Why Payments are a Game Changer for Retention – By Zak Cutler, President of Global Gaming, Paysafe
Acquisition is often the primary focus for online sportsbooks, with the majority of operators’ marketing activity geared towards driving new customer sign-ups. Big money is spent on advertising campaigns, sponsorship deals, brand ambassadors and bonuses, as brands do battle for the greatest share of the market. But retention is just as important, if not more so.
This is an industry where customer churn remains high, with players sometimes tempted to jump between brands by a generous bonus. Of course, effective retention goes beyond bonuses and covers all aspects of the online sports betting experience.
One of the most important areas is payments and the impact this has on retention is often underestimated by operators. If players do not receive the transactional experience they are seeking, they will put the brakes on making a deposit and potentially stop wagering with a brand.
The good news is that, according to our latest All the ways players pay report, which surveyed players in the US, UK, and Canada’s Ontario in Q4 2022, six out of ten sports-bettors are satisfied with the payment experience they are receiving. Furthermore, just 14% of players are firmly dissatisfied. But there is no room for complacency in such a highly competitive sector, with only a quarter (26%) strongly satisfied with their payments experience.
What do players look for when depositing and withdrawing?
So, what must sportsbook operators do to ensure they offer the payment journey that players are satisfied with – in terms of both retaining existing customers plus welcoming new bettors to their brand for the first time?
The speed of deposits and withdrawals is the most important factor for players. Over a third (36%) of online sports bettors think about transactional speed when making a deposit, closely followed by the security of the transaction (35%) and then the ease of making the deposit or withdrawal (32%). This means that operators must ensure they can deliver fast and seamless payments, but with high levels of security so that players have complete confidence in the transaction.
The importance of fast payouts should not be ignored, either. Operators need to streamline and improve the speed of payouts as it appears that current player expectations are not being met. Four out of ten global players saying that withdrawals should be instant or near instant, while 14% expect to wait half a day and 21% no longer than one day. Overall, 73% of online sports bettors expect same-day payouts. In most instances, this timescale is not being met.
What makes for a bad payment experience?
Slow payouts form part of what players consider to be a bad payment experience, but that’s not the only factor that will push satisfaction levels down and ultimately prevent players from topping up their wagering accounts and staying with a book. According to our recent All the ways players pay research, these are the factors that would stop them from proceeding with a deposit (players were able to select up to three):
- Concerns about the security of the transaction – 51%
- Their preferred payment method not being available – 46%
- Being required to provide too much financial information – 46%
- Their deposit being declined – 37%
- A limit placed on the deposit – 30%
The impact of a bad experience was made abundantly clear, with three-quarters of global players agreeing that the payment experience they receive is an important factor in their decision to continue to wager with a specific online sportsbook. It really can wreak lasting damage to a sportsbook brand, with seven out of ten players saying they were unlikely to return to a book if the payment journey is not smooth and seamless.
How to deliver the payment experience players are seeking
To provide the payment journey that players expect, and to ultimately ensure they keep wagering with a sportsbook, operators must have a diverse payment stack. This means offering traditional payment methods such as debit cards and, in the markets where they are permitted, credit cards, as well as alternative payment methods (APMs) like digital wallets and even online cash or eCash.
This is because these alternative payment methods tend to provide what players are looking for – rapid transactions and high levels of security. For example, with the likes of the Skrill and NETELLER digital wallets, the player’s financial details are never shared with the sportsbook. This is why digital wallet usage is very robust across global iGaming markets, with almost a third of players using them to deposit and withdraw at online sportsbooks across the US, UK and Canadian markets we surveyed.
Acquisition will always be a focus for sportsbook brands but given the high cost of driving players to their books, it’s vital that, first, they ensure they complete the onboarding process and make a deposit and, second, once they have made their first bet, they continue to wager for the long term. Payments allow operators to do both at scale, and that’s why they should be considered an absolute priority.
Author: Zak Cutler, President Global Gaming, Paysafe
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.