Bitcoin Payouts

Boosting revenue with digital currency disbursements

We have conducted a case study on the benefits of digital currency payouts for the gaming industry. This vertical serves as an exemplary case for many types of e-commerce merchants. The in-depth analysis discusses how the Payment21® payout solution helps licensed gaming merchants to expand market share and realize the potential of a new target group. The online gaming industry is a crowded one with hundreds of payment options tailored to the regulatory requirements of many jurisdictions. Smart gaming operators clearly know they have to do something different to stand out.

The way to make it happen is by adding alternative payment methods and reaching out to untapped demographics. Addressing the global payment needs of unsaturated emerging markets offers substantial growth opportunities. supports gaming merchants to meet the demand for payouts in Bitcoin and benefit from digital currency while maintaining Anti-Money Laundering-compliance standards with regulators and banking partners.

A regulated solution

Our digital currency payouts solution gives merchants a cost-effective tool to pay their users and suppliers across the globe in a safe, convenient and compliant way. As an AML-compliant digital cash processor, we can handle all of our clients’ specific regulatory requirements, even when our merchants are multinational enterprises dealing with multiple jurisdictions simultaneously.

By working closely with, gaming operators evaluate how their customers could potentially use digital currency payments in their platform. We’ve identified the need for a solution that assists merchants in accepting digital currency payments risk-free in exchange for their products or services. More importantly, we’ve also seen the need for solving a much bigger gap in the payments space, which is why we’ve incorporated a digital currency payout solution to pay players and affiliates.

Once tried, merchants and their customers alike love bitcoin payouts. It is perceived as an additional win. Many players regard digital cash as an object of great value, such as traditional collector coins made out of gold. Tech-savvy players appreciate digital currency as a smart investment with added value in the future. In this context, digital currency functions as a bonus that one stores in a piggy bank on a secure cloud allowing players to save and spend digital money at their own discretion.

Changing the game in payments

Digital currency is a real game-changer for the gaming industry. By offering a solution that facilitates cross-border payments in real-time, operators can expand into new regions. This can help merchants reach new players in emerging markets where it can be difficult to pay over the Web because of high transaction costs and lack of access to banking.

Payment21® offers two distinct payout procedures that can increase gaming volume. A fully-integrated real-time payout solution and a more traditional procedure that provides batch processing of mass-payouts.

Real-time payouts – Unheard of in the industry

The Bitcoin payout solution enables merchants to offer fully automated real-time payouts to their users and affiliates directly from their own website interface. Users can request withdrawals by clicking on a customized payout button powered by Payment21’s API. The payout button appears in the player account and offers global access to the cryptocurrency.

This real-time payout platform facilitates the exchange of legal tender, speeds up clearing and settlement of payments over the blockchain, reduces overhead and eliminates the need for manual reconciliation on the accounting end. The award-winning Bitcoin cashier system was designed to ensure merchants’ compliance with gaming regulations, industry-specific Know-Your-Customer best practices, and the particular AML-compliance needs of banking partners.

When users want to cash out they simply start a payout request. The system checks the balance to make sure the player has sufficient funds to cover the sum requested. If the funds are available, they can be sent directly to the player’s Bitcoin wallet.

Players are presented with the real-time Bitcoin exchange rate, so they know how much they will receive. Users can easily initiate and control transactions themselves. Payment21® manages cash flows of merchants and their customers to ensure both liquidity and convenience at the same time. 

A wallet-agnostic system combined with a debit card

The system is wallet-agnostic. Any kind of Bitcoin wallet can be utilized. Users may employ their preferred wallet-brand. Industry-standard payment protocols are applied enabling both a better customer experience and better security with no additional administrative effort, and a quick and straight-forward KYC-verification process. The customer is king. By default, payees are not prompted to use the proprietary wallet of They are free to use their own wallet.

Furthermore, the payout solution can be easily combined with a debit card allowing users to load funds from their bitcoin balance, and spend traditional currency online and offline anywhere Visa or MasterCard are accepted. Also, the card supports ATM withdrawals in cash internationally.

Mass payouts using batch processing

When a gaming operator wants to do a mass-payout transaction, the merchant just starts a batch payout request from the admin page and funds the account with the correct amount by wire transfer. Payment21® processes the money and its associated payout-requests semi-automatically, although stop payments may be transmitted via the API on a case-by-case basis. The platform handles bitcoin payouts to the recipients’ wallets, and sends email notifications to players informing them about the available balance. Once the player logs in to redeem the payout, compliance checks take place. 

Benefits for merchants

Some of the key features include the following:

  • Increased volume and accelerated cash flow.
  • Higher deposits from new customer segments.
  • Merchant expansion across all jurisdictions and serving new regions.
  • Additional business due to marketing buzz in the Bitcoin community.
  • No exposure to bitcoin volatility because of real-time exchange with legal tender.
  • Savings in payout fees: 1% compared to significantly higher fees of competing methods.
  • Zero consumer fraud because of no chargebacks.
  • Lowering of the minimum payout threshold.
  • Technology-driven solution supporting merchants to enter the cryptocurrency space using regulatory intelligence and mitigating risk.
  • Payouts done in real-time or via batch processing in delayed-mode.

How much additional money can be made?

The business case comes with some pleasant numbers. Merchants adding digital currency as a payment method should be prepared for a surge in volume. Within the first three months of introducing the cryptocurrency, merchants usually report noticeable higher transaction volumes than before. The increase is often substantial and sustainable. The results can be split into incoming and outgoing transactions.

Typical benefits include the following:

  • Incoming Transactions: An increase of up to 5% in volume across all customer segments.
  • Larger Transactions: There is a significant increase in the number of larger tickets that can go above $500 USD on average. Merchants often double ticket sizes in this new segment.
  • Payouts in digital currency: A shift in volume of up to 15% with a higher percentage of new players.

Furthermore, offering payouts in digital currency creates a self-perpetuating cycle since players are inclined to use their digital currency as a deposit method.

Cost-benefit analysis

Payment21® recommends that merchants perform a cost-benefit analysis prior to introducing digital currency payments. Payment managers at gaming operators are advised to calculate volume increases and provide forecasts to facilitate management’s decision-making.

As a rule of thumb, the following formula can be applied:

  • First, depending on the merchant's licensing status, add a lump-sum of 1% volume increase for all applicable jurisdictions in Western Europe and North America based on your existing turnover.
  • Second, analyze your potential number of new players in emerging markets and consider a max. 5% utilizing digital currency for deposits, and max. 15% requesting payouts in digital currency.
  • Third, sum up the number of new players and the additional estimated customer lifetime value (CLV).

Eventually, merchants should arrive to an estimated figure of the new business the company was able to generate by adding bitcoin.

Things to consider before adding digital currency

  • Demand from a new customer segment.
  • Growth opportunities in emerging markets.
  • Licensing status.
  • Regulatory requirements of gaming authorities.
  • Regulatory requirements of financial authorities.
  • Compliance needs of banking partners.
  • Studies show that digital currency users are mostly tech-savvy males with above-average disposable incomes.
  • They are known to be young, urban, professional, intellectual digital natives – hence the term YUPIDs is applied to this special segment of Generation Z – the so-called "Post-Millennials."
  • Acquiring this target group early on makes a lot of sense because they will be the big spenders and decision-makers of tomorrow.
  • The following emerging markets are suitable for digital currency payments: China, Hong Kong, Macau, Taiwan, India, Pakistan, Bangladesh, Philippines, Vietnam, Malaysia, Thailand, Indonesia, Japan, South Korea, United Arab Emirates, Argentina, Brazil, Colombia, Russia, Ukraine, Georgia, Kazakhstan, Egypt, Kenya, Nigeria, Ghana, and South Africa.

Regulatory considerations

The first thing payment managers of licensed gaming operators need to consider is regulatory requirements. The most important question to ask is the following:

Is your Bitcoin payment service provider regulated?

If not, then you had better watch out. We’ve seen increased demands for supporting documentation from gaming regulators and banking partners. Many different rules apply. For example, licensed gaming operators and their banks cannot accept players from the U.S. Businesses run the risk of losing licenses or be banned from markets if they are caught using digital currency to circumvent laws, or if they work with an unregulated Bitcoin processor. That`s why it is advisable to carefully evaluate the regulatory framework and the jurisdiction of your PSP prior to entering into a third-party processing agreement.

A fully regulated Bitcoin PSP

Payment21® is a fully regulated Bitcoin payment service provider. As a registered financial intermediary with the Swiss Financial Market Supervisory Authority, the processor can provide the necessary regulatory framework to accept digital currency in any permissible jurisdiction.

There are strict rules about how to verify a customer and to whom a payout can be paid, and how to maintain transparent audit trails. All of these specifications are already built into Payment21’s system.

For gaming merchants, it is vitally important to have all the compliance items covered to the fullest extent. Regulators and risk-averse banking partners are increasingly demanding that merchants work with a regulated Bitcoin processor that is licensed as a financial intermediary and provides AML-compliant transactions including proper KYC-practices.

The AML/KYC Profiler™ operated by ensures compliance with Anti-Money-Laundering laws, rules and regulations, including Know-Your-Customer policies. It is built for enhanced Due Diligence and person-checks by a dedicated agent utilizing regulatory intelligence and compliance analytics. The service facilitates the creation of Form A statements (record of the economic beneficiary) and Form A1 (Declaration on the origin of funds), assists in reconciling data to prevent financial crime, and ensures tax-compliance.

Bottom-line – become more competitive

The increased interest in digital currency seen in the online gaming industry and others such as the affiliate network sector highlights the business opportunities available in emerging markets. Bitcoin payouts solve a real problem for merchants facing limited settlement capabilities in some of the most densely populated countries in the world, helping gaming operators to finally reach out to players in underbanked regions and more efficiently serving new customer segments. This payout solution contributes to the bottom line of merchants and makes the business more competitive.

Begin accepting digital payments in 5 easy steps