Online gaming merchants are keeping those stuck within the confines of their homes entertained as lockdowns are extended across the globe. In the space of a month online gaming platforms have experienced record growth. This is particularly the case for countries with strict quarantine measures.
India had a lockdown in place for over a month. A leading provider there, Patym First Games, reported a 200 percent increase in its user base in just one month. They are just one of many online merchants that have seen their membership and revenues soar.
Not only does this time present an opportunity for esports companies though. Online sports betting, video games, casinos, skill games, and other types of gaming merchants have been hurt by the worldwide decision to hit “pause” on sports. But the move to online and virtual reality sports games by millions of consumers is presenting opportunities for merchants in the industry. So don’t despair, learn how to pivot during this crisis instead.
Services of online gaming merchants explodes
As mentioned, the demand for online gaming has recently exploded alongside other forms of home entertainment. Those stuck at home are increasingly looking to the internet to provide some form of light relief. Unfortunately, not all gaming merchants are benefiting from the crisis, specifically fantasy sports merchants. (We will discuss this in detail further on in this blog.)
NBA, NHL, tennis, Formula 1, baseball, horse racing, golf, rugby, soccer, and even the Olympics have all been cancelled or postponed. This has left many fans with a huge hole in their lives. As a result, they have turned to games like FIFA to satisfy their hunger for sport. Esports and other gaming providers have been scrambling to catch up. One of the world’s biggest, Xbox Live, went down for a period as it buckled under the demand.
Many are also struggling to process payments with monthly volumes well in excess of agreed sales limits. Many leading providers have switched to subscription models over the years to stabilize demand. But in-game purchases are still causing issues due to the sheer volume heading to the checkout. So what can you do if you’re an online gaming platform looking to build from the home entertainment boom?
Diversify payment methods to reduce risk attached to increased sales
It’s tempting for online gaming merchants to turn to easy-to-setup payment aggregators such as Stripe. After all, it’s a fast and inexpensive way to get started. But this would be a fatal mistake. As transaction volumes increase, chargebacks will increase from customers who’ve had a bad experience or who are looking to play for free.
When this happens you could have your funds frozen or withdrawn, and have your account terminated. Worse, that information could be shared with card issuers, leaving you possibly TMF’d or MATCH-listed. The solution is to find optimal payment processing options to ensure your high-risk business doesn’t encounter bottlenecks.
Look at securing a merchant account. They give you access to your own credit card processing, as opposed to relying on a third-party platform. What’s more, acquirers for high-risk merchants understand how to manage risk and how to provide the best technology to support your business. Particularly during periods of extremely high demand. It’s also an excellent idea to explore offshore merchant accounts if you attract players all over the world. For example, an account with an acquirer in the EU can unlock payment processing for multiple countries and currencies if secured in the same region.
Next, look at multiple payment methods so that you’re not overly exposed to the threat of chargebacks via credit cards. ACH payments, and MOTO payments taken via a domestic call center will help to drive up sales capacity without simultaneously driving up the risks of fraud.
But what about those in the sports betting industries that have been hit hard? What can be done to cater to changing consumer habits?
Sports betting merchants hit hard by Coronavirus can pivot toward success
Lockdowns and national quarantines have been providing a boom in demand for online sports and gaming services. But, some fantasy sports and sports betting enthusiasts aren’t as equally excited. Some merchants in these categories have seen interest tank. Betting firms such as William Hill and many others are beginning to tally up the losses associated with the cessation of sporting activities.
However, they, along with their counterparts are actually in an advantageous position to pivot their offering. What they lack in sports activity, they make up for in their streaming and virtual capabilities.
Some acquiring banks accept skill gaming merchants. Try moving from betting on sports and events to sports-related skill games for jackpot prizes. This allows merchants to cater to the same audience without an extreme shift in business operations.
Of course, with all of these opportunities, it’s important to manage risk so chargeback and refund fees do not eat away at your revenue. Worse, a terminated account can leave gaming merchants scrambling for alternative solutions. ACH, offshore and diversifying domestic payment channels helps prevent loss of sales. Remember, with poor processing history, getting a new merchant account will be harder.