The adoption of alternative payment channels is experiencing unprecedented growth in the world of online gaming. According to Venture Beat, nearly one in 10 Americans has purchased a digital good in the past year.
The same article outlines four payment trends that have been observed among gamers who are purchasing digital goods. However, I think that these trends could well foreshadow more macro-trends that we can expect as consumption of digital goods grows in other sectors too. Let’s take a look:
1. Gamers are using multiple channels to make payments
While the traditional credit and debit continue to be a popular payment option of choice, alternative payments (including closed loop prepaid game cards, smartphone payment apps, electronic transfers, virtual currency, in-game credits and PayPal) are gaining ground. What’s key is that among the myriad platforms available, no single alternate payment method has emerged dominant.
That means there are broad payment preferences among gamers, especially with how global online games have become. What might this mean beyond the world of gaming? In e-commerce in general, merchants should look to cater to the preferences of consumers around the world by having many payment options. As there is no one-size fits all payments solution, limiting payment options risks driving away consumers who may not have the means to use a particular platform.
2. Gamers are interested in the appealing features and benefits of alternative payments
More than half of all respondents to a survey by Magid revealed they were either “interested” or “very interested” in the perks that alternative payment methods could bring. In particular, gamers liked the convenience of not having to enter credit card information at every purchase. In addition, they liked the loyalty points, rewards, and the security of not having a lost or stolen card.
Marketing these benefits of convenience and rewards can increase the use of alternative payments for other things besides online games too.
3. In-app purchases dominate
In-app purchases are driving the revenues of the highest growing mobile games. The highest grossing games (with the exception of Angry Birds) are all free to play, with in-app purchases constituting 91% of game revenue.
As businesses are looking to tackle mobile commerce, they should look to adopting a freemium business model, facilitating payments within their app.
4. Digital Wallets are gaining acceptance
Research shows that an overwhelming majority of gamers are open to the concept of using digital wallets, both online and offline. However, there seems to be a notable difference between men and women in terms of the appeal of digital wallets. Men are more likely (41 %) than women (31%) to adopt digital wallets in the future.
In the digital goods economy, one thing is evident: it is truly global. In order to attract and convert international consumers, it’s important to cater to different regional markets. At the 18th Cards and Payments Asia, the discussion will focus on consumer payments trends in Asia. If growth in Asia is under your priority list (and it should be!) check out the full event details here and grab your early bird tickets by contacting jhonel.namayan [at] terrapin.com