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Case study

Benefits of Bitcoin payouts for the gaming industry

Tuesday 7 March 2017 | 09:11 AM CET

Pablo Magro, Payment21: This case study discusses how the Payment21 payout solution helps licensed gaming merchants to expand market share and realize the potential of a new target group

The online gaming industry is a crowded one with hundreds of payment options tailored to the regulatory requirements of many jurisdictions. Smart gaming operators clearly know they have to do something different to stand out. The way to make it happen is by adding alternative payment methods and reaching out to untapped demographics. Addressing the global payment needs of unsaturated emerging markets offers substantial growth opportunities. Payment21 supports gaming merchants to meet the demand for payouts in bitcoin and benefit from cryptocurrency while maintaining anti-money laundering-compliance standards with regulators and banking partners.

A regulated Bitcoin payouts solution

“Our Bitcoin payouts solution gives our merchants a cost-effective tool to pay their users and suppliers across the globe in a safe, convenient and compliant way,” noted Pablo Magro of Payment21, who went on to say, “As an AML-compliant digital cash processor, we can handle all of our clients’ specific regulatory requirements, even when our merchants are multinational enterprises dealing with multiple jurisdictions simultaneously.”

By working closely with Payment21, a Swiss-based Fintech company, gaming operators evaluate how their customers could potentially use bitcoin payments in their platform. “We’ve identified the need for a solution that assists merchants in accepting bitcoin payments risk-free in exchange for their products or services,” Magro added. “More importantly, we’ve also seen the need for solving a much bigger gap in the payments space, which is why we’ve incorporated a Bitcoin payout solution to pay players and affiliates.”

Once tried, merchants and their customers alike love bitcoin payouts. It is perceived as an additional win. Many players regard digital cash as an object of great value, such as traditional collector coins made out of gold. Tech-savvy players appreciate Bitcoin as a smart investment with added value in the future. In this context, Bitcoin functions as a bonus that one stores in a piggy bank on a secure cloud allowing players to save and spend digital money at their own discretion.

Changing the game in payments

Bitcoin is a real game-changer for the gaming industry. By offering a solution that facilitates cross-border payments in real-time, operators can expand into new regions. This can help merchants reach new players in emerging markets where it can be difficult to pay over the Web because of high transaction costs and lack of access to banking.

Payment21 offers two distinct payout procedures that can increase gaming volume. A fully-integrated real-time payout solution and a more traditional procedure that provides batch processing of mass-payouts.

Real-time payouts – unheard of in the industry

The Bitcoin payout solution enables merchants to offer fully automated real-time payouts to their users and affiliates directly from their own website interface. Users can request withdrawals by clicking on a customized payout button powered by Payment21’s API. The payout button appears in the player account and offers global access to the cryptocurrency.

This real-time payout platform facilitates the exchange of legal tender, speeds up clearing and settlement of payments over the blockchain, reduces overhead and eliminates the need for manual reconciliation on the accounting end. The award-winning Bitcoin cashier system was designed to ensure merchants’ compliance with gaming regulations, industry-specific Know Your Customer best practices, and the particular AML-compliance needs of banking partners.

When users want to cash out they simply start a payout request. The system checks the balance to make sure the player has sufficient funds to cover the sum requested. If the funds are available, they can be sent directly to the player’s Bitcoin wallet.

Players are presented with the real-time Bitcoin exchange rate, so they know how much they will receive. Users can easily initiate and control transactions themselves. Payment21 manages cash flows of merchants and their customers to ensure both liquidity and convenience at the same time.

Mass payouts using batch processing

When a gaming operator wants to do a mass-payout transaction, the merchant just starts a batch payout request from the admin page and funds the account with the correct amount by wire transfer. Payment21 processes the money and its associated payout-requests semi-automatically, although stop payments may be transmitted via the API on a case-by-case basis. The platform handles bitcoin payouts to the recipients’ wallets, and sends email notifications to players informing them about the available balance. Once the player logs in to redeem the payout, compliance checks take place.

Benefits for merchants

Some of the key features include the following: 1. Increased volume and accelerated cash flow 2. Higher deposits from new customer segments 3. Merchant expansion across all jurisdictions and serving new regions 4. Additional business due to marketing buzz in the Bitcoin community 5. No exposure to bitcoin volatility because of real-time exchange with legal tender 6. Savings in payout fees: 1% compared to significantly higher fees of competing methods 7. Zero consumer fraud because of no chargebacks 8. Lowering of the minimum payout threshold 9. Technology-driven solution supporting merchants to enter the cryptocurrency space using regulatory intelligence and mitigating risk 10. Payouts done in real-time or via batch processing in delayed-mode.

To read the full article and learn more about how to profit from AML-compliant Bitcoin payouts go to https://payment21.com/blog.

About Pablo Magro

Pablo Magro is the Commercial Director of Payment21. He specialises in the areas of global payments solutions through bitcoin technology. Pablo leads Payment21’s sales and marketing strategy and day to day execution. His vast international experience has helped develop strong partnerships in the payment industry contributing with Payment21’s growth in the targeted markets.

About Payment21

Payment21 is committed to building trusted networks and making the digital payments ecosystem compliant, secure and more user-friendly. The venture has been recognized for its high security standards in processing cross-border transactions. The owner of the Payment21-brand is a registered financial intermediary executing the legal obligations set by the Swiss Financial Market Supervisory Authority (FINMA).

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