Sports betting, and particularly online sports betting, is the gambling product du jour, but it’s not the only item on the menu. Another fast-spreading product that gets far less attention is online lottery.

12 US states currently offer some version of online lottery products. These products vary from subscriptions to single ticket sales and even online instant win tickets, a product that is nearly indistinguishable from an online slot machine.   

The one constant across these different jurisdictions is the need to safely and securely process payments – something that has dogged legal US online gambling (in all its forms) since its inception. The good news is safe, and reliable payment processing is improving across the board, thanks to companies like Paysafe.

To get a handle on payment processing in the legal US online lottery space, Betting USA spoke with Greg Kirstein, Director of Business Development for iGaming at Paysafe.

Paysafe and Online Lotteries in the US

Paysafe offers integrative payment solution platforms to retail and online businesses.

As stated on their website:

“Paysafe offers a unique suite of capabilities to merchants across online card acceptance, in-store card and mobile acceptance, alternative payment methods acceptance and localized credit solutions. All delivered through access to a global payment network with just one partnership.”

You’d be hard-pressed to find an industry more in need of this type of product than legal online gambling.

Paysafe and NeoPollard Interactive recently expanded their presence in the US online lottery space through a partnership with the North Carolina Education Lottery. This partnership provides North Carolinians access to Paysafe’s payment gateway technology that allows customers to fund and withdraw winnings (up to a certain amount) using a wide variety of different payment methods.

In addition to North Carolina, Paysafe and NeoPollard provide online lottery payment solutions to the Michigan, New Hampshire, and Virginia Lotteries.   

What does PaySafe Bring to the Table?

Betting USA: Can you give a prospective customer in North Carolina what the new partnership means for them?

Greg Kirstein: Our mission at Paysafe is to provide iLottery and iGaming operators with connectivity to all the leading and best-in-breed payment methods available to them. We enhance the experience by not only providing the connectivity but also by ensuring that they’re able to maximize customer conversions while using our technology.

The relationship between an iLottery or iGaming brand’s payments offering and player acquisition and indeed retention is relatively well-established. Our Q1 2019 research revealed that around a quarter (23%) of US players consider the number of payment methods offered as a differentiator when choosing and remaining with a brand.

At Paysafe, we understand how challenging and expensive it can be for operators to acquire a new customer. We therefore ensure that we provide our operator partners with the confidence that they will be able to convert a player through one of the many payment options available through our gateway.

Guaranteeing a frictionless payment experience for customers is vitally important for operators. After all, the only way to build true lifetime customer value (LCV) is to enable customers to make repeat deposits without any friction – a streamlined and seamless user experience, with a high degree of automation for returning players.

Is Online Lottery the same as Online Casino?

Betting USA: How does payment processing differ, if at all, between online casino and online lottery?

Greg Kirstein: The major difference between the online casino and iLottery verticals relates to approval rates for credit and debit cards. Our data on US consumer behavior reveals that customers almost always tend to first attempt a deposit with a credit or debit card rather than alternative payment methods. Against this backdrop, state- or government-run lotteries benefit from higher card approval rates than iGaming operators’ brands.

Ultimately, whether a brand is an online casino site or the iLottery of a US state lottery, offering multiple payment options – and giving a customer as much choice as possible – is key to success.

The Evolution of Online Payment Processing in the US

Betting USA: What improvements to online payment processing have been made in the online gambling/online lottery space since they started proliferating in 2013?

Greg Kirstein: The strongest improvements or innovations in payment processing for iLottery and iGaming brands have related to lowering customer abandonment. Salvaging customers whose issuing banks do not allow them to use their cards for iLottery and iGaming has been a key challenge for operators.

New, innovative alternative payment methods such as digital wallets and eCash solutions have played a role in overcoming this challenge. More broadly, technology has been vitally important. Our iGaming payments API, for example, allows players facing a card decline to seamlessly configure the alternative payment method of their choice. This helps prevent customers from abandoning the gaming experience because of their card issue.

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