Alternative Payment Methods (APMs) in iGaming: Why Local Rails Still Matter

Cards are still one of the main ways people pay at online casinos and betting sites. They are familiar and easy to understand. The problem is that they do not work the same way in every country, and not every player wants to use a card.

Some customers prefer to pay through their bank. Others already use an e-wallet and do not want to enter card details. In some markets, a local payment service is simply the option people know and trust.

For an iGaming business, these details matter. A player who cannot find a familiar way to deposit may simply close the page. Withdrawals are important too. Even when the deposit works perfectly, a slow or inconvenient payout can leave a bad impression.

Local payment methods give operators another way to handle both situations.

Alternative payment methods, or APMs, are ways of paying that do not use a standard card transaction. In iGaming, these methods include bank transfers, open banking, e-wallets and prepaid vouchers, with the most suitable option depending heavily on the market. Customers may choose an APM because it is familiar, locally available or easier to use than a card. 

This is one of the main reasons APMs matter in iGaming. Customers usually prefer a payment method they have used before. They do not necessarily want to register for another service just to deposit money at a casino.

APMs can be used for:

• player deposits;
• withdrawals;
• account-to-account payments;
• local payments in specific countries;
• customers who prefer not to use cards.

There is nothing wrong with using cards. They remain an important part of the iGaming payment mix. The problem starts when they are treated as the only option.

A card can be declined by the issuing bank, blocked because of gambling restrictions or rejected because of a transaction limit. Sometimes the customer does not even know why the payment failed.

Crypto has a different set of issues. It can be useful for certain customers, but it requires a wallet or another service for many users. Cryptocurrency prices can also move considerably, which makes it less straightforward for customers who simply want to deposit and play.

A declined card payment does not always mean that the customer has no money. The issuer can reject the transaction because of its own risk rules, authentication may fail, or the payment can hit a limit.

Chargebacks are another part of the picture. When a customer disputes a card transaction, the merchant has to respond to that dispute and provide the necessary information. With a large number of transactions, dealing with disputes can become a regular operational task.

Bank payments work differently. The customer sends the money from their bank account, so the transaction is not processed through the same card chargeback mechanism.

Regulation can make the choice of payment method even more important.

This is a good example of why payment methods cannot be selected once and then used everywhere. The rules can be different from one market to another.

An international iGaming business therefore has to look at the local rules before adding a payment method. Licensing requirements, customer checks and transaction restrictions can all affect the final setup.

There are several APM categories that are commonly relevant to online gaming. Bank payments are useful for customers who prefer their normal banking app. Open banking makes the same type of payment more direct, while e-wallets and vouchers suit customers with different habits. 

Bank transfers are one of the most straightforward alternatives to cards. The customer pays directly from their bank account, and the money reaches the operator through the relevant banking system.

SEPA Credit Transfer is used for euro payments across the SEPA area. SEPA Instant is designed to make funds available on the receiving account in less than ten seconds when the scheme conditions are met.

The UK has Faster Payments, while other countries have their own domestic payment rails. For iGaming, bank transfers can cover more than deposits. They can also be used for eligible withdrawals. The same banking infrastructure can be useful for B2B payments as well.

Another advantage is the transaction record. Bank payments normally provide clear information that can be used by finance and compliance teams when they reconcile transactions.

Open banking makes a bank payment easier from the customer's side. Instead of copying an account number, opening a banking app and setting up a transfer manually, the customer selects their bank and approves the payment through the bank's own authentication process.

A typical payment flow includes:

• Select the bank. The customer chooses their bank from the available options.
• Authenticate. The customer is redirected to the bank or uses the bank's authentication method.
• Confirm the payment. The amount and payment details are reviewed and approved.
• Return to the merchant. The customer is redirected back to the gaming platform.
• Receive confirmation. The payment status is updated once confirmation is received.

When an instant payment rail is available, confirmation can arrive quickly. This is useful for iGaming deposits because customers generally expect their balance to update without a long wait.

Open banking can also form part of high-risk payment solutions for online gaming. However, the payment technology itself does not make the business compliant. KYC, AML, transaction monitoring and local regulations still have to be addressed.

E-wallets are popular with customers who already use them for online payments. Instead of entering card details at the gaming site, the customer pays from the wallet.

This can be particularly convenient for repeat deposits. Digital vouchers work differently. They are prepaid products and can be useful for customers who would rather not connect their bank account or card directly to a gaming platform.

Both options have a limitation: local availability. An e-wallet can be widely used in one country and almost unknown in another. Vouchers are usually even more market-specific.

The main advantage of a local payment method is fairly simple: customers already know how to use it.

An iGaming operator may also use local bank rails for regular B2B payouts to affiliates. For example, an operator can pay several partners each month for referred players or agreed marketing activity. Using a local payment method supported in the affiliate's market can make these payouts easier to reconcile and may reduce the need for separate payment arrangements in each country. 

Someone who pays bills through their banking app may find a bank transfer much easier than entering card details. Another customer may already keep money in an e-wallet and prefer to use that instead. The same logic applies when the player wants to withdraw. Getting money out of the account should not feel more complicated than putting it in.

Bank transfers and open-banking payments do not follow the same chargeback process as card payments. The customer initiates the transfer from their bank account and the transaction is recorded through the banking system.

That can reduce exposure to certain card-related disputes. It does not mean that every bank payment is safe or irreversible. Fraud, account takeover and suspicious transactions still need attention.

For a busy iGaming business, the practical benefit is having another payment channel. If one method starts producing a high number of failed transactions or disputes, the operator does not have to depend on it for every customer.

The payment page is often the point where a potential customer either completes the journey or leaves.

Imagine a player who has already registered, chosen a game and decided to deposit. They open the payment page and do not see the method they normally use. There is no guarantee they will try another one.

Withdrawals can cause a similar problem. A player may be happy with the gaming experience but become frustrated if receiving their money takes too long.

That is why payment performance should be measured separately by market. Successful deposits, failed transactions, withdrawal times and costs can show which methods are actually useful for customers.

A payment method should fit the market where the operator is licensed and where its customers are located. Compliant payment solutions for gaming companies also need to support the relevant KYC, AML and transaction-monitoring requirements.

Limits are another practical issue. A method may work perfectly for small deposits but become less convenient for larger transactions. Source-of-funds checks may also require additional information from the customer.

An iGaming alternative payment solution also needs to be checked for local availability. A method supported in one jurisdiction may not be available in another, or it may come with different restrictions.

ABF Pay provides payment infrastructure for businesses operating in regulated and high-risk sectors. For eligible iGaming businesses, the platform supports local payment routes and can provide an account for an iGaming business, subject to onboarding and applicable requirements.

An igaming payment gateway connects several payment methods through one technical integration. For an operator, this can be easier than maintaining a separate integration for every payment provider.

• Define target markets. Identify the countries where the operator needs to accept deposits and make payouts.
• Select payment methods. Choose bank transfers, open banking, e-wallets or other APMs based on local availability and customer behaviour.
• Complete provider onboarding. Submit the required business, compliance and licensing information.
• Connect the payment flow. Integrate the required API or hosted payment page and configure payment statuses.
• Test real-world scenarios. Check successful and failed transactions, cancelled payments, duplicate requests, status changes and withdrawals.
• Monitor performance after launch. Compare approval rates, failed payments, withdrawal times and performance by market.

Supporting more payment methods does not automatically mean better payment performance. Operators should compare each method by market, approval rate, transaction cost, withdrawal speed and compliance requirements.