Posted on November 11 2018
The gaming machine industry must establish the right to operate with contactless payments or have its machines effectively lose an entire generation of potential players. That was the conclusion of a workshop held during the Euromat Summit in Brussels. The growth of the tap-n-go society was threatening to leave the industry behind while so many jurisdictions banned the direct use of debit cards for machine play. "The use of these cards is becoming popular in pubs and bars and the average transaction is 9 Euros or its equivalent. Revenues in machines are falling because the bar customers don't need cash in their pockets. Among regulators it is anathema to even think about people putting a bank card into a machine and allowing it to take money directly from your account.
A major retailer like Amazon was experimenting with till-less shops where customers swipe their mobile phones at a turnstile and shop to their convenience, with no human interaction at all. Every cab in London is equipped with a card reader. But the aracade and gaming industry is restricted from this because it is still not yet viewed as 'legitimate retailers' on the high street.
The regulators do not see the benefits that could come from contactless payments in machines. It would enable customers to limit their play. Most tap-n-go payments were restricted in maximum withdrawals per transactions anyway. If you look at the growth of cashless payments in Europe, it shows that 60-65% of retail transactions in Europe are still in cash on an average. But it varies across the EU. In Eastern Europe and Greece, retail payments were still 90% in cash. In Italy, Spain, and Germany, it was still 70% or more, but in the more developed western European nations like the UK, France, Finland, Sweden etc. - it was 50% or less.
The scenario, however was changing now due to several factors - government policy, reduced access to cash, the growth of new payment possibilities and changing consumer preferences. In a European Survey among consumers on how they expect to pay in the future, 52% said by smart phones, 51% said through an e-wallet, 37% said through biometrics, 20% said by virtual reality, 18% said by smart watches, 17% said by use of alternative cryptocurrencies such as Bitcoin.
In the UK itself, there has been a 165.8% growth in contactless payments over the last one year. Regulatory alignments are the only way forward for this industry.
Middle East seems to be more in favour of contactless payments for machine play. Contactless payments may still be hampered in some countries because players themselves seek privacy and might not want to divulge card details to a arcade. There were also discussions on ticket-in, ticket-out but it was generally agreed that this was a half way measure as it would not work everywhere. There are in-house debit card systems available too but this too is recognized to be generally a pricey way to go cashless.
Going forward, will Operators be open to this cashless development? Would customer be happy about using tap-n-go options or making payments via their smartphones? This kind of major change may take years to be universally accepted, and some machine suppliers worry that their products will be by-passed by a generation before this development actually takes fruit. Therefore, is it crucial to bring the regulators on the same boat immediately.