iGaming’s Payment Evolution Has Strong Odds to Catch Consumer Loyalty

As sportsbooks and online gaming platforms compete for player loyalty in an increasingly saturated market, the entire sector is getting a makeover.

And payments, once a friction-filled afterthought, increasingly sit at the center of this evolution.

“Payments aren’t just a backend function — they’re a strategic growth driver. The more seamless the process, the higher the conversion, retention and overall user satisfaction. That’s where the industry is headed,” Zak Cutler, president of global gaming at Paysafe, told PYMNTS.

When the Professional and Amateur Sports Protection Act (PASPA) was overturned in 2018, it unleashed a wave of sports betting legalization across the United States. But while operators rushed to onboard customers, one critical hurdle remained: payments. Issuing banks had historically blocked transactions coded as gambling-related, and despite the legal shift, approval rates remained abysmally low.

“In those early days, you had all this marketing, all these new sportsbooks going live, and then … credit and debit card declines everywhere,” Cutler said. “Issuing banks weren’t on the same page as regulators, and if their policies didn’t explicitly allow gaming transactions, they simply didn’t process them.”

The industry quickly adapted. Digital wallets like PayPal and Skrill gained traction, open banking solutions began to emerge, and operators sought alternative methods to facilitate deposits. Over time, major financial institutions recognized the legitimacy of online sports betting, bringing transaction approval rates from single digits to over 90% at major banks today.

“Fast forward five years, and we’ve gone from very few ways to pay — with a ton of friction — to a well-optimized space with a variety of payment methods,” Cutler said. “Digital wallets, bank transfers, Venmo, Apple Pay, even cash-based solutions — players now have an array of options tailored to their preferences.”

With the first wave of payment challenges largely solved, sportsbooks are now laser-focused on the interplay between payments and user experience.

While the U.S. market has matured rapidly, global best practices are influencing its next phase. Open banking, for instance, is mainstream in Europe but still nascent stateside. Similarly, alternative payment methods (APMs) dominate in regions like Latin America and Asia.

“Look at Brazil — Pix accounts for the majority of transactions. In the Netherlands, iDEAL is the primary way to pay. Operators need to offer the right payment methods for each jurisdiction to maximize conversion,” Cutler said, noting that Paysafe has built its reputation on providing a single integration that delivers global payment acceptance.

“If an operator like Bet365 is expanding into Latin America, we enable them to offer PagoEfectivo, SafetyPay and other regionally preferred methods without additional integration work,” he said. “We’re seeing an industry shift where sportsbooks are becoming global platforms, and they need localized, seamless payment options across every jurisdiction they operate in.”

As the industry matures and expands, focus is shifting beyond speed to seamless payment integration within the gaming experience. This means that payment processes will no longer be siloed as a separate step but instead embedded directly into gameplay and betting experiences.

“Payments are one of the first interactions a user has with a brand,” Cutler said. “If a deposit fails or their preferred payment method isn’t available, they’ll leave and go elsewhere. Operators are spending significant money to acquire users — so every friction point matters.”

Embedded payments are a rising trend, offering operators an all-in-one gateway that integrates multiple acquiring banks, digital wallets and real-time payment options. Another key trend is the convergence of Know Your Customer (KYC) and payment credentials.

“Think about it — if a digital wallet has already verified your identity, age and location, why should a sportsbook have to do it again?” Cutler said. “Regulators need to get comfortable with streamlining these processes. The less redundant information users have to enter, the smoother the experience.”

While much of the industry’s focus has been on improving deposits, withdrawals are just as critical to player satisfaction.

“People want access to their money — fast,” Cutler said. “If they’ve won a bet or have a balance to withdraw, how quickly they can access those funds determines their trust in a platform.”

Real-time payout solutions like push-to-debit (through Visa Direct or Mastercard Send) are becoming increasingly popular. Digital wallets also play a pivotal role, offering instant access to funds with options to link to prepaid cards for everyday spending.

“The beauty of digital wallets is that they create an embedded finance ecosystem,” Cutler said. “A player can instantly receive winnings, and instead of withdrawing to a bank, they can spend directly using a prepaid card. It’s a seamless experience.”

For the end-user, the goal remains simple: an effortless, secure experience. Whether it’s depositing funds, placing a bet or cashing out winnings, frictionless transactions are becoming the norm.

“The industry has to evolve alongside consumer expectations,” Cutler said.

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