Show #127 – Dave Roe of Mazooma Joins to Talk Bank Account-Based Payments in iGaming

On today’s show, Dave Roe, the COO of Mazooma joined to discuss payment processing specifically for the iGaming space.

Show notes from Dave Roe Interview

Ryan Knuppel:

All right. Welcome back to another episode of the Knup Sports Show. I’m your host, Ryan Knuppel here with you each and every time. I really appreciate everybody that tunes in, listens to this show, gives us just a few minutes. We love to talk iGaming. We love to talk everything in the sports and iGaming space. Today we have another guest with us to give his path, his journey, and talk a little bit about payment processing with us today. We have Dave Roe, the COO of Mazooma. Dave, thanks for joining me.

Dave Roe:

Hi to everybody.

Ryan Knuppel:

How are you today, Dave? You doing well?

Dave Roe:

Yeah very good, thanks and yourself?

Ryan Knuppel:

Man, I’m doing okay. I’m doing fine. It’s the middle of the week, I guess it’s not quite. It’s Tuesday as we’re recording this and all is good. All is good. I’ve been enjoying some of this Florida sun and I’m trying to get back to some normal life as we fight out of this whole COVID pandemic that we’ve been dealing with for the last 12 months. So, how’s everything on your end? Everything’s safe and sound?

Dave Roe:

Yeah, getting that way  over the side of the Atlantic, in London. Not quite the same weather as you enjoy, but yes, certainly things are starting to get back to normal, so looking forward to even more normalcy in the future.

Ryan Knuppel:

Great, great. Well, I want to dive right in here. So we have a lot to talk about, I want to understand more about Mazooma and all of that, but first I’d like to hear a little bit about yourself and maybe how you got to where you are today. Why don’t you give us a little, a brief background of yourself and maybe your work path leading up to Mazooma?

Dave Roe:

Yeah, sure. So my career in payments started back in 2002. I actually joined what was then the Skrill, which became part of the Paysafe group, as the fourth employee. And the real mission of that company from the very beginning was to provide payments services to the online gaming, gambling sector. Back then, there was really very few payment companies, which were focused on online gambling and the market was really just opening up from an online gaming perspective. It was not long after the dot-com boom, and they were really the first online-only gaming merchants machine operators, which were online back then. And there was a lot of challenges to these merchants and the kind of incumbent names hadn’t really established themselves online at that point. And we were really one of the first movers in a lot of areas to not just focus on how do we convert a consumer into a paying player, but also building up that loyalty as a payment option as well.

Dave Roe:

So I spent the best part of 13, 14 years working at Skrill, where we fill out the wallet proposition and bank based payments, prepaid cards, all that kind of thing. And then soon after that, started working at Mazooma where we’re absolutely focused on bank based payments, alternative payments for the online iGaming sports wagering industry. And I’ve been doing that for some time now, and obviously been very excited by the regulatory changes that have been happening state by state in the U.S. I think that online gaming really is the area that is one of the biggest challenges from a payment perspective. And because cards are not necessarily that have the same acceptance rates as they get in other areas of e-commerce. So offering different options to operators to receive payments from consumers is almost the most important in gaming than anywhere else.

Ryan Knuppel:

Wow. What a path you’ve had, and you’re a hundred percent, right. I’ve been in iGaming, online gaming, it’s kind of just now been called iGaming. I feel like over the past 10, 20 years, I’ve been in the online gaming space as well and man, payments have always been the number one kind of issue, right? The number one thing. Well, I can’t get money into my account or I’m having issues depositing into this, or that. Always was something you’d hear from the user side of things. Skrill hit home with me as well. I’d heard of Skrill and use Skrill back in the day. And so that’s a pretty cool path to lead to where you are today. And you led me right into a kind of my next question.

Ryan Knuppel:

I’m in the United States so I’m very focused on what’s going on here in the U.S. and all the state by state regulations. We know it’s going to be a huge boom over the next three to five years. So you mentioned other options and things that Mazooma is doing to kind of help this whole payment issue or this whole payment problem. Could you expand a little bit on, I guess, what are those other options besides credit card. Maybe there’s other options that Mazooma works on or help spring to the users?

Dave Roe:

Yeah, I mean, as you say that the cashier experiences is extremely important for the operators and is the first hurdle, if you like, the player has to go through going from an acquired customer where they’ve paid good money for, to becoming an active customer. At Mazooma, we’ve absolutely focused on bank based accounts or account transfers and effectively making a rail or payment rail like ACH work in the more modern world. And through most recently, our partnership with Plaid to offer also your best in class user experience, when someone is paying, it could be their first time payment or a subsequent payment where they can pay with just one click, we feel that’s an absolutely compelling proposition for operators. And almost more importantly, the player themselves as they come to navigate that cashier experience.

Dave Roe:

So, as you say, it is quite a challenge and especially with the credit and debit card acceptance states not being like in other industries. We’ve also most recently just last week, just announced that we launched instant withdrawals, and then that’s through the real-time payment network that’s operated by The Clearing House. And that’s really a game changer. We did a lot of research around how do consumers and players interact in terms of a withdrawal perspective and having access to the winnings in almost real time makes a huge difference. Makes a difference in terms of knowing that the money’s in their bank account straight away, the messaging that they get is no longer this ambiguous, oh you’ll get your money in two to four days, like with ACH. And then there’s no kind of positive confirmation that it’s reached the bank account. So it really is, like I say, a big game changer and something that will build that loyalty with the operators as well.

Ryan Knuppel:

Boy, that certainly is a game changer. I’m just speaking from a user perspective and wow yeah, that’s always been one of the biggest issues I’ve had with any online… not even just the gaming space, but any space where you’re depositing money into an account, and then you’re trying to get it out and you’re like what it’s going to be a week or even at that they just kind of say: Hey, we will get back to you when we can get you your funds or whatever. And I’m like, well, wait, this is not good. It was easy to get it in. It was hard to get it out. So I think that’s a huge game changer on you guys’ side where you’re able to kind of make that more transparent, get that money quicker. And it just adds the trust for users to work with those operators a little better.

Ryan Knuppel:

So that kind of leads me into the next question. Which operators, and I don’t know if you can name names of what operators you’re working with because I’m assuming you guys are kind of behind the scenes when working with operators. It’s not like this “Oh, they work with Mazooma.” is a public type thing, but can you talk a little bit about the companies and the operators that you’re working with here, especially in the United States, I guess?

Dave Roe:

Yeah, sure. So we’re currently working with our pilot operator at the moment, which is PokerStars and we’ve got several other merchants hoping to launch within in the coming weeks. Probably BetMGM being another one as a fast follow. The feedback that we’re already getting is really positive. We’re seeing in a dollar amount, sometimes 80, even sometimes 90% of the withdrawals are actually going through RTB rather than ACH. I think one customer even received $50,000 immediately into their checking account. So that was definitely a happy customer there.

Dave Roe:

What we also found in the research that we made is that very quickly as in a lot of things the user’s expectations really change once they have that better experience. You know yourself, if you’re used to using Uber’s, rather than regular taxis, you pretty much will always try and use an Uber rather than the regular taxi or you’ll use Amazon, over, a regular online shop because of that experience that you get. And similarly with the instant withdrawals, once you have that experience and you go back to two to four days with regular ACH, then all of a sudden you’re not getting the experience that you’ve become accustomed to. So yeah, kind of big shifts in that experience, expectations that we’re already starting to see.

Ryan Knuppel:

Interesting. Now this wouldn’t be a payments’ conversation if I wouldn’t ask this question and because all we’ve been hearing now is the future of payments is crypto and Bitcoin this and Bitcoin that, and all of the above. What is Mazooma’s, not stance, I don’t want… stance, isn’t the right word, but what are you guys doing on innovation? Are you guys looking at crypto at all and trying to figure out how to be a part of that or tackle that payment piece as well? Or is that something completely outside of your scope that Mazooma works through?

Dave Roe:

I mean, I think that there are a few things to say. I mean first of all, as a payments company, we’re always looking at what’s next and how can we add more value, whether it be to our existing merchants or the players in other industries, I think crypto is starting now to show more prominence in terms of actually people wanting to pay with it rather than just holding it. And we certainly see that within the iGaming industry, the operators are starting to look at it more positively as offering it either through either directly or through third parties or other payment companies. I think it’s fair to say that here at Mazooma we’re keen to remain focused on bank to bank payments, given where the innovation that’s happening purely within that with things like real-time payments.

Dave Roe:

And we expect to be able to offer real-time payments on the way in, so on the deposit side before the end of the year. So that’s really going to be a big focus of ours to bring that to iGaming in 2021. I think that what we’re also looking at is how can we also facilitate the crypto exchanges to be able to pay out via currencies in exchange for cryptocurrencies as an option, not necessarily completely related to iGaming, but quite closely obviously, as more payment processes and third parties are bridging that gap between players in their cryptocurrencies and being able to use it for iGaming. Look, obviously it’s one of those areas keeps getting hotter month by month and I think also the demographic is a good fit from a iGaming and cryptocurrency perspective.

Ryan Knuppel:

Sure, totally completely makes sense. That was a great answer. I appreciate that. This is Dave Roe, the COO of Mazooma. Dave, I just have a few more minutes. I want to take a few more minutes of your time. I won’t keep you, I know you’re really busy. I want to shift gears just a bit and just talk iGaming for a second. And specifically iGaming in the U.S. I know being from London, being from the UK, you’ve kind of seen iGaming and sports betting happen over there, right? I mean, things have already kind of transpired and now we’re starting to see it in the U.S. Do you see any similarities on what’s going on here in the U.S. to, I guess what happened back in the day I will call it, kind of in Europe and in U.K.?

Dave Roe:

I think that there are some similarities, but also some differences. I think that there was a lot learned probably from the state regulators around what has already transpired over the last, probably 20 years in Europe. I think that in the States, there’s a combination obviously of different players from the big brands in Vegas, but also brands that have come over from Europe and beyond to take advantage of the opportunity that presents itself in the U.S. I think that there’s probably going to be a lot more emphasis around things like responsible gaming, particularly not sure how much you know, but in the U.K. it seems to get more and more strict every couple of years in terms of giving players that protection primarily from themselves but I think that there’s a lot of similarities as well.

Dave Roe:

Obviously the collaborations between the iGaming operators and the large sports teams, which is huge here and huge obviously in the States. So, yeah, I mean I think that the one thing that is obviously still very much rings true are those expectations of the players. As they get better experiences across their digital lives, they expect the same when they’re using an iGaming operator. And I think that really drives also innovation, right? Keeps pushing the industry to give players the expectations outside the experiences that they expect.

Ryan Knuppel:

Definitely. Well, I really appreciate that insight. All right. To close here most of the listeners here probably have some sort of a stake in iGaming some sort of… something and iGaming who knows what exactly they do, but anything, any last words, anything that maybe you guys Mazooma is looking for that listeners could help with, or what’s the path? What, are you guys looking to do? Maybe what’s the future look like, any last words here before we close?

Dave Roe:

I think that the thing that we are always striving to understand is as a payment processor, you’re kind of in the middle a little bit, right? Your ultimate customer is the operator because they’re the ones that you’ll have the long sales cycle for, and you’re always looking to build the relationship over the longer period of time. And, and the players they’re coming through thick and fast and we’re always looking for more and more insight into what is important to a player at any of the different stages of their kind of iGaming life cycle if you like, from the person has never gambled online before to somebody that has been… they’ll be doing it for some time, all the way up to your kind of VIP style of customers.

Dave Roe:

So this is for us, our goal. This is why we do try and do as much research as we can. Obviously we don’t have the same interaction, the same day-to-day understanding of the players, like the gaming operators do. And obviously we see them switching from operator to operator, right? So what they’re looking for is it always something related to experience? Is it something related to the odds that they’re getting? Is it superstition? All of these different factors that come into play when they’re choosing different operators or different options that they see?

Ryan Knuppel:

Amazing. Awesome. Well, Dave, I appreciate it. If people want to learn more about Mazooma, where would they go? How would they find out more about you guys,

Dave Roe:

Mazooma.com, also our LinkedIn page and also Twitter.

Ryan Knuppel:

Amazing. Awesome. Well, Dave, I appreciate your time. I know you’re a busy man, so I really appreciate you giving me a few minutes here just to talk payments and educate me as well. I’m a rookie in that space so I love hearing about it. And I know it’s a very much needed area in this iGaming space. I love that you guys are developing that space and having the consumer at the forefront of all those discussions is what’s amazing. So I appreciate all you guys do at Mazooma. Thanks again for joining me, Dave.

Dave Roe:

Thanks Ryan, appreciate it.

Ryan Knuppel:

All right, everybody. That was Dave Roe, COO of Mazooma. I appreciate you guys all tuning in to this episode of the Knup Sports Show. If you ever need anything, feel free to reach out, my name’s Ryan Knuppel. Once again, you can find us at the knupsports.com, Knup Sports Show search in Google you’ll find us out there as well. Until next time everybody, stay safe and have a great day. Talk to you soon. Bye bye.

 

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