Emerging markets are always high on the agenda for iGaming operators writes Jens Bader, CEO of CashtoCode, however some regions such as Latin America (LatAm) can prove tricky – which is why cash can help relieve some of the regulatory headaches when entering new regions.
At any given moment, iGaming operators are exploring the opportunities they present or trying to navigate the challenges they pose – usually both at once. Latin America is a prime example. It is one of the fastest growing iGaming regions in the world, if not the fastest growing. Yet while LatAm advances on its journey to becoming a regulated iGaming market, issues like iGaming payments can be extremely challenging.
This is the general picture for LatAm as a whole, but every country is different and has its own unique hurdles. Operators entering the market for the first time may find they have repatriation issues in Argentina, taxation issues in Brazil and conversion issues in Peru.
The difficulty of working across multiple regions, navigating multiple regulatory markets and working with multiple local payment partners means that operators can’t fully capitalise on the LatAm opportunity. The barrier to entry in terms of payment expertise, fees and manpower are often far higher than forecasted.
Simplifying the problem
For operators wanting to do business in LatAm, there are similarities to buying a car in and the benefits of simplification. Extra features like rear view cameras, hill start assist and cruise control all introduce complexity and potential points of failure. If an electrical feature stopped working, a local mechanic may not be able to identify the issue, let alone fix it.
By comparison, a simplified more mechanical Suzuki motorbike may run more reliably for longer. As little more than two wheels strapped to an engine, the bike will have fewer points of failure, and it may be fixed by any competent mechanic – or even the driver themself.
This is the LatAm iGaming payment complexity issue in a nutshell. Operators want to go from A to B and think they need a car to get them there, but they may also consider a motorbike.
Any iGaming operator expanding into LatAm needs to work with lots of different local payment options, must research these schemes in detail, understand their processes as well as local regulations and restrictions. If it doesn’t, it will inevitably suffer authorisation and conversion issues. The operator may also need a local entity in some countries for tax reasons or for obtaining approval from the local payment issuer.
Even with local professionals and expertise, operators still often have repatriation issues and high costs for converting currency as they look to remove funds from the country.
An operator can remove a lot of these hurdles and achieve a great deal of success if they incorporate cash as a primary part of their payment strategy. Fiat cash is the original gambling payment method, and in iGaming it solves many of the same issues as the motorbike in the vehicle analogy by simplifying the process and removing points of failure.
Cash payments are convenient and easily understood by customers, while operators do not need to worry about the movement of funds. It provides the highest acceptance rates by eliminating opaque scheme-like acceptance rules, it provides the operator on the other side with an indemnified service, without them even having to think about the mechanics of moving the funds from the country. The repatriation of funds to the operators’ designated bank account is often a major headache.
The adoption of cash payments overcomes all physical and regulatory borders in the LatAm market. Cash is always available for customers in any country, and it enables operators to approach the entire region with just one payment strategy and one payment partner. This is a game-changing approach and enables operators to move fast and move first.
Cryptocurrencies promise something similar, but its technical complexity is a barrier for entry for many. It also requires users to convert money into crypto then back again, and is far more volatile than government backed cash currencies. However, cash can be a viable on-ramp for crypto.
In short, cash is frictionless, accepted, indemnified, and yet not overburdened with intrinsic rules and policies. It is therefore an extremely viable and popular payment alternative for customers. Cash needs to be part of any emerging markets payment strategy for exactly these reasons – and operators should plan for a significant proportion of funds loaded to LatAm accounts to be from cash payments (which is currently the case in most parts of the world).
In addition to cash, one solution that is becoming increasingly popular in the region are evouchers, like the CashtoCode prepaid voucher product. Vouchers present an intermediary solution to navigate some of the payment challenges that other payment products cannot solve. The result is a seamless, instant deposit. Nothing gets blocked, the operator gets paid, and the player can place their bets.
We help numerous operators in the region take payments via our eVoucher solutions, thus removing the frustration from many of their players. The vouchers are easy to buy for customers, safe, secure, and don’t create chargebacks like certain other payment products.
Payments are a mission critical part of iGaming, and vouchers ensure operators can capitalise on the early opportunities by being able to accept deposits from literally everyone.
The LatAm market presents valuable growth prospects to iGaming operators, but these opportunities won’t wait forever. As part of a wider payments strategy, cash and evoucher options allow operators to move quickly, and capitalise on the early opportunities by being able to accept deposits from literally everyone.
For operators that need to go from where they are now to where they want to be in 12 months time, cash will help them to get there faster with fewer headaches.