Organizing a video game tournament is already a time-consuming and resource-intensive task. There are anti-cheat measures to consider, roster management, and much more. But perhaps one of the most difficult factors to manage is distributing eSports prize payments. Handling entry fees and payouts for entrants is an essential part of the process, but it can become complex quickly.
It’s a lot of responsibility for an organizer to handle these payouts and it can quickly become overwhelming.There are multiple things to consider including following tax laws, properly distributing the funds, creating secure payment channels, getting entrants their money on time, paying international entrants, and much more. Instead of dealing with all of these complications, organizers can turn to payout solutions.
Companies like Zappy solve one part of the problem - helping you to collect entry fees and payout winners manually. But you can make Zappy even more powerful with a solution like Dots, which integrates with Zappy and helps you automate payouts. Read on to learn more about Dots or schedule a demo below to see how it can help make you make eSports prize payouts a breeze.
The Problem With Manual Payouts
With eSports tournaments getting more popular and prize pools getting larger, being responsible for payouts can be a daunting task for organizers. Typically, tournament hosts need to manually disburse prize winnings. There are several problems with manual payouts that make the process more difficult for organizers and participants alike, including:
- Manual information collection - Hosts would have to go through the process of collecting all relevant personal information for players so they could pay them after the tournament. Not only is this inefficient, but it’s also not the most secure way to get personal data and financial information. If there are any mistakes, this can also cause bottlenecks and lead to players getting delayed payments as tournament organizers work to hunt their info down.
- Inconvenience - Traditional payment methods like paper checks and wire transfers can be slow and inconvenient for everyone involved
- Errors - Manually processing digital payment methods like Venmo, PayPal and Cash App can get disorganized and lead to human error
- Infrastructure problems - Many eSports participants may be playing from countries where there aren’t traditional banking structures in place that allow them to accept traditional payment methods
- Untraceable - Typically, payments would be disbursed to the team captain, and then the captain would be in charge of disbursing the payments to each team member. This leads to another middleman between the price distributors and the player. And since the tournament hosts are in charge of the whole process, there’s not always official bookkeeping or an organized way to track payments.
In short, manually processing eSports prize payments is simply not an efficient or effective way to get money to winners. With a platform like Dots, you can automate the entire process. Integrating Dots with a platform like Zappy allows the prize money to be distributed directly to a player’s digital wallet, giving them options for how they withdraw the funds or allowing them to use the funds toward future tournament fees.
Integrate a Digital Wallet to Your Platform
Integrating a digital wallet into your platform is the best way to automate payments and increase transparency in the payout process. A digital wallet solution like Dots allows prize payments to be disbursed instantly, giving players access to their winnings faster.
Digital wallets also give more control to the players. Instead of receiving their payments from the tournament host through whatever platform the host selects, they can choose to withdraw from their preferred form of payment like local bank deposit, PayPal, Venmo, Cash App and more. Each individual team member can also have their own wallet, so prizes can easily be split up between teams and paid to each team member directly rather than being routed through the captain first.
Furthermore, digital wallets allow tournament organizers and players to easily track and receive their prize winnings. This provides more transparency and gives tournaments an official record of payments. There won’t be any questions about where payments went when you can pull up your transaction history in seconds. This provides additional security and peace of mind for everyone involved.
Additionally, integrating a digital wallet with Dots allows tournaments to give players a financial ecosystem that allows them to use funds to buy entries to future tournaments. Since players can keep funds in their wallets, it reduces the number of withdrawals and deposits they have to make. They can choose to take their funds out of their wallet whenever they choose, but they have more flexibility with how those funds are use.
Consider Tax Implications
Integrating a digital wallet API like Dots will also make one complicated part of the process much simpler – tracking taxes. There are tax implications when players receive prize payouts, as these winnings typically will be classified as income. Although the classification of eSports winnings may vary based on country, they will need to be reported on taxes regardless. With a digital wallet, tournament organizers can make it easier to distribute the necessary tax forms to tournament participants.
The Dots platform will automate tax form collection and generation. You can automatically send out 1099 forms and other necessary tax forms to both domestic and international players. This automated system is also compliant with KYC, KYB, AML and other relevant compliance regulations. Dots automates these processes, so you don’t have to worry about fines or penalties. Dots can verify your players and ensure that your taxes are in order, giving you everything you need to file with the IRS for disbursing tournament payouts.
Find a Global Solution
If you’re a tournament host that accepts international entries, you need to consider how these players prefer to receive their funds. If you’re needing to convert prize money to a player’s local currency, it can make the payout process more complex and costly. These players still want to receive their funds efficiently, but they don’t want to have to jump through hoops or deal with payout methods that don’t work for them.
With Dots, you can remove the hassles of paying international entrants. Dots makes the payout process frictionless and efficient for these players, allowing them to receive their funds in their local currency. The Dots payout API can automatically convert to over 100 currenciesDots also simplifies the international tax process, providing the necessary compliance and tax forms for these players as well.
eSports tournaments have gone global and many tournaments have participants from multiple countries. If you want to make your tournament as player-friendly as possible, implementing these digital payment solutions is a must. Fortunately, solutions like Dots are easy to implement and cost-effective. Ready to learn more?
Get Started With Dots Today
Dots is the ultimate payout API and digital wallet solution for eSports tournaments. Take the headache out of manual prize disbursement and let Dots handle everything. Learn more about the Dots API today and how it can make your next eSports tournament better. Schedule your demo to get started.