[Column] Shane Leahy: Converging for a better experience; the need for different payment options in the African betting sector
The online betting industry has been transformative for the African marketplace and is now contributing a huge portion to the region's overall economy.
A report released by PriceWaterHouseCoopers forecasts that this year, the betting markets of just South Africa, Kenya and Nigeria alone will be worth a collective $37 billion, demonstrating the huge opportunity for revenue this sector is offering throughout the region.
Mobile money has been a catalyst for this growth in recent years, with the technology’s ability to provide fast, convenient payments, making it extremely appealing to customers wanting to place bets instantly.
This growth in mobile money has been particularly evident amongst millenials in Sub Saharan Africa, with 54% of youths in the region having tried their hand at gambling and 75% of them using their mobile phones to do so.
Not only has mobile money become an extremely popular transaction method for on-the-go consumers, they are also becoming increasingly chosen within physical betting shops across the region.
This way of completing a purchase is now being used across the sector in much the same way as it is in coffee shops, bars, petrol stations and fast food restaurants.
In December 2016, there were an estimated 227 million registered mobile money accounts in Sub-Saharan Africa alone, which is more than its total number of bank accounts.
In a region where mobile money is gradually replacing bank accounts, there is now a huge appetite amongst consumers to utilise these tools to engage in more convenient betting transactions.
However, for the region to fully capitalise on this growth, a greater convergence between betting companies and payments providers is needed to ensure they can provide consumers with a seamless payment experience.
The African market has been fully transformed by mobile payments technology in recent years and the need for merchants to diversify their payment propositions has never been more vital.
Through the provision of different options, companies are able to strengthen their business and empower consumers by giving them more control over how they choose to make purchases.
Through the rise of mobile phone-based money transfer services like M-Pesa, which now has over 27 million users, mobile money is now central to Africa's economy.
Kenya is currently one of the earliest adopters of the technology, which has now led to a growing uptake across various other countries within the more developed regions such as East and West Africa.
The affordability for both the merchant and consumer, ease of use and security provided by mobile money will ensure its continued strong growth in the near future and it is now crucial that betting companies operating in the region acknowledge this huge demand amongst consumers and integrate this popular mechanism into their payment strategies.
The rewards of a wide implementation of mobile payments technology are already coming into fruition in other global industries, such as hospitality and the media. These industries have worked in partnership with mobile payments companies to revolutionize their payment models, giving customers more freedom to choose how and when to complete transactions and in turn opening up new revenue streams and increasing conversions.
With fast and secure payments so deeply ingrained into the success of the betting sector and the African market becoming increasingly mobile-centric, adopting this strategy can provide existing betting companies with a new way to monetize their services and allow new entrants to attract more customers through a streamlined payments journey.
In addition to providing the region with the convenience and security now hugely desired amongst consumers, mobile payments methods can now also help to bridge the gap in much of the region's developing infrastructure.
Today, a successful betting company is just as reliant on its ability to pay-out quickly and efficiently as it is with ensuring bets are placed regularly.
An effective synergy between betting companies, mobile payment providers and telecoms operators across the region can therefore ensure that payouts on bets are not lost during periods of downtime or power outages within Africa's most structurally vulnerable areas, a vital necessity for betting operators.
By working closely with mobile payments providers, the region's betting companies can not only benefit from a higher level of business continuity; they will also greatly improve the overall betting experience of their customers and encourage them to place repeat bets through their platform.
In today's increasingly competitive betting marketplace, this improved customer journey via mobile will prove hugely valuable and can give companies the edge needed to thrive and attract new customers.
Not only does this increased convergence offer significant advantages for African businesses. The growing appeal of mobile money is also reducing the need for use of physical cash or cards and providing consumers with an additional layer of security on a daily basis.
Now more than ever, African consumers are being empowered to make purchases and providing them with more ways to complete purchases will only lead this to increase.
With the appeal of mobile money rising daily, providers are now continuously working to advancing and adapting their platforms, in order to diversify their product and open up their services to more potential partners in global markets.
The rapid growth of the African betting sector is now presenting payments companies with a great opportunity to bolster their own services and successfully enter the region, whilst providing betting companies with the tools required to consolidate their offering and deliver a great user experience.
With clear benefits to both parties, this huge opportunity for growth convergence provides should not go unactioned.
With the demand for fast purchases amongst consumers growing every day, we will undoubtedly see a continued integration of mobile payments technology, not only within physical betting stores, but the entire marketplace.
Providing consumers with different payment options has never been more vital to the success of a business and it is now the responsibility of both betting companies and payments providers to utilize this opportunity to work together in order to improve consumer transactions and remain competitive within the African marketplace.