Gaming companies have noticed that Latin America is an important region for expanding business and leveraging increasing opportunities in a diversified area. According to data from Statista, the total revenue of online gaming is expected to continue to grow, reaching $3.4 billion in Latin America by 2025.
Despite the huge potential, to fully utilize all possibilities in the rapidly developing market, institutions must overcome some challenges.
Specifically, they need to figure out how to make cross-border fund transfers cost-effectively, quickly, and transparently, and how to operate in different countries while complying with local regulations, and being able to make and receive payments in local currencies.
Localized Payment Systems and Regulations
In Brazil, regulations on this matter have just been introduced. For online gaming companies, it is necessary to have a payment platform that is regulated locally and authorized by the Central Bank of Brazil. In addition, it must integrate with the country's Pix system for real-time payments to ensure transaction security.
Since the launch of Pix by the Central Bank of Brazil in 2020, Pix has quickly become the main payment method in the Brazilian gaming industry, showing an extraordinary development trajectory. By September 2022, Pix facilitated an astonishing 26 billion transactions, totaling $22.4 billion, highlighting its significant impact on the financial landscape.
Its seamless, instant payment feature has been unanimously praised by users, and by mid-2023, its user base will exceed 150 million, which is enough to prove this point. This widespread adoption highlights Pix's leading role and key role in transforming payment transactions in Brazil's thriving igaming industry.
Meanwhile, in Mexico, the Federal Gaming and Lottery Law regulates, authorizes, and controls the industry's operations. Since 2014, several changes have allowed the operation of igaming, but companies must obtain permission from the Ministry of the Interior to operate in the country, and operators must also meet tax, security, and operational protection requirements.
In Mexico, the igaming industry is thriving, with about 66.5 million gamers using various payment methods and platforms to interact and purchase digital content. In the past two years, transactions conducted through SPEI (an electronic payment system developed and operated by the Bank of Mexico) have significantly increased, highlighting its key role as a payment choice in the rapidly growing gaming market.
On the other hand, in Colombia, there is an administrative authorization procedure, and operators must apply through this procedure and comply with the necessary requirements. This measure is aimed at preventing its use for illegal activities or money laundering.
Argentina is one of the countries with strict regulations, which slows down the attraction of foreign investment in igaming, especially since each province implements these regulations. In most cases, it is necessary to cooperate with local entities that support transactions.
Payment Gateways
Just as the internet has completely changed the communication or entertainment industry, the use of digital payments continues to strengthen and support business expansion by providing safe, regulated, and low-cost alternatives.
A good example is that stablecoins will completely change the digital economy, enabling real-time international transactions, remittances, and commerce.
It combines the cutting-edge technology of cryptocurrencies with the stability of national currencies, making stablecoins an exciting development in the financial field.
