"It may lead to consolidation among the open banking providers, as not all of them will survive."

Christian - long time no see! What have you been up to in the last two years as Director of the ever-growing Payments team?

"The growth of the department is one thing that has indeed kept us busy. We have embarked on a journey to build a department that can provide a proprietary payment gateway to the group, capable of supporting our ambitious goals for growth in many markets.

To secure that, we need to be able to build integrations with Payment Service Providers (PSPs), invest in orchestration features and other business logic, and comply with the various regulatory requirements stemming from our different licenses—all of this in parallel. Our main KPIs for what we build are performance and cost. Everything we do needs to support the continuous improvement of these KPIs.

To accomplish the above, we have onboarded many new colleagues and adjusted the department’s structure. We've invested in updating our ways of working and increasing the Payments expertise within the department, all while ensuring we foster our very specific LeoCulture.

But organizational development was, of course, not the only thing we did. We were part of many exciting projects within the group and are proud of our achievements in adding licenses and brands to our portfolio, as well as consolidating our PSP and integration landscape. We celebrated some major milestones in building towards our plans in the area of payment orchestration and creating a more personalized payment experience for our customers—especially in the very important withdrawal experience.

So, yeah—not a dull moment, that’s for sure!"

Last time we spoke, you focused heavily on the PSD2 directive, open banking, and their impact on the iGaming industry and the tech society at large. Looking back, do you think your assessments were correct?

"Banking-based payments via PSD2 open banking APIs have increased in percentage of usage on our platform. The UK, previously a non-banking market, now sees up to 30% of open banking adoption. We are utilizing open banking APIs for payment verification and affordability assessments. From that perspective, quite a few of the predictions have come true.

However, we have also learned a lot about the (for now) unfulfilled promises of open banking. The coverage of instant payment transactions in the UK is 100%, which is one good reason for the success of banking-based payments there. Unfortunately, this is not the reality in many EU markets yet, and that fact hinders further adoption.

The robustness of some banks’ APIs is still lacking, even after four years, which also prevents further adoption in certain markets, such as Italy.

The data shared by banks via their PSD2 open banking APIs is not always of the quality we expected, which complicates the development of products based on this data.

Yet, we also see many providers entering this space with various solutions to these problems, which is excellent for innovation and will lead to improved customer experiences.

The regulators are also addressing the aforementioned challenges. PSD2 is evolving into PSR1. What was previously a directive, subject to various interpretations by each member state when incorporating it into national legislation, will now become a regulation that must be adopted verbatim. This will create more harmonization across EU member states. The new regulation will lay the groundwork for several improvements in open banking payments, making them safer and reducing friction in the customer experience.

In conclusion, I am still very excited about open banking, although we must acknowledge that its evolution may be slower than we would prefer."

What direction will the open banking journey take then, from here on?

"To me, it's clear that open banking, not only for payments, is here to stay. The use of open banking APIs in various areas of our product, as described above, will not go away anytime soon. With the improvements introduced by PSR1 and potentially PSD3, the technology will become better suited to process payments, verify ownership of payment instruments used in the course, as well as assist with affordability checks.

The EU will also improve the availability of instant payment transactions through instant payments regulation, which will further bolster the opportunities for open banking-based payments.

So, from here on, we will witness a continuous increase in the share of open banking-based payments in the industry, across more markets. We will also see improved customer experiences in this space, driven by the relatively low entry barriers that allow more providers to bring their ideas to fruition. Considerations about authentication, integrating open banking-based payments with other features in smoother user flows, and combining them with concepts like VRP will be areas that are affected.

This will, of course, come with some price reductions as providers compete for transaction volumes, but it may also lead to consolidation among the open banking providers, as not all of them will "survive." Exciting times!"

Bitcoin and other crypto currencies aren’t as hyped as they once were. Have you seen this in igaming too??

"Cryptocurrencies are a complex matter and can serve multiple purposes, including being used as a means of payment and as a (high-risk) investment. They come in different forms, such as stablecoins, which are linked to a fiat currency, and altcoins, which are not. I get the impression that the hype has revolved more around the volatility and value growth in the realm of investments, while the progress of cryptocurrencies replacing fiat currencies as a means of payment has never been as pronounced.

However, cryptocurrencies have also made advancements in this area and are now accepted by, for instance, e-commerce shops online, as well as in certain offline establishments.

Their use in online casinos is often prohibited due to regulations, so we do not currently use them on any of our brands. Nevertheless, under the MGA license, there has been progress in developing a framework to allow players to deposit and withdraw using cryptocurrencies, making it possible under this gaming regulation.

In general, there is still a lot of suspicion surrounding the use of cryptocurrencies, often based on assumptions that may or may not reflect the actual situation. Cryptocurrency transactions can, in fact, be made more secure than other forms of payment offered today, such as cash vouchers. However, many people still believe that cryptocurrencies are dubious and untrustworthy. This perception will slowly change as more people begin using them, although factors like volatility in the altcoin market are among the reasons holding people back from wider adoption.

It will take time for greater adoption, but cryptocurrencies are here to stay and will be used more widely."

As we approach 2024, what payment trends do you foresee on the horizon?

"I believe that this year will see a greater integration of AI and machine learning within the payments space. Many Payment Service Providers have expressed the intention to use this technology in areas such as orchestration, such as performance routing or predicting fraudulent behavior before it occurs.?

The sophistication and availability of AI and machine learning have significantly increased recently, and I anticipate their wider adoption, automating tasks and thereby enhancing performance. Many processes that rely on human analysis, drawing conclusions from detected patterns, and implementing conclusions - such as applying specific rules to players - are highly suitable for replacement by machine learning and AI.

I also expect that we will witness a decreased adoption of traditional eWallets like Skrill or Paypal, continuing a trend that we have already observed in recent years.?"