06 2021 | STORIES
eCash and the COVID-19 factor
During the COVID-19 pandemic, paysafecard and Paysafecash were able to demonstrate how important they are for merchants' payments mix. Because eCash gives you that feeling of security online that most people otherwise only experience with cash in times of crisis. Thanks to Paysafe´s eCash payment solutions, even consumers without a bank account or credit card were always able to pay online for entertainment and distraction from their everyday worries. The result: paysafecard and Paysafecash have gained lots of new customers who will continue to use this payment method in future.
Cash is THE crisis currency. This is true all over the world, also in Europe, where German and Austrian consumers in particular place great value on the advantages of notes and coins. A concrete example of this is Austria. People there are currently hoarding around 12 to 13 billion euros in cash. According to Eduard Schock, Director for Payments at Austria's central bank (OENB), that figure is 2.5 billion higher than before the crisis. When it began in March 2020, it was estimated that there was even four billion euros more in private circulation than normal. "In the week of the first lockdown, cash withdrawals were at two to four times the normal level," says Schock. "In this time period, more cash has been delivered that at any point since the euro was introduced in 2002."
Double-digit growth rates for eCash
Thanks to paysafecard and Paysafecash, consumers spent part of this money again online in the months that followed. "Over the last year, we have seen double-digit growth rates in transaction volumes, revenue and the number of transactions," says Walter Tauchner, SVP Partner Management at paysafecard. This is down to several factors: "Because the opportunities to spend money in physical shops and restaurants were limited, people were increasingly looking for opportunities to entertain themselves online. Additionally, our most important distribution partners, such as petrol stations, post offices, tobacconists, and grocery stores, remained open throughout. This allowed people to use cash online, despite the lockdown, for consumption and entertainment."
25 percent more new customers
In many countries, this resulted in an enormous growth in sales for merchants. Front runners were Germany, the UK, Ireland, and Romania, where many merchants were even able to triple their takings. This was also possible because the proportion of people using paysafecard for the first time in their lives to play games or shop online sky-rocketed.
"Many people were spending a lot of time at home and finding it hard to keep busy. Looking for entertainment online was therefore an obvious choice," says Tauchner: "paysafecard lowers the barrier for trying things out because eCash is one of the safest payment methods and gives people full cost control." In this way, merchants were able to win many new customers for paysafecard, also in these difficult times. The increase in transactions and takings is in part due to a 25% increase in first-time customers. "I am sure that this user group will use paysafecard or Paysafecash more often in future, because they have experienced the many benefits of eCash during the lockdowns."
Vertical games a big winner
The reason for this is that there has been an increased focus on shared entertainment online as a result of the lockdowns and the pandemic. "My nephew, for example, made an appointment on New Year's Eve for activity gaming using the "Discord" chat platform. For me, that is a definite sign that our experiences with COVID-19 have established a completely new type of consumer behaviour. This is also supported by the figures for paysafecard transactions from the big game providers. In some cases, they have risen again by 50% for some of the top providers.
"Vertical games were definitely among the biggest winners in terms of the number of transactions"
Walter Tauchner, SVP Partner Management, paysafecard
New business area: rents and utility bills
In addition to the paysafecard verticals, there is another area that has been changed by COVID-19. This is because the financial inclusion of people without a bank account or credit card is becoming an issue again as a result of the pandemic. This is shown by an example in the U.S. Rents there are still primarily settled in cash. In 2017, 82% of all renters were still paying with cash or a cheque. During the pandemic, this was almost impossible. On the one hand because many people lost their jobs, and on the other hand because social distancing made the handover and acknowledgement of rent near impossible. As a result, around 10 million Americans still have rent arrears of around USD 5,000 per household. This clearly shows how important a widely available eCash option like Paysafecash is to enable people without a bank account to pay rent, electricity, heating, and taxes online. "COVID-19 has brought about a lot of new considerations in all of our markets," says Walter Tauchner. "The public administration in Switzerland, for example, uses paper invoices with a QR code printed on them. By scanning the barcode using the Paysafecash app, this invoice can be paid in cash at all of our points of sale."
The example of Austria from the start shows that these new opportunities for merchants are also relevant in terms of transaction volume. Because the 12 billion euros in cash that Austrians are currently hoarding at home will flow back into the economic cycle once this pandemic is finally over.