.
Of all the perks of PayPal, one that goes under the radar is the entertainment value. Using PayPal might not be fun in itself, yet the e-wallet lets players control their experience via quick and easy to use payment methods. As a result, it makes sense for betting companies and casinos to provide the use of the e-wallet platform, especially if it will keep users engaged for longer. With fewer people having to deal with lengthy and complicated credit or debit card data, they are bound to remain logged on. From this perspective, it’s no surprise that digital betting companies have been pushing the use of PayPal for the past couple of years, which is another factor in its popularity and success within the industry.
As usage rates continue to rise, it appears PayPal is the payment method of choice for online gamblers. When you consider its long track record, ease of access links to the gaming sector, and crypto flexibility, it’s not hard to see why.