'Nowadays, buyers are much more demanding and selective when it comes to the way they spend their money online.'
Payment trends in the video games industry are closely related to the overall ecommerce trends. When making an in-game purchase, players often choose the same payment method that they use while shopping for other products and services online.
Over the last few years, the payment industry has seen a significant evolution in technology and changes in consumer payment habits. COVID-19 has accelerated this change. Customers are now much more demanding and selective when it comes to the way they spend their money online.
Players tend to choose faster and more convenient payment methods, like mobile wallets or methods that allow customers to use a saved payment account. In the meantime, customers are only willing to save their payment credentials if they trust the website and the payment provider hey use to make purchases.
Another thing we need to consider is the local payment habits. While many players use credit cards to make payments in games, other customers prefer local digital wallets, like WeChat and Alipay in China, Paytm in India, or TOSS in South Korea, prepaid cards, or even cash.
Before we decide to enter a new market, we first need to do our homework. We look into how many game developers are in this market, if they sell their games locally or globally, and dive deeper into the cultural payment habits of the particular country or region. For instance, in Africa, each country is unique in terms of payment habits, while in Latin America we see a lot of similarities when it comes to how people pay for games.
As for localisations, the key factor is whether customers expect to see the checkout interface in English or in their local language. Localised interfaces can lead to a higher conversion rate. Our conversion rate in Brazil almost doubled when we localised all the interfaces in Portuguese, launched local payment methods, and enabled payments in local currency. For some countries, like Japan, for example, localisation can be a regulatory requirement.
Moreover, localised interfaces can still be confusing to users, so it’s recommended to have a local advisor or a trusted partner in every new market.
Almost every region has challenges of its own. The most common ones are connected with region-specific rules and regulations: localisation in Japan, age gating in South Korea, cross-border payouts in India, high exchange rate volatility in Latin America, regulations imposed on online game sales in Vietnam, and more. Our job is to work through all these things so that game developers can sell their games in every country across the globe.
Before adding a new payment method, we do our research. We determine if this particular payment method is relevant to this particular country, and if its payment flow is similar to how people tend to pay. If most payment methods in the country require only one click to make a purchase, then a newly launched payment method with a longer payment flow will most likely ruin the game’s conversion rate in this territory. Also, we regularly monitor changes in user behaviour and payment habits.
Brazil, for instance, had a cash-based economy for a long time. In 2020, the Central Bank of Brazil launched Pix - an instant payment system available to the general public 24 hours a day, 365 days a year. At least 100 million people have already transacted with Pix within one year from the launch. Shortly after the launch, we added Pix to Xsolla’s portfolio of payment methods. Since then, we noticed that the share of cash payments in Brazil decreased by 23% because local users quickly adapted to the more convenient payment flow.
Our mission is to make in-game payments a part of a game session. Customers nowadays migrate between different platforms and demand a seamless payment experience on any device, whether it is a PC, a tablet, or a smartphone. We made our latest Pay Station product version smart, customisable, and compatible with multiple platforms and devices to let developers extend their branded checkout experience across platforms for their users, no matter their preferred payment device or method.
Making a payment no longer pulls you out of your game session, which is important for the business outcomes. We have tested the new Pay Station at scale, and the metrics are: increased conversion rate due to fewer transaction interruption factors, and increased average revenue per user from in-game item sales leading to increased customers’ lifetime value. A bigger revenue stream, a more successful game.
This interview was first published in Payment Methods Report 2022, the most updated overview of trends and developments in the payment methods space and the innovative technologies that these methods work upon, emerging consumers habits, and strategies on how to win at conversion and retention.
Elena Popova is an expert in global payments with 9+ years of work experience with AAA gaming titles. Elena helps video game companies of all sizes distribute their games and grow their revenues via multiple payment channels from global names like PayPal and Visa to local schemes like Pix in Brazil and Paytm in India.
Xsolla is a global video game commerce company with a powerful set of tools and services designed for the video games industry. As a leader in video game commerce, Xsolla solves the complexities of global distribution, marketing, funding and monetisation for games across mobile, PC and the web.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now