Frictionless Payment Experiences And Your Players
Best practice for online gaming transactions – deposits and pay outs – has always been to streamline the payment experience so it has as few friction points as possible. Extensive form filling, long streams of payment card data, authentication checks, can all result in aborted transactions; especially on mobile devices.
Choice and convenience is also very important, especially for building loyalty with players. Choice in the number of options they have to make a deposit or purchase tokens, on any device and with multiple payment options so they can choose their preferred method. Convenience in the form of a fast and intuitive payment journey, that minimizes the number of steps required to make an online deposit or receive a pay out.
Tools and payment solutions such as automatic form filling, alternative payment methods, one click, guest logins, tokenization and positive profiling, have all helped to create a more streamlined and friction free payment experience.
Operators who deploy these and other solutions see a positive impact on conversion rates. But what about further down the line?
Some experts in the payment sphere suggest that a frictionless payment journey can have a negative impact in the form of chargebacks.
Frictionless Gaming Deposits And Chargebacks
James McDonald, Barclaycard’s Head of Strategic Initiatives and Innovation, says in an article on the future of payments: “As things become more frictionless, it’s going to be very easy for people to consume and spend.” As a result consumers may not really register that they have initiated a transaction, and may be surprised when their credit card statement records activity. James says:
“You’ll have less friction at the point of interaction, but more responsibility to inform consumers how they are spending.”
Chargebacks are a challenge for all merchants, especially those that are not selling tangible goods such as gaming operators. Whether it is a deposit or payment for online tokens, there is a risk of chargebacks.
Typically we think of chargebacks as being a result of fraudulent behavior. However, that’s not always the case. Players can forget that a purchase was made especially if they have nothing tangible to show for it, and a frictionless payment journey could be partly responsible.
The legitimacy of a chargeback – whether it is the player’s error or not – is immaterial. Chargebacks rates have a negative impact on your business, costing in administrative fees and, if the chargeback is upheld, refund costs. High chargeback rates can also limit your ability to take online payments if merchant services are withdrawn. A significant problem for gaming operators who are already in a high risk sector.
Your PSP should also be able to advise your business on best practices and solutions that can help reduce chargeback rates. Fraud prevention tools will help protect your business from fraudulent chargebacks, and there are other solutions that can protect from player mistakes. But ultimately it’s your responsibility to protect your business and ensure that a frictionless payment experience isn’t impacting adversely on your bottom line.
Of course no gaming operator wants to add more layers to the payment process to ensure players are sure they want to proceed with a transaction. However, there are opportunities to reduce chargeback rates that don’t affect the payment experience. We recommend the following:
Merchant descriptor – the business / organization name that appears on credit card or bank statements should not sound alarm bells with players. However, if a group or legal name is used instead of the brand name used on the gaming site, players may think that the transaction is fraudulent and initiate a chargeback. If the brand name cannot be used, alternatively use the website URL as the credit card descriptor.
Alternative payment methods – chargebacks are a feature of credit card payments. Therefore encouraging players to use alternative payment methods (APMs) can have a positive impact on chargeback rates. E-wallet solutions and some other APMs* do not allow users to initiate a chargeback and can also increase deposit acceptance rates (compared to payment cards and bank transfers).
Improve customer / player support – chargebacks are often viewed as a faceless, victimless crime, and gaming operators are particularly susceptible as they are often fairly anonymous brands. By improving the support offered to players, and also using social media and digital marketing to appear less ‘faceless’, gaming brands can build loyalty with players and reduce opportunistic chargebacks.
A frictionless payment experience is still the goal for operators and PSPs, but once you have got a deposit you need to hang on to it – or at least until a pay out is due. The suggestions above can help reduce chargebacks and have the potential to build relationships, trust and loyalty with players.
To discuss further ways to optimize your online transactions for a better player experience, security and protect your business from chargebacks; please get in touch with our team.
* not all APMs are ‘chargeback free’. APMs that are linked to credit cards like Paypal do not protect online operators from chargebacks.