Payment Systems in Africa: Challenges for Gaming and Betting Industry

Payment Systems in Africa: Challenges for Gaming and Betting Industry

BetConstruct COO Sergey Harutyunyan spoke about the payment infrastructure in Africa at the Amsterdam iGaming Super Show.

For three days Amsterdam turned into a buzzing hub where online gambling solutions suppliers and operators geared up for the iGaming Super Show. This year’s event housed a number of conferences and exhibitions including the Amsterdam Affiliate Conference. It was also a unique place for sharing knowledge and meeting the faces behind the Skype calls and emails.

BetConstruct team also joined the event to showcase its offerings and attend the panels. During the iGaming Super Show our Chief Operating Officer Sergey Harutyunyan spoke at the Payment Solutions Conference.

Although mobile payments have become a more common thing in Africa, the platform is not without its challenges and risks, said Sergey Harutyunyan.

“Events as Amsterdam’s iGaming Super Show help industry players understand what the African market lacks and map out strategies for both suppliers, operators and regulators.”

In this regard, this edition’s main takeaway was that gaming and betting operators in Africa, mainly land-based, still have much to do since they often fail to act in line with social responsibility principles.

“Operators in certain African countries need to improve the age verification and payment systems,” said Sergey Harutyunyan. “They also should work to change the culture of betting. Locals should understand that betting is not a job or purely for making money. It is a type of entertainment.”

The African market is appealing because the local population loves sports and has good understanding of the field. However, the potential of the market is not fully unleashed. And one of the reasons is the poor payment systems, he said.

Though the African Internet bandwidth grew 41% between 2014 and 2015, according to researchers of TeleGeography, the mobile payment services have reliability and security issues, with thousands of those who have virtually no access to banks.

“The recent years have seen a shift in this regard, however. For example, Standard Bank, which is South Africa's largest financial services groups, have come up with Snapscan for fast and easy mobile payments,” Sergey Harutyunyan said.

The community is now working to improve the African mobile payment infrastructure. They understand that it has numerous advantages, from speed and convenience for the customer to the ability to send money abroad via peer-to-peer mobile payment services, etc.

Along with advantages, they know, the infrastructure brings about risks, namely: 

{bul}Mobile payments may be used for money laundering and terrorist funding.{/bul}

{bul}Installation of malicious software on mobile phone by user causes theft of personal information. {/bul}

{bul}Certain service providers have weak GSM encryption which leads to theft of service or content, loss of revenue and illegal transfer of funds as there is a threat of evasion of fraud controls. {/bul}

{bul}The adoption of mobile payment systems requires changes in business models and processes as well as the underlying technology infrastructures involved. {/bul}