Fig: “Shopping with iPhone” (CC BY 2.0) by Jason A. Howie
It might sound like an obvious point but the more payment methods a company is able to offer, the wider their overall reach as far as serving customers is concerned. Post-globalization, there’s far more to e-commerce than Visa and MasterCard, especially for brands with aspirations beyond clients in their home countries.
The popularity of digital payment options, especially now that Apple and Google are on board, is a significant but potentially thorny development for businesses. Accepting them is a great way to get tech-happy people on board but they can be awkward to set up – and the rewards may not materialize if a brand’s customers prefer the more traditional plastic.
In brief though, companies aiming at a global audience ought to be thinking about things like PayPal, Skrill, Neteller and even Bitcoin.
Digital Wallets
The casino industry provides a useful case study as far as deposit methods are concerned, especially the online and mobile arm of the sector, iGaming. Casino is versatile by necessity; online gaming is a constantly shifting landscape, with constantly renewed slot machines and games with live dealers arising just to help brands stay relevant in the face of so much competition.
For example, bgo’s casino game options, which include video poker, roulette and slot games, allow for nine different payment processors, including three digital wallets with PayPal, Skrill and Neteller. The latter, while about as niche as providers get, is nevertheless significant as it allows users to pay with Bitcoin, a type of cryptocurrency.
While bgo is one of the larger brands, support for unusual payment methods isn’t particularly rare in casino. Magical Vegas, a provider of card games and slot machines, lists PayPal and Neteller among its digital wallet options. Pink Casino stands out as slightly odd then in only supporting Visa and MasterCard. The latter brand is still somewhat novel in being a female-orientated casino, however.
Unavoidable Options
Digital payment methods have been around for a long time – PayPal, founded in 1998, is synonymous with online payments – but it’s probably fair to say that Elon Musk’s internet service didn’t have much in the way of competition until the rise of mobile wallets, Apple Pay and Android Pay, in 2015.
Skrill and Neteller have existed for almost as long as PayPal (launched in 2001 and 1999, respectively). Their revenue and users are an order of magnitude lower than PayPal’s though. For example, Neteller raked in $89.6 million in 2014 while PayPal turned over $8.06 billion. The subtleties between the three, and both Apple and Google’s alternatives, mean that it can be prudent to offer all of them to customers, depending on the size and focus of a business.
The salient question is why? What do companies gain from offering so many different options for deposits and withdrawals?
Fig: “Breakfast @ Bill’s” (CC BY 2.0) by still.epsilon
Developing Markets
The obvious point is convenience and security – with PayPal, customers don’t have to surrender their card details to tens of different companies. It can be a life-saver for consumers; after all, their information is only as secure as the brand with the weakest security credentials. For companies, the risk of fraud is mitigated by PayPal’s Seller Protection Policy.
Neteller is where things get interesting though. As mentioned, the processor allows people to pay in Bitcoin. The cryptocurrency has noted benefits for customers in developing markets, chiefly by allowing them to circumvent punitive interest rates, cross-border payments, credit card charges, and similar transaction fees.
With the above in mind, support for highly niche payment options like cryptocurrency can be a “soft” way of opening up trade in Asian, South American and African markets. As far as business strategies go, it’s not without precedent; Valve’s digital distribution platform, Steam, partnered with payment processor BitPay, earlier this year to improve their offering in places like Brazil and India.
Finally, businesses can’t reach any MasterCard customers (for example) if they don’t support the option. It’s perhaps worth looking at how large an audience each payment method commands in each country before deciding on which ones to offer your clientele. However, note that even market-specific methods like JCB (Asia) have customers in the United States.
Author: This article has been written by Charlotte Blairman.
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