- Mar 07, 2023
Why digital wallets are critical for the growth of online sportsbooks
Paysafe’s latest iGaming study with sports bettors in North America and the UK found that four out of ten players consider quick and easy payouts as the most important factor when deciding where to play. And digital wallets offer the best experience when it comes to payouts.
For online sportsbook operators, player acquisition is one of the main business goals, and large budgets are allocated to marketing campaigns. There’s often a splurge of money on advertising, influencer partnerships and similar initiatives.
Frequently, the ROI is hard to prove, and many operators are faced with the prospect of cuts to their marketing budget due to the pressure of keeping up a healthy sales funnel.
The regulated sports betting markets include the US, the UK and the expanded Canadian market of Ontario - launched last April, so there’s definitely a large addressable market with sports fans and major events such as the Super Bowl, the NFL season and March Madness.
Paysafe’s latest ‘All the ways players pay’ research report surveyed online sports bettors in North America and the UK in November 2022, and found that four out of ten players consider quick and easy payouts as the most important factor when deciding where to play, which puts payments ahead of a brand they trust (34%) and good odds and attractive promotional offers (both 28%).
The ability to transact with their preferred payment method was the main factor that one-third of players in North America and the UK would consider when choosing a sportsbook. And 11% said it’d be because a brand sponsored a sports team or had a sponsorship in the sports space.
This reinforces the importance of offering players’ preferred payment methods for operators looking to acquire new customers. Traditional payment options, such as debit cards and credit cards, may dominate (in the markets or states where they are permitted), but there is a significant demand for alternative payment methods (APMs), with players only signing up to the brands that offer them.
Growth in digital wallet usage
Our research also found that almost three out of ten (28%) global online sports bettors now prefer to play using digital wallets. That preference shows up especially high in the US, with a third (32%) preferring a wallet.
Digital wallets overall offer a premium user experience for players, including being able to make instant, safe and secure deposits, without the requirement to share financial information with the operator. The security of digital wallets was critical to UK and Ontarian players with 49% of British players and 47% of Ontarians saying this was why they prefer to use them over other payment methods.
For one-third of global players, digital wallets are preferred because they provide the fastest withdrawals. This proves how important it is for sportsbook operators to ensure their payments offering includes both traditional and alternative payment methods, such as digital wallets like Skrill and NETELLER.
A lack of payment choices can mean loss of customers, given almost half (46%) of surveyed players said that their preferred payment method not being available would stop them from proceeding with a deposit at an online sportsbook.
VIP players and digital wallets
Paysafe’s study found that 41% of global players that bet five to seven times per week prefer to use a digital wallet compared to one-fifth (19%) of those that wager less than once per month. This clearly demonstrates the importance of offering digital wallets for sportsbooks looking to increase their exposure to high-volume, high-value players.
The frictionless customer experience offered by digital wallets is appreciated by these customers, especially quick and easy payouts, fast deposits and transaction security. VIP players have a special preference for not sharing financial information with the sportsbook operator and digital wallets give them just that, besides the ability to rapidly move funds across multiple sportsbooks.
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 the study.
This explains 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 losing high-value players.
As we look at the global landscape, the demand for digital wallets will likely continue to increase and sportsbooks have an opportunity to boost their acquiring strategy. Players should be given the experience they are looking for and broader payment options are a key component of that offering.