💼 Do payment managers carry grey-market operators on their shoulders?

💼 Do payment managers carry grey-market operators on their shoulders?

At SiGMA in Mexico, I caught up with an old colleague from a major bookmaker. They’re developing a licensed business in Latin America. He says payments are stable and there’s no stress.

“So Legal and HR are the ones stressing now?”
He laughed: “Of course.”

Someone is making the payments department’s peace of mind possible.

The conversation highlighted something important: the business model determines where costs and risks accumulate. This is one team’s experience, but it gives us a reason to consider the economics of the entire chain.

Outside the local licensing framework, the burden of keeping the business running falls heavily on the Head of Payments.

When securing payment channels spares other departments (Legal, HR, Compliance, and so on) a heavier workload, a payment manager’s value is measured by the margin they preserve and the costs they help avoid.

Thanks to my colleague, I’m increasingly convinced that we fiat payment providers won’t run out of work due to migration to crypto payments: as long as unlicensed operators compete with licensed ones, there will always be demand for fiat rails.

Either way, providers should keep several important points in mind:

1️⃣ Separate the interests of each participant

Players want to deposit and withdraw using familiar, convenient methods. Merchants want to support those transactions at an acceptable cost. PSPs need to remain profitable after partner fees, losses, and liquidity costs.

A merchant’s payment option can mean extra work for the customer (hello, crypto exchanges). An available payment method can then come at the cost of lower conversion.

2️⃣ Examine what sustains your revenue

Liquidity, reconciliation, reliability, and straightforward integration can retain their value across different technologies.

Revenue earned solely by providing access to hard-to-reach rails is vulnerable: easier access means a smaller premium.

Tighter restrictions don’t guarantee higher earnings either: fees can rise alongside losses and falling volumes.

3️⃣ Don’t assign crypto a permanent niche

As long as paying from a bank account is easier for the customer, fiat channels will remain in demand. But interfaces can change.

Crypto has already become back-end settlement infrastructure while customers continue to see familiar payment methods. Wider use of personal crypto wallets could reduce the need for some intermediaries.

At the same time, blockchain alone does not guarantee privacy, control over funds, or an honest payout.

As licensed operators continue to offer familiar payment methods, merchants will keep paying providers to solve that same challenge.

We’ll still have work 🐒

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