Why Digital Wallets Hold the Key to Maximising Player Acquisition
Zak Cutler, President of Global Gaming at Paysafe, says the company’s new research reveals that players now expect to be able to deposit and withdraw using digital wallets
Online sportsbook operators often have major budgets when it comes to player acquisition, with many spending big on above-the-line marketing campaigns, signing superstar brand ambassadors and offering generous bonuses to tempt players to their brands over those of their rivals.
But you just have to look to markets such as the US to see that this open chequebook approach to customer acquisition has had questionable results. After what can only be described as a marketing blitz, the majority of operators are now being forced to cut back on spending.
This is because these tactics have not been as effective at driving customer acquisition as first thought, not just in the US but in other regulated markets such as the UK and the expanded Canadian market of Ontario, which launched last April. This is absolutely supported by the results from our latest All the ways players pay research report, which surveyed online sports bettors in North America and the UK in November last year.
The research found that four out of ten players consider quick and easy payouts as the most important factor when deciding where to play, putting payments ahead of a brand they trust (34%) and good odds and attractive promotional offers (both 28%).
Being able to transact with their preferred payment method was the most important factor for one-third of players in North America and the UK. And just 11% said it was because a brand sponsored a sports team or had a sponsorship in the sports space.
The availability of a player’s preferred payment method is especially important for operators looking to acquire new customers at scale. While traditional payment options such as debit cards and credit cards dominate (in the markets/states they are permitted), there is a significant demand for alternative payment methods with players only signing-up to the brands that offer them.
Digital wallet usage is robust
When it comes to alternative payments, our research found that almost three out of ten (28%) global online sports bettors now prefer to use digital wallets. That preference trends especially high in the US, with a third (32%) favouring a wallet – and this has actually increased slightly from the 25% of American players that said a digital wallet was their preferred method in our 2021 All the ways players pay report.
The main reason for the robust digital wallet usage is that they meet the key expectations players have when it comes to the payments experience they receive at a sportsbook. This includes being able to make instant deposits that are safe and secure, and that don’t require them to share financial information with the operator.
According to our research, the security of digital wallets was particularly important to UK and Ontarian players with almost half – 49% of British player and 47% of Ontarians – saying this was why they liked to use them over other payment methods. For one-third of global players, it’s because they provide the fastest withdrawals.
This means it’s crucial for sportsbook operators to ensure their payment stacks not only include traditional methods like credit and debit card payments, but also digital wallets such as our Skrill and NETELLER solutions.
If they don’t, players will simply walk past the digital doors of their sportsbook and walk through the doors of one of those that do. In fact, almost half (46%) of respondents to our report said that their preferred payment method not being available would stop them from proceeding with a deposit at an online sportsbook.
Digital wallets are vital for engaging VIP players
The importance of offering digital wallets is even greater for sportsbooks looking to increase their exposure to high-volume, high-value players, with 41% of global players that bet five to seven times per week preferring to use a digital wallet compared to one-fifth (19%) of those that wager less than once per month.
Again, this is because digital wallets provide the payment experience this small but significant player cohort expects including quick and easy payouts, fast deposits and transaction security. Just like more casual players, VIPs do not like to share financial information with the sportsbook operator and digital wallets allow them to deposit and withdraw without doing this.
But in contrast to more casual players, VIPs tend to have several sportsbook accounts. A player wagering once a month has only 1.6 sports-betting accounts, while those wagering 7+ times weekly have 3.1 accounts, according to our research. And a digital wallet allows players to rapidly move funds across multiple sportsbooks.
All these factors combined explain why the majority (60%) of the most frequent bettors (7+ bets per week) with a digital wallet will use it to deposit and withdraw with online sportsbooks. Operators without a wallet risk alienating these high-value players.
Globally, the demand for digital wallets will likely continue to increase and if sportsbooks do not include them in their payment stacks, they will not be able to acquire customers at the levels they target. Blockbuster ads can, and do, drive brand awareness. But ultimately users must receive the experience they are seeking once they arrive at the sportsbook if they are to be converted – and payments and digital wallets in particular are now crucial to this happening.