12 May, 2023

Big Question: Will crypto payments become the preferred method of payments?

Malcolm Atuona, CFO of CoinPayments and Anton Komukhin, Head of Product at Praxis discuss the future of crypto payments.

Will crypto payments become the preferred method of payments?

Malcolm Atuona, CFO, CoinPayments

In today's ever-evolving digital landscape, the iGaming industry has thrived by harnessing innovative technologies to deliver seamless, secure and captivating experiences for players. As a tech-focused CFO (Chief Financial Officer of CoinPayments), I've witnessed first-hand how crypto payments are revolutionising the way we interact with iGaming platforms. Now, with an increasing number of players and businesses embracing the incredible benefits of digital currencies, the question arises: will crypto payments emerge as the favoured payment method in the iGaming space?

Here at CoinPayments, we have a presence in over 190 countries, a network of more than 120,000 merchants, with a platform that empowers businesses to accept various cryptocurrencies, including Bitcoin, Ethereum and stablecoins. This unprecedented level of flexibility has sparked significant interest among iGaming operators, who are keen to capitalise on the growing demand for digital currency options.

In my opinion, one of the primary drivers behind the adoption of crypto payments in the iGaming industry is the unparalleled security and privacy they offer. Traditional payment methods often require players to divulge sensitive personal and financial information, making players vulnerable to hacking and identity theft. In contrast, cryptocurrencies operate on decentralised networks, providing additional security and anonymity. This increased  sense of safety is particularly appealing to players who prioritise safeguarding their data.

Another huge benefit of crypto payments is their potential to remove chargebacks and reduce fraudulent transactions

Malcolm Atuona

Secondly, the borderless nature of cryptocurrencies is a game changer. It empowers iGaming platforms to cater to a global audience without the complexities of currency conversion and international transactions. This results in a much more seamless experience with reduced transaction times and fees.

Another huge benefit of crypto payments is their potential to remove chargebacks and reduce fraudulent transactions. With traditional payment methods, iGaming operators often face disputes that heighten the risk of  financial losses and tarnished reputations. However, cryptocurrencies offer transparency and immutability, making it difficult for malicious actors to exploit the system. By embracing crypto payments, iGaming businesses can safeguard and futureproof their revenue streams. Safeguarded revenue streams from nefarious activities ultimately  mean higher revenue, lower operational costs and increased credibility.

At CoinPayments, we facilitate seamless integration by offering a user-friendly crypto payment gateway that can  be easily incorporated into most existing iGaming platforms. This straightforward process enables our clientele greater access to a broader client base.

CoinPayments keeps a close eye on the development of regulatory frameworks surrounding cryptocurrencies  and the iGaming industry as this will play a crucial role in shaping the future of crypto payments. As governments and regulatory bodies continue to establish guidelines and standards, it is safe to assume that the adoption of digital currencies in the iGaming sector will soar. It is crucial to CoinPayments’ go-forward strategy that we are at the forefront of these developments and working closely with regulators to foster a responsible and compliant ecosystem  that nurtures the growth of the sector. At CoinPayments, we remain laser-focused in our commitment to facilitate this transformative shift and provide crypto payment solutions for iGaming. 

Will crypto payments become the preferred method of payments?

Anton Komukhin, Head of Product, Praxis

The growth of cryptocurrencies over the last decade has led to an increased interest in using them as a payment method. While traditional card payments are still dominant, the rise of cryptocurrencies has prompted the debate about which payment method is better.

Predicting the future is not the business of data-driven companies. However, data does allow us to talk  about certain patterns. And at the moment, the patterns allow us to conclude that the massive distribution  of crypto payments has long become a reality. It’s even the norm in many industries, for example, iGaming, eCommerce etc.

However, talking about global dominance over other payment methods like cards and e-wallets is a little premature. Especially when you consider that 76% of the world's population has access to traditional methods like cards and  e-wallets (Global Findex Database). Looking ahead, it is worth noting that this is generally unlikely.

There are many reasons for this.

Regulation is one of the biggest obstacles to widespread adoption of cryptocurrencies. Most countries don’t have  clear regulations regarding cryptocurrencies, and there’s still uncertainty regarding their legal status. This makes it hugely challenging for businesses to accept cryptocurrencies as a payment method, as they may face regulatory and legal risks. And, despite the recent announcement about the world's first comprehensive regulation approval by EU Parliament, it’s still a long road for mass adoption of crypto payments. Availability and simplicity, as well as overall customer experience, are also factors to consider. While crypto payments have become more accessible in recent years, they’re still not as widely available as traditional payment methods. Many people aren’t familiar with how to use cryptocurrencies and don't understand the risks involved. Even the process of buying and transferring them can be complicated. In contrast, traditional payment methods such as cards and e-wallets are widely available and easy to use –making them a more convenient option for many consumers. It’s also important to note here that the Covid-19 pandemic really boosted the card-related payments evolution.

Competition is another obstacle to widespread adoption of cryptocurrencies. Card payments haven’t had competition for decades and have been entirely unrivalled online… Until now. Mobile payments, QR, Open banking and Tokenisation are all new payment methods gaining popularity and competing for market share. With so many options available, it’s difficult for cryptocurrencies to become the preferred payment method.

Global dominance over other payment methods like cards  and e-wallets is a little premature

Anton Komukhin

Despite these obstacles, there are still several reasons why cryptocurrencies are gaining that momentum.  Firstly, cryptocurrencies offer a high level of security, which is crucial for online transactions. Cryptocurrencies are decentralised, and transactions are verified through a distributed ledger, making them more secure than traditional payment methods. This is particularly important in the gambling industry, where there is a high risk of fraud  and hacking.

Secondly, cryptocurrencies offer faster transaction times and lower transaction fees. Transactions can be processed in a matter of seconds, compared to several days for traditional payment methods. This makes them a more efficient option for both consumers and businesses. Finally, cryptocurrencies offer a level of anonymity that traditional payment methods do not. This is particularly important for consumers who value their privacy and do not want their financial information to be tracked. So, while it’s unlikely that cryptocurrencies will become the preferred payment method, they’re gaining momentum and are a viable option for businesses and consumers. While there’s still regulatory and adoption challenges to overcome, the benefits of cryptocurrencies - such as security, speed, and anonymity – make them a valuable addition to the payment landscape.