How to choose the best open banking provider for iGaming operators

If you’re in the market for a new payment method to add to your iGaming platform, you’ve probably come across open banking.

The level of regulation involved in iGaming payments means it’s especially challenging for payments product buyers to find the right product. Striking the right balance between meeting KYC and AML requirements and providing an ideal payment experience for players is no easy task.

Open banking is a relatively new payment method that’s proven to be popular among iGaming operators. Unlike traditional payment methods like cards and manual bank transfers, open banking doesn't rely on manual input and tracking. For iGaming operators, the real attraction of open banking payments is that they combine data and payments, enabling them to automate things like account verification, income and affordability checks.

How can you tell which open banking provider is best for your business?

As a payments product buyer, it’s important to identify which open banking aspects, features and functionality will make the biggest impact for your business. This article highlights the key factors that iGaming operators should consider when choosing an open banking provider. It will help you understand which questions you should ask to address your business’ specific needs and what to look for in the perfect provider.

For a more detailed overview, take a look at our free buyer’s guide to open banking payments.

If you’re new to open banking or feel like you need to read more about what open banking is and how it works, we have a guide for that too. Check out our free open banking guide.

What should iGaming operators look for in an open banking payments provider?

The seven aspects that iGaming operators should assess when looking for an open banking provider are: coverage, features and functionality, integration options, payer experience, stability and security, ongoing support and provider expertise. In our buyer’s guide to open banking payments, we cover each aspect in detail.

While all of these are important for iGaming operators, here we outline three of the most crucial.

1. Features and functionality

Open banking was created in 2018, after the introduction of the PSD2 regulation that aimed to deliver a secure and instant way for people to make online payments without a physical card. But many open banking providers have built upon this minimum requirement. They have layered innovative features and functionality on top of application programming interfaces (APIs) to help solve customers’ and business’ pain points.

Account verification

Account verification is a necessity for online gambling and betting providers in most countries as part of their KYC requirements. Customers need to upload bank account documents or pay micro deposits when registering their account, which can be a real sticking point in the player journey. It causes drop off during the payment process, and the wait between submitting documents and approval can reduce the likelihood that a customer will deposit money once their account is approved.

Top open banking providers have developed solutions that revolutionise the account verification process. Using APIs, customers can have their accounts verified in seconds during their initial payment without the need to upload manual bank statements or make micro deposits.

The solution directly connects your customer to their bank account and cross checks their details with the details on their account. They can then confirm their details using features such as biometric authentication for extra security. Not only does this solution increase customer satisfaction, it also protects against fraud and reduces the chance of incorrect account data being submitted.

Not every open banking provider offers verification solutions alongside payments, so in order to offer the optimum player experience, be sure to inquire about this feature.

Payouts and withdrawals

The pay-out process is just as important as the pay-in process for players. In a 2020 YouGov survey, eight in ten iGaming customers said they’d consider switching to an operator that provided instant payouts. When talking to an open banking provider, ask whether they offer instant payouts. The bank rails that providers use can differ significantly, so confirming that your provider uses only the fastest available payment rails will ensure your players aren’t waiting around to withdraw their winnings.

Another important feature to consider is open-loop verified payouts. This means that a customer is able to deposit via one method of payment, such as a card payment, but can withdraw their winnings via bank transfer to a verified account. Offering this service gives your customers more control over their payment experience. Only some banking providers offer this service, so it could be a key differentiator.

Product development roadmap

In many ways, open banking is still an emerging technology, so many providers are still developing their solutions. It’s important to ask prospective providers about their plans for the future. Do they intend to release new features that will help your business? This will help you gauge whether you can form a long-term working relationship with a provider, which is an important consideration as open banking gains prominence in the iGaming industry.

2. Stability and security

Stability and security should be top priorities for iGaming operators. The online betting and gaming industry has been subject to a 146% year-on-year increase in payment attacks. Common examples include chargeback fraud, multiple account fraud and credit card fraud.

Open banking has built-in features that can help prevent payment fraud at your business. But your ideal open banking provider should also take extra steps to build on the protections that open banking provides.

A rigorous information security programme

Your prospective provider should understand that keeping your players’ data safe is a top priority. Must-haves include a dedicated security team, an independent third-party penetration testing programme and a consistent threat modelling programme to identify any potential future threats that may arise. You should always ask if they are certified to a recognised standard such as ISO27001 or similar, and they should be able to demonstrate a clear protocol for release management.

While no open banking provider can guarantee that they are completely safe from cyber attacks, they should be able to demonstrate that they have taken every possible precaution to keep your players’ data safe.

A detailed API status page

All APIs go down from time to time, but an open banking provider that can’t offer their services more than 99% of the time is probably not worth the hassle. Ask your provider if they offer a detailed, publicly accessible API status page. This details exactly when different APIs have gone down on an hourly basis so you can judge whether the business will live up to expectations.

You should also ask any potential provider about the protocol for when an API goes down and how they manage API maintenance. How long on average does it take to discover an issue? How long on average does it take to fix an issue? How are end users notified of problems relating to the downtime of the API? The answers to all these questions should give you an indication of how a supplier prioritises API problems and maintenance.

3. Payment experience

Players’ payment experience can significantly impact how much they trust an operator. In a survey with YouGov, TrueLayer found that 64% of players said they are more likely to trust a provider who offered them instant deposits and withdrawals. But the payment experience goes way beyond payment speed — it consists of factors such as how quickly their account can be verified (see Account verification), the UX design and how they drive payers to use the open banking option.

Optimised UX for bank selection and consent screens

Your ideal provider should understand that a smooth user experience is central to driving traffic through your open banking payment option. If your players need to move through numerous pages and input data at several points, it’s likely they’ll give up and either choose another payment method or churn.

The four key factors you should focus on when assessing any player payment experience are:

• Convenience: how long will this take?

• Clarity: what exactly do I need to do? How difficult will this be?

• Familiarity: have I done this before? Do I recognise it?

• Security: is this safe? Do I trust it?

Your ideal provider should offer your players a smooth payment experience in the parts of the open banking payment flow that they design and own. But it’s important to understand that they don’t own the UX for the whole payment process. Much like strong customer authentication with card payments, banks handle the authorisation step with open banking payments.

The parts of the open banking payment flow that your provider will own are the bank selection and consent screens. Your prospective provider should have tested and optimised these steps to provide a smooth payment experience for your players. They should also prove that they have met the regulatory requirements. A good provider will go one step further and offer recommendations on how to optimise your payment UX to meet your business’ specific goals.

Best practices for driving open banking adoption

The main reason for adding an open banking option to your payments page is to offer your players a new, better way of paying or withdrawing money. Your provider should offer options and best practices for how to encourage players to choose the open banking option over other payment options. For example, by advising you on what terminology to use or how to structure the hierarchy of your payment options to increase the share of players that choose open banking.

It's important that your provider acts as a guide when you're building your open banking user journey. Their advice shouldn’t stop after simply providing a technical solution.

How do you choose the right open banking provider?

Choosing the right open banking provider is a process. But by putting in the effort now, you’ll see clear results when you eventually go live with your payment solution. By asking the right questions about account verification, stability and security, and payer experience, you’ll be well on your way to choosing the provider that’s best for your iGaming business.

For a more detailed overview of every aspect you should be assessing, check out our free Buyer’s Guide to Open Banking. We’ve also created a detailed checklist of all the questions you should be asking to keep you organised and make the whole process a little easier.