"The payment process facilitates a direct connection between consumers and merchants. Therefore, establishing a strong payments strategy is vital to generating a profit from online video games."
Vladimir Polakovs, Senior Researcher at ECommPay, shares his thoughts on the most important nuances affecting the payment performance of video gaming projects.
Over the past seven years, we have witnessed global video gaming revenues double from $57 billion to $108.9 billion annually. Industry predictions expect this growth to continue until the end of the current decade, exceeding $128 billion by 2020.
The dramatic rise of video gaming is associated with the immense popularity of app games in recent years, alongside the internet technologies permitting gamers to buy games online, to play and compete with users worldwide, and even to financially support developers through crowdfunding platforms. In fact, online video games (mobile, browser, PC/console downloads) now comprise nearly 80% of all revenues.
Entrepreneurs are continually looking to capitalise on video gaming growth to propel the industry forward. The continual introduction of new games, technologies and services makes the market increasingly competitive. To gain an advantage against competitors, companies active in the video gaming sphere turn to capable payment partners to improve their payment performance.
The payment process facilitates a direct connection between consumers and merchants. Therefore, establishing a strong payments strategy is vital to generating a profit from online video games.
Each payment solution is unique, offering a selection of industry specific features and technologies. To ensure maximum conversion and retention, each step of the payment process must be engineered for customer convenience and maximum security.
The power of design
The payment page is the final step of the customer journey. To guarantee successful transactions, the payment page must reflect your brand, e.g. colour scheme, font, theme, while simultaneously facilitating a smooth, streamlined payment experience, whereas the user interface must be simple, intuitive and avoid any excess redirects, which could cause customers to abandon their purchase.
For maximum efficiency, the payment page should be adapted to all possible devices, including mobile etc. An experienced payment provider is likewise capable of running A/B testing on your behalf, selecting the best possible combinations depending on audience specifications.
Payment methods as a bridge between merchant and consumer
For the majority of online video gaming businesses, payment methods are the only direct connection to consumers and the only means to generate profit. Therefore, establishing a strong payments strategy is vital for success.
Choosing the right payment methods will rely on the following criteria:
· Geography – payment methods can vary by location and accessibility. To reach your target audience you need to ensure you have the relevant local and international systems available.
· Timing – some payment methods, such as mobile carrier billing or e-Wallets, can offer instant deposits, whereas cryptocurrencies or banking transfers may take up to several days. Ensure your set of payment instrument suits your business model.
· Security – fraudulent incidents lead to financial losses. Identify the potential risks of particular payment systems to negate them before they arise.
· Value – the only thing more diversified than the global payment landscape is the price of payment instruments. Choose the best options in terms of price/relevance and make sure to account for the costs of integration and the IT expertise required.
· Relevance – even if some payment methods are extremely popular in certain regions, they might not be relevant to your business model or industry. Identify the requirements of your target audience and select your payments portfolio accordingly.
Convergence between security and conversion
Exploring and understanding the technical features related to various payment methods and payment features, is integral to improving conversion. For example, though single click transactions are known to significantly increase conversion rates, the feature offers limited security measures, opening your business up to the risk of fraud.
However, features such as cascading and smart routing, which strive for higher payment acceptance rates, do not carry the same level of risk. In fact, both can dramatically boost your conversion by re-attempting failed transactions or efficiently routing card payments.
Though strong security measures are believed to have an adverse effect on conversion rates, the lack of proper protection can carry a higher cost by increasing the likelihood of fraud and chargebacks. However, you shouldn’t worry about trying to choose between the lesser of two evils. Balance between security and conversion is attainable.
Card validation features allow you to effectively validate new customers and hence mitigate the possible risks posed by inaccurate user details or insufficient funds. Investing in a secure risk management system and setting intuitive filters based on payment behavior and geography increases your chances of recognising potential fraud.
To reassure customers, merchants must facilitate effective communication to resolve any payment issues. Before claiming a chargeback, banks require users to attempt to solve the issue with their service provider. In providing live chat, 24/7 support, or other means of instant communication, you can protect against unnecessary losses.
Understanding payments is now, one of the most fundamental parts of any business strategy. It is the channel where online gaming operations generate their profits. Ensuring that you can provide a smooth customer journey, defend against potential risks and the financial burden they carry, integrate relevant payment methods and instruments, and delicately balance convenience with risk management, could vastly improve your payment performance and propel your video gaming project to new heights.
Come and see us at gamescom, in Hall 2.2 Stand A-042 or contact Vladimir Polakovs at email@example.com