As time goes on, society is growing more accustomed to comfort and convenience everywhere online. People do not like to have to memorize passwords and fetch their personal data anymore than they have to. We have thus entered into an era where people can login using third party social media apps, and in terms of financials, leverage third party open banking apps to work wonders for us, saving us time, and opening doors for us.
Services like Wise, Emma, and Tink are aggregating people’s bank accounts, helping them budget, get approved for loans faster, and track their cashflow. People don’t have to go get their credit card to make payments or send their banking data to receive them. For 2025, the industry is projected to hit 35.50 billion USD, with a huge 20.3% CAGR.
For iGaming operators, this has been a godsend. Once, casinos eliminated the need to waste time exchanging and counting cash by using chips and tickets. Now operating online, the wasting of valuable playing time and focus has now been addressed in a similar way now with third party services temporarily sharing data based on permission to complete transactions in no time, even between player accounts.
On top of that, casinos get to avoid having to pay payment providers every transaction.
Open Banking Initiation
Open banking is when gamblers give secure, consent-based access to their financial information. Gambling operators get to access their account info and even initiate payments. This is of course heavily controlled and regulated, and there is no possibility for fraud. The technology relies on application programming interfaces, which are essentially like digital bridges that allow one system to communicate with one another without exposing sensitive data.
It goes in the following method:
- Authorization: the player links their account and are then redirected to their banks official portal to log in. They then grant the ability to initiate payments.
- Bank shares specifically authorized data: via encrypted channels, only the info the casino needs to process the payments, verify deposits, confirm account ownership, etc.
- Instant transactions get to be made through this channel: deposits as well as withdrawals. The platform verifies the funds’ availability and compliance.
iGaming platforms like Odds96 normally have to register as a TPP with a required financial regulator, such as the PSD2 in Europe, although no such equivalent exists in the United States, where they depend somewhat on banking law.
International Payment Facilitation
Players want to gamble on international platforms all the time. A lot of the best tournaments they discover are hosted in other countries, especialy since those games are not available in their own countries. Traditional transfers are pretty slow, taking days and incurr substantial fees. But now the intermediaries are out of the picture and people only have to pay miniscule charges.
Open banking APIs negate the need to deposit in their local currency with no need to convert manually. Otherwise, the process is just too abstract for a lot of players who would otherwise churn and people would be concerned about gambling on a new site that they’re not sure could protect their funds if worst came to worst. Having a modern platform like that enhances the operator’s reputation too.
Personalization
Since they have more in-depth information, operators can see what iGaming companies people engage with, the frequency that they gamble at, and how much they stake as well as when. This allows casinos to offer them a better entertainment product and tell who the VIPs are.
Fraud Better Averted
Since players do not have to provide their actual banking information with the gaming provider, instead letting the casino interact with the bank directly and only receive transaction confirmations from them, there isn’t the chance that fraudsters get their hands on player data. Otherwise, sometimes people can accidentally enter the wrong information too and not get their money.
Players get to play whatever games they love best and not have to use their credentials from their bank to log in, which means some evil-doer can’t snatch them. However, there have to be staunch security measures and abuse prevention standards put in place.
Challenges
There is a ton of regulation that’s a heavy burden on these operators and not all countries are easy to set up open banking in. For instance, in Australia, and Argentina there is a maze of laws based on the state level, where in some states open banking is used and in others it’s still impossible. Also a lot of online casinos use their old legacy systems to plug in open banking but it’s not compatible and would require bringing their systems to the new age. On top of that, different banks and countries have different API standards. A lot of payment methods have to be facilitated too.
A smaller casino might be deterred by the high expenses in making this leap. Also the regulatory hurdles are pretty demanding. Outages, API changes, or maintenance for the bank can temporarily disrupt payments and spoil users’ fun too.
Regulators change their policies all the time to keep the industry accountable and global operators have a hard time staying profitable with the KYC and AML checks in place. There are solutions that don’t offer white labeling. Some of these can only get payments where they hold an account while charging a steep fee and this ends up backfiring on user convenience.
Open Banking Providers
Since dealing with hundreds of banks is challenging with different API infrastructures and they only have so much attention to devote to it, it would be a nightmare to handle alone in terms of cost and complexity. That’s why middlemen do exist to fill that gap.
Tink
This Swedish company is one of the most established open banking platforms in Europe, having integrated more than 3,000 banks in over half of the EU member states, so it has one of the best coverage footprints for iGaming companies. Under one unified integration, casinos can enjoy gamblers from all kinds of countries.
Tink’s core services are account aggregation, payment initiation and data enrichment. Having extra data on their spending habits paints a more complete picture on their gambling behavior which helps avoid problem gambling. Since it has recently been bought by visa, it also has access to a bigger global payments network and regulatory credibility.
Plaid
This is the poster child of open banking in the US, powering thousands of fintech apps from Robinhood and Coinbase to Venmo. It started off helping customers budget and invest better, but eventually it expanded into iGaming too. Since Plaid has a cross-vertical presence with millions of people already using it in everyday apps, there is familiarity and confidence for smoother onboarding. It’s further powered by its big partner MoneyGram.
Trustly
This is the most iGaming-centric third party provider. It specializes in payments between banks and industries known for high frequency transactions. Its most popular product is Pay N Play, which allows players to register, deposit, and start playing in just a few clicks.
