Israel Rosenthal, CEO and Co-Founder at MuchBetter
The iGaming industry in 2020 is virtually unrecognisable from the one that I first entered. From relatively humble origins, I’ve seen it explode in scale. It’s also become far more polished and professional, as anyone who was in the iGaming business in those early days will testify.
Before launching MuchBetter, I was at PokerStars for more than a decade where I served in several roles (Internal Audit, Security, Payments, operations and in my last role as COO). This meant that I developed a deep understanding of every working part in the iGaming machine. I saw some parts worked together seamlessly, and others that were always a source of friction. I saw payments as an area of the iGaming ecosystem that was ready for disruption.
It is important to mention that one thing I have learned - if not the most important thing - from the PokerStars management, was that customers and employees are the most important assets a company has and should be treated as such. I know it sounds trivial, but many times it is forgotten.
As far as operators are concerned, payments are the most mission critical element of their entire business model. Without functioning e-wallets, players can’t move funds in and out of their accounts, and operators can’t generate income. When we first launched, the iGaming payments landscape was dominated by only a handful of big brands. These payment partners were a critical cog in the process, but they knew and abused their position of power. Innovation in the payments space had stalled, yet processing fees were allowed to rise unchallenged for years. Operator profit margins were squeezed by their payment partners who were doing little to solve fundamental issues around fraud, bonus abuse and player churn. In many cases, payment partners were actively enabling this activity because it further increased transaction fees. We saw that payments companies were profiting at the expense of operators and that a more harmonious relationship could exist between players, operators and e-wallets.
We definitely wanted to shake up the iGaming payment monopolies. We set out to replace outdated technology or business models with something much better – hence the name. We did this by combining best in class technology and our own IP to create innovative and unique services to solve the biggest challenges facing operators like William Hill, PartyPoker, 888, Paddy Power, Betfair, BetWay and my old employer, PokerStars (all MuchBetter customers). We’ve solved massive challenges for operators around security and fraud. There have been no instances of card not present fraud on our platform ever. This is all thanks to our unique dynamic CVV technology. We’ve also reduced fees for every operator and given customers the kind of seamless user experience they’ve come to expect from modern financial applications like Apple Pay.
A new business model for payments
Payment partners gradually raised their transaction fees over the years because they could. No credible rival business model existed and all payment companies charged a small percentage on every transaction. This would cost operators a lot of money, especially for VIP players, but they had no other choice than to pay.
Our approach to transaction fees is probably the single most disruptive element of the MuchBetter service. Rather than charge for every transaction, we only charge on a net deposit model – if our operators don’t make a profit on a player, neither do we. In practice, this means that we only charge fees on £2,000 for a player that deposits £10,000 then withdraws £8,000. Other payment providers would charge a percentage on the £18,000 total money moved in/out. This is why so many of our operators are actively encouraging their customers and VIP players to use MuchBetter. They save a lot of money in transaction fees this way.
The challenge and opportunity of regulated markets
Heavily regulated and taxed markets present a great challenge and a great opportunity for the iGaming payments sector. Businesses like ours only exist to solve challenges for our operators and their players. They trust our knowledge and expertise to create bespoke payment solutions in the markets in which they operate. We accept that there will be more issues in some markets vs others, but this is the oxygen our business needs to succeed. We solve problems for our operators and we thrive on meeting the biggest challenges they have.
For example, consider a region that has issues with fraud. This may be a big issue for operators there, but it’s an opportunity for us because we know that we have a secure system that discourages fraudulent activity like no other payment business. Big iGaming payments companies are not agile enough to create bespoke payments solutions on the fly as regional iGaming regulations change. They may decide they can’t operate in these regions, which makes them a great opportunity for us. Our iGaming operators love us for our flexibility and resourcefulness.
Usability meets security
Another key mission statement for MuchBetter was to create a payment journey that was both seamless and secure – since one is normally detrimental to the other. Smartphone security is a good analogy of this concept. A four to 12 digit pin is very secure and difficult to guess, but it can be hugely detrimental to the experience of using the phone. That’s why the fingerprint scanner was such an immediate success, being both easy to use and highly secure. We adopted a similar approach to payments. Rather than throwing up more hurdles (pins, passwords, security questions) we wanted to make use of the seamless and secure technology that already exists in the market by being mobile first. After all, smartphones are the most popular device for iGaming today. Our users can set up an account within minutes and make payments instantly with just their fingerprint for verification.
We also help operators stay compliant with industry regulations and reduce fraudulent activity/bonus abuse. Our product design and architecture eliminate the typical fraud patterns and cases you see with most other wallets. All MuchBetter mobile accounts are paired to a player’s phone number and device, creating a trusted environment between app, phone and phone number. We prevent account takeover scenarios and bonus abuse because all transactions are authorised within the app and on the device. Fraudsters are unable to create multiple fake accounts and sign up to free bonus offers – which is a common tactic facilitated by other payment platforms.
Continuing to perfect payments
As we head towards one million users, a massive milestone for the business, we cannot rest on our laurels. The iGaming payments landscape will not stay still forever and nor can we.
Even though MuchBetter is already in more than 180 countries, we are always striving to reach new operators, players and regions. In 2020, we launched several major updates and new services. Most notably was the debut of CashDuster, a unique new service that lets operators display marketing campaigns and promotions via the MuchBetter app. This was the first time a payment app has functioned as a sales/engagement channel for operators, and it has proved incredibly popular among our operators.
There’s a lot more up our sleeves and 2021 will be a big year for us, representing another 12 months full of challenges and opportunities. We want to meet these challenges head on and grasp any opportunities that come our way. There’s a lot of uncertainty in the world due to COVID, but I’m confident we have the team and tech required to continue to perfect payments the MuchBetter way.