Not All E-Payment Wallets Are Made The Same

April 2022

Nobody likes to be bombarded with unnecessary advertising or excessive verification and compliance measures when trying to purchase something online. It’s particularly annoying when the transaction is only for a relatively small amount. What we see when we use an app and the steps we go through to register and pay for things, come down to complex payment services regulations – but here it is worth noting that not all payment apps were created for the same purpose, so variations to those regulations may apply. Steph Norbury catches up with John Rozek of Game Payment Technology (GPT) to find out more.

The GPT cashless payment app is unique – an e-wallet solution, developed for the industry, by the industry trade association bacta, alongside a company whose staff have built some of the biggest payment systems in the world.

John Rozek is a director of GPT and also Polar Moment, with 26 years of experience in the retail payment sector. Since the GPT app was introduced, other e-payment solutions have also targeted our industry. However, John is keen to stress that none of these were designed for this particular industry and its specific needs.

“We are not a general e-money wallet with multiple uses, allowing people to order goods or pizza, as well as playing games. Players will not find a lot of irrelevant marketing messages and unnecessary hurdles, while using the GPT app. Ours was designed in the UK, only for the UK amusement and gaming machine sector, so the whole player experience is more meaningful,” he says.

Rozek describes himself as a lifetime payment specialist who enjoys working in the regulatory space. The growth in uptake of the GPT app has been strong and steady, terminology he feels comfortable with. “Strong and steady wins the day,” he says. “The financial world can’t have outages, we have never had our customers offline and, as a result, GPT is being demanded by pubcos and operators who realise the benefits of a bespoke industry solution.”

Due to the tailored nature of the GPT app, it can benefit from something called a Limited Network Exclusion (LNE). This is effectively a specific set of regulations designed around the unique characteristics of the users and the usage of the e-wallet – in this case, people who want to play amusements and low-stakes gaming machines.

 “Any organisation offering e-money services falls within the Payment Services Regulations and must become either a registered or authorised E-money institution, unless it can avail itself of a LNE,” explains Rozek. 

‘Individual guidance from the Financial Conduct Authority on GPT’s operational model, and independent advice from the regulatory firm FScom, has confirmed GPT can operate under an LNE. This enables us to gear our risk-based approach to anti-money laundering, including Know Your Customer (KYC), to reflect the specific Game Payment environment. GPT has a sophisticated set of policies for anti-money laundering, counter terrorism finance, fraud and other risks,” he adds.

From an operator and users’ point of view, the LNE also allows GPT to do away with all unnecessary friction in the player registration process, while still maintaining rigorous anti-money laundering controls and the strongest possible player protection (including Yoti age verification via selfie).

Other examples of limited network exclusions include a fuel or store card – where transactions are carried out by a monitored group of people in a restricted set of circumstances.

“The LNE opportunity came about as a result of the Payment Services Directive,” says Rozek. “The aim was to make banking across Europe more competitive and to open up the field to organisations other than banks. In order to support that much broader market, they didn’t want to impose too many onerous regulations in situations where they were not deemed necessary.

However, it is worth pointing out that operating under an LNE is not a lightweight undertaking. “It is a considerable undertaking, and we strive to achieve the highest level of compliance, based on proven best practice, geared to the specific risks associated with our service,” maintains Rozek. 

“We also use the UK’s leading bank owned acquirer, Barclaycard, for our merchant services. They also insisted on reviewing all the guidance we received to ensure we are compliant from a regulatory perspective,” he adds.  

Rozek believes that it is the nature of the relationship with bacta and the wider industry that has led to GPT getting its solution and approach right from the start. “From the beginning, we never tried to impose a solution on this sector and bacta didn’t deliver a brief right away. Instead, we sat down and discussed the issues that needed to be overcome and we opened the discussions up to the membership and that’s how this developed,” he says.

As a result, GPT has evolved to become the market-leading solution best suited to the needs of the pub retail sector and increasingly the FEC and AGC sector too. Twenty-seven operators in the UK are now working with GPT, including Regal, Inspired, and Novomatic.

“Now that we can offer a solution for pool tables, jukeboxes, kiddie rides, and the whole array of amusement machines as well, this is a massive advantage of the GPT app that can’t be found on other e-wallet offerings.” says Rozek.

“The biggest challenge is always going to come down to player sign-up and of course players will typically sign up with their machine of choice, for example because they enjoy a game of pool. However, once they are set up, they will use this method to pay for other forms of entertainment such as the jukebox or the fruit machine and each time it’s the same payment experience from the same wallet.” he adds. “It’s only by adopting the highest possible due diligence at our end that this player experience is kept as frictionless and relevant as possible – which we recognise as an essential factor in the successful take-up of the GPT app,” he concludes.