A bettor logs on to a gaming site and tries to deposit funds for online play. The process should be as easy as ordering a book from Amazon or purchasing a ticket for a sporting event via StubHub.
But according to a recent survey conducted by Sapio Research for PayNearMe, 52% of bettors have had issues with declined payments when signing up for new igaming apps.
“It’s a huge issue and it ties into lowering customer-acquisition costs,” says PayNearMe General Manager of iGaming and Sports Betting Leighton Webb. “Operators spend a lot of money to acquire customers and they’re not converting them.”
Released today, the survey “Understanding the iGaming Payment Experience: What U.S. Bettors Want in the Deposit and Withdrawal Process” was conducted in February 2022. It polled 2,051 online bettors who placed online bets in the past year.
“A lot of the studies that we looked at in the past included a whole group of people who aren’t really active bettors,” says PayNearMe Director of Marketing Steve Murphy. “So we wanted to make sure that everyone who was included in this had placed a bet in the past year and that was across 19 states where some form of real-money online gaming is live and legal.”
PayNearMe is an electronic billing and payments platform based in Santa Clara, California.
The survey ranges from what’s most important to bettors when choosing platforms to why Venmo is a preferred method of payment for 25% of survey respondents between 18 and 34 years old.
One of the most important takeaways from the survey is that almost half (49%) of respondents stated that a positive payments experience is the most important element of placing bets online.
Webb says there are no differences between the security protocols deployed when a patron is signing up for Uber or online gaming. But when online-gaming transactions fail or are delayed, they’re perceived by bettors as more “acute,” according to Webb, for two reasons.
“One, more information is sometimes required or is required of the user to be able to transact,” Webb says, noting that issue “primarily happens in the KYC phase” when accounts are being set up.
But what’s more concerning to some bettors is that some of the gaming brands aren’t “household names,” Webb says. “They’re not Uber, right? They’re not as well known in the marketplace.”
Webb notes that there is a difference in the industry now and a few years ago when online gaming was launched. Early adopters of igaming were “more forgiving,” he says. “They were willing to go through those hurdles, willing to share information that the casual user is not. And as the market grows and starts to attract more casual players – and I would argue it’s the same in any industry; you can go back and look at countless examples where this is true – the behavior of an early adopter is different from that of the casual bettor.
“These areas continue to grow in importance for the operator as the market grows and starts to attract, let’s call it, that casual player.”
Murphy adds another difference. “Five years ago, UberEats wasn’t illegal.” But because online gaming is a relatively new experience, “casual bettors are just learning that this is a legal thing to do.”
Other results from the survey include:
- The most important deposit option for bettors is PayPal (64%).
- If bettors had access to their preferred withdrawal method, 49% would play more and withdraw funds more often.
- 17% or bettors experiencing payment issues when signing up for new applications leave and never come back.
That last bullet point should concern operators. Millions of dollars in revenue aren’t generated, because some bettors don’t want to deal with issues related to online betting.
Webb says that’s why several operators are reducing their marketing spend and concentrating on the conversion piece. “They’re leaving a lot of money on the table.”
To be successful, Webb believes operators first have to provide a preferred choice, such as Paypal, but also make available other options, such as online banking.
Next, signing up has to be “pixel perfect. You have to make sure that every step of the way, every click matters and you’re getting users through that flow.”
Finally, operators need to provide payment options, such as PayPal, that people trust.
“You have to think about it in those three areas,” Webb says.