Flexia Discusses the Cashless Ecosystem in a GI Friday Exclusive Interview
Featured in Gambling Insider’s GI Friday, July 15, 2022. Flexia CEO Craig Libson and President Scott Walker detail the value of creating a seamless cashless experience for players which helps keep funds inside the casino, in this exclusive GI Friday Guest Interview.
GI Friday: How important will the evolution of payment solutions, particularly going cashless, be for casino operators in improving the gaming experience for players?
Craig Libson: We’ve always been very engaged with land-based casinos and with payments. We realised early on that “cashless” is a misnomer for what’s going on in the technological transformation of payment solutions. A lot of people simply believe that: “if I can get money into an account without using paper and then I can get it back out without using paper, I’ve created cashless.” The truth is, what’s really behind all of this is a transformation of how you engage with a customer from the minute you onboard them into your casino, how you treat them inside the casino along with providing them the ability to use digital payments both inside and outside the casino. It’s about the ability of the casino to engage with the customer even in transactions that are non-gaming.
“The point we always stress when we engage with the operator is that the funding aspect is just the tip of the iceberg of the many benefits of cashless’’
For example, our programme ties into the loyalty programme of the casino, allowing a customer to earn loyalty points for spend outside of the casino – similar to the way an airline credit card works. This data can be used to customise promotions and the data can migrate between platforms, so a lot of times the casino operators or the developers of these other platforms come to us to talk about going cashless in its simplistic form, and we are excited to explain the extent of what we can do. Once we teach engagement, it enables clients to rethink the way they understand cashless payments.
GI Friday: What are some of the ways improved engagement with players drives players back into casinos?
Craig Libson: You can look at a couple of areas to substantiate this. The casino management system and its loyalty programme generate certain data, but the data we can share on players from outside the casino – what they spend money on and what their interests are – is very meaningful to casino marketers and operators. More and more land-based casinos are engaging with their customers through mobile gaming, sportsbooks, and online casinos. The ability to know what your customer is doing at various times of the day allows you to tailor an experience for them when they’re at your casino, so they’ll come back, they’ll be retained. If you see that your customer enjoys going to restaurants outside the casino, you can look at ways to push them to go to your restaurant inside the casino and keep that money on your balance sheet, rather than let it leave your ecosystem. So, the data provided by our cashless solution is opening a whole new world of opportunities to drive player retention.
GI Friday: How can operators cultivate an optimal mix of tender types for players? What does an optimal tender type mix look like?
Craig Libson: We created our product with the idea of frictionless liquidity and the ability to move funds back and forth between accounts – as frequently as the customer wants and where the customer wants. We subscribe to and provide the basic idea that you can walk away from a slot machine, use online commerce, go to a store, and when you go back into the casino your rewards card is immediately available with all the new data of what you’ve spent and where you spent it.
Beyond that, operators are supplementing this by asking how you get cash into the ecosystem and keep it there. When we look at this, there’s a variety of factors and you have to apply a mix of all of those. For players there are economic factors – what will it cost to get money in or out of the casino; logistical factors – am I getting money immediately or am I having to wait a day; what’s familiar to the customer – bank accounts, Venmo, PayPal, etc. Players don’t want to create a new set of tender options; they just want to be able to engage. Of course, there’s also a lot to consider around compliance and risk, while finding the right mix to be appealing to all customers, depending on if they want things immediately or for free.
GI Friday: Picking up on creating an ecosystem, can you expand on ways in which money is kept inside the casino?
Craig Libson: We built our platform to enable a variety of separate use cases, so that includes both open and closed-loop ecosystems. We’ve received a lot of positive responses from casino operators about Flexia’s ability to encourage a customer, who won $50 or who has 500 loyalty points, for example, to not take the cash out and go to a mall somewhere, but instead spend it within the casino space. The ability for our system to take data from different terminal types and systems, and say I want to spend that $50 I won at the casino restaurant, we can not only enable that but also communicate marketing messages through the promotional tool in our app. If a casino sends a coupon via the app to a customer which would save them 20%, the chances are they would go and spend the winnings at the casino’s restaurant. Instead of wiping $100 off your balance sheet as an operator, you essentially gave $20 at your restaurant to reclaim the $80. This, at the end of the day, is keeping money in the ecosystem. It not only keeps the customer on-site but there’s a real economic benefit to it too.
GI Friday: Regarding open and closed-loop systems, some payment providers believe closed-loop systems should be promoted exclusively? Do you believe one or the other is better or is it best to have both?
Craig Libson: I think you have to provide both, but you have to make the transition between using each system as frictionless as possible. You not only have to best use the technical capabilities but also the logistical capabilities of the platform. You also must ride the fence in terms of compliance and network rules. If, for instance, Mastercard® doesn’t want a particular transaction happening in its account, then you must be nimble and provide solutions to work around that, without violating the rules. There’s a lot that can be done technically, but it’s all about thinking it through and making sure you’re providing a seamless user experience.
GI Friday: What plans does Flexia Payments have over the next 18 to 24 months?
Craig Libson: We’ve engaged with several major platforms to expand our footprint here. We’re also engaged with some of the major online platforms and some of the more innovative gaming technology products being brought to market. Our focus is on the local casino and repeat customers, so part of what we’re doing is providing flexibility to use funds inside and outside of the gaming location. Also, we’re continuing to add new funding sources, whether that’s real-time payments, crypto wallets, and the like. We’re also engaging with Tribal casinos that have closed environments and working with them to expand the use of funds, not only in the gaming environment but also in retail locations on the reservation or in the local community. There are a whole lot of fintech opportunities dealing with merchants in a closed-loop situation. We’re trying to find those that are relevant to this customer base and add them in. Again, it’s all about engagement, how many tender points we can have and the mix of tenders. If a player earns loyalty points through the casino, that player has to come back to the casino to reap the benefits of that. Payments are all about creating a symbiotic relationship.
“Data from the casino platform and its loyalty programme becomes really valuable when you add the data we can share on players from outside the casino – what and where they spend their money”
The point we always stress when we engage with the operator is that the funding aspect is just the tip of the iceberg of the many benefits of cashless. Many of the early entrants in US markets have been so focused on just electronic cash-in that they’ve missed the boat on creating customer relationships through the cashless experience. Others we’ve spoken to about cashless say it isn’t so exciting, and I say, well, that’s because you haven’t seen cashless yet. You’ve seen electronic funding, not the true integrated cashless experience. The cashless revolution, the idea of putting the mobile phone at the centre of what the customer is using to engage in gaming activity, not only opens-up everything we talked about, but when you take that and transpose it with the idea of slot machines going wireless on the net – if you look empirically at where the world is going, the move to put the device in the player’s hand, this changes the ability for everything to modernise inside the casino.
Scott Walker: I’ve been in online gaming since 2001 and I have also run casinos, so I believe that the most desirable thing is to have a financial instrument where you can easily withdraw money, easily deposit money and easily shift money between the different systems. That to me is the key to cashless wagering and engaging the customer outside the casino. We feel we’ve accomplished this. Some of our competitors may think they have as well. For me, coming from land-based operations, the ability to connect the two systems – online and land-based, is a big achievement that we believe is going to be very key for us.