- Apr 10, 2023
The power of payments: How payments can transform iGaming player retention strategies
Reducing player churn and maximising customer lifetime values are essential for an online sportsbook’s long-term success. Against this backdrop, Zak Cutler, Paysafe’s President of Global Gaming, explores the fundamental importance of payments in a robust player retention strategy.
Most online sportsbooks put a lot of focus on customer acquisition, often gearing the majority of their marketing activities around driving new customer sign-ups. Advertising campaigns, sponsorships, brand ambassadors and bonuses all attract the big marketing bucks as brands battle for the lion’s share of the market. But, to ensure long-term success, online sportsbooks must balance player acquisition with retention strategies to ensure that the customers they acquire remain engaged and loyal to the brand.
The competitive nature of the iGaming industry often leads to high customer churn, as players are enticed by attractive bonuses offered by competing sportsbook brands, so efforts to keep players are key. But retention strategies shouldn’t only include bonuses. They should be comprehensive and cover all aspects of the online sports betting experience.
A key area is payments, the potential impact of which is often underestimated by operators when it comes to both player acquisition and retention. If players are not satisfied with the payment experience, they receive when they’re making transactions, they will likely not make a deposit and may even stop wagering with a brand altogether.
The good news is that, according to our latest All the ways players pay report, six out of ten sports bettors surveyed in the US, UK, and Canada’s Ontario in Q4 2022, were satisfied with the payment experience they receive. Just 14% of players were firmly dissatisfied, but given the highly competitive nature of the online gambling sector there is no room for complacency, and only a quarter (26%) are strongly satisfied with their payments experience.
What factors do players consider when making deposits and withdrawals?
So, what are the steps that online sportsbook operators need to take to ensure they provide a payment journey that meets the expectations of both existing and new customers?
Speed of deposits and withdrawals came out top as the most important factor for players when choosing which brand to place a bet with. Over a third (36%) of online sports bettors think about the speed of a transaction when making a deposit, closely followed by security (35%) and then the ease of actually making the deposit or withdrawal (32%). This tells us that operators must guarantee that payments are secure, swift, and reliable to ensure players have full confidence in the transaction process.
Furthermore, the importance of fast payouts should not be ignored, as it is essential for operators to ensure that their payout processes are efficient and meet the expectations of their players, as it appears that current player expectations are not being met. When it comes to withdrawals, four out of ten global players say they should be instant or near instant. 14% expect to wait half a day and 21% no longer than one day. All-in-all, 73% of online sports bettors expect same-day payouts, but in many instances, this timescale is not being met.
What constitutes a negative payment experience?
Slow payouts can be a major contributor to a player’s dissatisfaction with an online sportsbook, but that’s not the only factor that will drive down player satisfaction levels and result in them leaving a brand to bet elsewhere. According to our recent All the ways players pay research, the main reasons why a player would decide not to go ahead with a deposit were (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%
A poor payment experience can have a lasting impact on a sportsbook’s brand. This is evidenced by the fact that three-quarters of global players agree that the payment experience they receive is an important factor in their decision to continue to wager with a specific online sportsbook, and seven out of ten saying they were unlikely to return if the payment journey is not a smooth and seamless one.
How can brands deliver the payments experience players are looking for?
To ensure that players receive the transaction experiences that they expect, and to ensure they keep wagering with a sportsbook, operators should offer a diverse payments stack. This means providing customers with a variety of payment options, including both 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 online cash, or eCash.
The broad popularity of these APMs is likely thanks to their ability to offer players fast and secure transactions. For example, with the Skrill and NETELLER digital wallets, a player’s financial details are never shared with the sportsbook. Payouts are also instant. This is, in part, the reason why digital wallet usage across global iGaming markets is growing. Nearly one-third of players surveyed across the US, UK and Canada already use them to deposit and withdraw at online sportsbooks, according to our research.
In summary, payments are the lifeblood of sportsbook brands, as they enable operators to acquire new customers, complete the onboarding process and ensure players make their first deposit as well as continue to wager for the long term. It’s for this reason that a player’s payment journey should be considered a priority for any sportsbook brand, especially if they want to attract and retain customers at scale.