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Akshay Chopra, Head of Innovation and Design at Visa CEMEA

May 2023


4 - 5 Minutes

Powering Up: Payments and Gaming

Gamers want to enjoy their favorite activity without the hassle of complicated payment processes, while publishers and distributors need to efficiently manage transactions and ensure security. A dynamic and integrated payment system can help power up the ecosystem and make it easy for everyone involved.

The gaming industry is expanding rapidly, with gamers emerging as an essential consumer group in the market. The banking sector and financial institutions have a huge opportunity to provide a dynamic payment gaming ecosystem, as the popularity of free-to-play (freemium) models and in-game purchases continue to skyrocket among gamers.
Microtransactions or small transactions are the main source of income for this sector. Players make these by purchasing virtual goods or in-game items to enrich their gameplay experience. The industry has adopted this revenue model widely. While this "game-as-a-service" model may seem profitable, it poses a significant security threat. Gamers who make in-app purchases of digital items are vulnerable to fraud and hacking, making it a risky endeavor.

The diversity of the gaming industry
The gaming sector thrives on the active participation of four key stakeholders: gamers, game developers, publishers, and distributors. It boasts a diverse range of stakeholders, with players spanning across the hyper-casual, casual, midcore, and hardcore segments.
As of now, the number of people who have played games worldwide continues to grow and has already reached 3.24 billion. The majority of gamers come from Asia, which accounts for 1.48 billion players1. Currently, the majority (60%) of gamers in the United States are 34 years old or younger, while the percentage of female gamers stands at 48%2. Additionally, the United Arab Emirates has the highest population of adult gamers in 20223.

Complexities in the ecosystem
The gaming payments ecosystem is complex. There are multiple parties and many payment flows, including B2B, C2B, and the recent play-to-earn gaming trend. And what’s more, there is potential for B2C and C2C models to emerge, further adding to the intricacy of the gaming industry.
Within this matrix, gaming companies wrestle with managing payment related pain points that affect their bottom line, like loyalty management, subscription management, in-game content trading and checkout UX.
Gamers also face frustrations and may have avoided purchasing games in the past due to a variety of difficulties. These include payment methods that were repeatedly declined (47%), unexpected fees (44%), lack of trust in the website (39%), difficulty with foreign currency (29%), and concerns about transaction security (21%)4.

A fully integrated and seamless payment
To tackle the challenges faced by gamers, publishers, and distributors, a dynamic and integrated digital transaction experience is essential. To stay ahead of the game, it's important to constantly update payment technologies.
Adopting newer and better payment technologies can help avoid the risk of transaction rejection. Localization is crucial, gamers should be able to pay using their local currency and favorite payment methods. It's important to enable multiple gateways for unique payment methods and fee structures. Adopting token schemes and leveraging data granularity can also help maintain competitiveness. Finally, publishers and distributors can utilize game content trading and streamline the checkout process for a seamless and secure user experience that is both fast and frictionless.

Ways to improve payment and user experience
To be engaging in this experience, the industry can dynamically explore various payment models. By implementing loyalty management, stakeholders have the opportunity to actively engage with the gaming community and offer personalized rewards based on individual behavior. This approach adds new value to the gaming experience for all involved and helps increase the number of new gamers, boosts transactions per gamer, and enhances transaction value.
Distributors can optimize their user experience and revenue by leveraging authorization and fraud management. This can be achieved by reviewing and updating existing authorization policies, as well as integrating monitoring tools to increase authorization rates and minimize fraud. If done correctly, the number of false positives and compromised transactions will drop while legitimate transactions increase with higher average transaction values.

Simplifying payments for B2B can be made easier by publishers and developers through seamless payment flows. It can help reduce the costs associated with setting up payment infrastructure, processing payments, and managing upstream B2B transactions and revenues.

Developers, acquirers, and payment networks now have the opportunity to leverage the power of crypto in e-gaming. This can be achieved by facilitating effortless crypto transactions across all gaming platforms.
Visa is constantly collaborating with diverse industries and clients to grasp new opportunities and devise effective strategies for implementation. In this case, publishers or distributors have the option to collaborate with retail banks for co-marketing campaigns that highlight enticing deals. Financial institutions also have the opportunity to boost engagement and foster customer loyalty by leveraging the gaming platform to create unique banking IP assets, which can ultimately lead to increased card usage and a stronger preference for the bank. Another effective strategy is to launch co-branded marketing campaigns with retail banks and game companies that can help to encourage in-game transactions and eventually boost gamer engagement.

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All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.

1- Number of video gamers worldwide in 2021, by region, October 2022:
2- Video gaming in the United States, 2021:
3- Where Video Games Are Popular Among Adults, June 2022:
4- Visa-commissioned survey

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