11 2018 | BUSINESS
»paysafecard will be a valuable asset for operators in the US«
paysafecard CEO Udo Müller tells PIN, why offering online cash will become very important for Sports betting operators and why gamers are a promising young target group in the US.
Sports betting seems to become a very interesting market in the US. What’s the paysafecard perspective on the recent liberalization?
I think that the online sports betting market will grow to be very significant in a few years time and that paysafecard in particular is a perfect fit for this sector. We have a great deal of experience with sports betting in Europe and through that, we have found that it is absolutely decisive that the users have different options to pay money in and receive their winnings. Paysafe as a group is therefore the ideal partner, because we have so many different payment methods in our portfolio. I’m convinced that paysafecard especially will become a valuable asset for operators, because it is based on cash and it already has been available in the US for several years for games and other online entertainment services. So with respect to regulatory questions, we have been able to develop a competitive edge in terms of expertise in the most varied American markets.
Why do you think offering online cash is so important?
On the one hand, because many households even in the US don’t have adequate access to a bank account and credit card. And on the other hand, because Americans continue to love cash. This is, for example, shown by a recent study from the Federal Reserve Banks of Atlanta, Boston, Richmond and San Francisco. This reports that American consumers pay by cash in around a third of all cases. Debit cards (26%) and credit cards (21%) are less frequently used. For 10% of payments, even cheques are still used. It is striking here that cash is mostly used for smaller amounts, while cards and cheques are used more for larger purchases. According to the San Francisco Fed, the amount of money in circulation is even consequently increasing by more than 7% per year.
So cash as a payment method is still relevant?
Absolutely. But it’s not so much about one way to pay or the other. It’s about greater variety. We therefore want to offer merchants several payment methods at once with a single application, including many that are based on cash and which did not previously exist in the USA. In addition to the classic paysafecard, there is the new Paysafecash product, for example, which will be launched in the near future. Users can pay for products online using the new application, have a barcode printed out, sent to a mobile phone or uploaded to a wallet, and then use it pay in cash at a Point of Sale.
»We have found that it is absolutely decisive that users have different options to pay and receive money.«
Udo Müller, CEO paysafecard
Do you think merchants are looking for such payment methods?
Our current “Lost in Transaction” study has shown that especially the smaller and medium-sized online traders are very aware that a greater variety of payment methods leads to greater revenue. Over 80% want to introduce new payment methods in the next two years. The increases in prepaid (+14%), online cash replacement systems (+15%) and instalment payment (+12%) are particularly interesting from our viewpoint.
paysafecard is also a well-established brand among young gamers. How do you see the future of this market in the US?
Well, the eSports market is almost as enormous as the country. I think with its almost 22 million eSports enthusiasts the US is the second-largest eSports country after China. The development of revenues shows the same trend, according to Newzoo research. In 2018, they reached 30.4 billion dollars. By 2021, the Newzoo study predicts that they will grow to 37.8 billion dollars, while the share of mobile games compared with the PC and consoles is steadily rising. Numbers like these reinforce our determination to invest in marketing. This is reflected, for instance, in our part in the ESL One in New York, where 6,500 gamers celebrated their sport in the Barclays Center. In addition, our team visited the IEM in Chicago, one of the most important CS:GO tournaments with a prize of US$ 250,000.
Can you give us some examples for these marketing activities?
paysafecard plays a very active part in the program of these events. The company sponsors an eSports Hall of Fame, which in New York welcomed the Counterstrike legend Ola “elemeNt” Moum, for example. We are happy to contribute in this way, so that the greats of eSports are now properly honoured, as they would be in other types of sport. Our team also regularly organises an Ultimate Experience for selected gamers, with free flights, accommodation and backstage passes at selected events, and with G2 Esports sponsors one of the best teams in the world. In cooperation with G2 Esports, there is also a special event now running in the United States: as part of the casting show “Making the Squad,” 20 participants after a pre-selection competefor the final four places in a professional G2 Esports Fortnite Streaming Squad.
That’s a lot of activity. Do you think the eSports community is a promising target group for paysafecard?
eSports enthusiasts fit perfectly with the “prepaid” payment model. Many of the young gamers have neither a credit card nor a bank account, but with the help of paysafecard they can pay for in-game purchases and more. In addition, they become familiar in this way with a particularly secure payment method, which they can continue to use later in life. For betting on a game of their favorite sports team, for example.