Convenience, Choice and Speed: How Payments Have a Big Impact on Player Retention in the US
We spoke with Zak Cutler, President of Global Gaming at Paysafe, to hear his perspective on how payments can influence player retention.
Getting new players through the (virtual) doors with star-studded advertising campaigns and ‘too good to pass up’ promotions has been a primary focus of US online sportsbook and casino operators over the last year or so. Millions, and in some cases billions, of dollars have been invested in campaigns to acquire new players and retain existing ones in a spending spree the likes of which the industry has never seen before.
While this certainly isn’t wasted investment, and truth be told will always play a fundamental role in acquisition and retention, these activities are only one aspect of a broader customer conversion strategy.
Enticing players to spend with free bets and sign-up offers is one thing but retaining a customer over the longer term when the promotions end, is quite another. Only through a seamless and unrivalled player experience across the length and breadth of their book or casino can operators ensure they’re converting a high proportion of these players into long-term customers.
Although it may not have quite the same glitz and appeal, one of the most critical areas in the customer conversion and retention space is payments, and in particular fast payouts.
For the players
The importance of fast payouts in acquisition was highlighted in our most recent All the Ways Players Pay US gaming research report. In fact, they were the dominant factor for players when deciding where to play. Over a third (37%) prioritized fast payouts, pushing out brand reputation (32%), promotions (28%), competitive odds (27%) and sports markets offered (11%).
Getting payments right doesn’t just bring in new players, but it keeps them. Four fifths (79%) of American sports bettors said that if they have to wait longer than expected to receive funds after making a withdrawal it reflects badly on the online sportsbook.
We also found that the speed of withdrawals not only impacts how players select a sportsbook, but influences which brands players with multiple existing accounts use to place bets. Those that offer fast payouts are the betting brands players will wager with the most.
How fast is fast?
In order for operators to meet these demands, they need to know what exactly defines ‘a fast payout’. Our research indicates that more than two-thirds of players think it is reasonable to expect to receive their payout within 24 hours. A third (32%) argue payment should be instantaneous. This is particularly acute amongst high-frequency bettors, with 41% of this segment preferring instant payouts.
In short, if you’re an operator whose payout times exceed 24 hours, you’re not hitting the mark for the majority of players, particularly the highest value ones.
Convenience, choice and speed
Speed of payments is not the sole factor though, and a seamless payments journey also encompasses and is intertwined with offering players a wide range of options for both depositing and withdrawing funds.
This is more than just offering the expected card payments from the likes of Visa or Mastercard, but alternative payment methods (APMs) including digital wallets and online cash, or eCash.
Our research shows that APM adoption is picking up amongst certain high-value player groups in the US In fact, digital wallets are the most common payment method for high-frequency bettors and VIP players. This is in large part due to the need to move funds with fewer restrictions, and 84% consider this an important factor when betting. It also curtails the friction, inconvenience and cost associated with sending large wire transfers.
Looking specifically at eCash, which is the preferred deposit method for players who would rather bet with cash, this is mostly because these players may not have access to a credit card or even have a bank account. According to the Federal Reserve, over a fifth of American adults (22%) are unbanked or underbanked.
Clearly there are myriad benefits to providing the speed, choice and convenience that comes with a seamless payments journey. It is an important factor for acquisition and retention, but so too does it help operators meet the needs of their high-volume bettors and create stronger brand loyalty.
Bonusing and eye-catching advertising will likely continue to be the hallmarks of the US online gaming world and serve as a powerful tool for acquisition and retention. However, to overlook a seamless payments experience and its role in supporting these flashier initiatives will mean ceding some of those hard-earned players to competitors in the long run.
Zak Cutler is a regulated U.S. online gaming executive with a proven track record in strategy and corporate development. Before Paysafe, Zak worked at both Jackpocket, an innovative app enabling players to buy state lottery tickets online, and DraftKings, where he was responsible for all product initiatives related to payment processing, U.S. compliance, and international expansion.