Game developers know that when more payment methods are available to players, the more likely it is that they’ll make purchases. This is especially true in parts of the world where players are either unbanked or underserved by widely accepted payment methods, including credit cards and PayPal.
Limited access to more popular payment methods forces players in some countries or regions to rely on alternative payment methods for gaming purchases. Instead of drawing on a pool of credit tied to the international finance system, alternative payment methods tend to rely on or be local financial institutions and currencies. Such payment methods can include local (domestic) cards, prepaid cards, bank transfers, mobile payments, and cash payments.
Xsolla Pay Station is already optimized to accept payments from many alternative payment methods throughout the world. So to better understand how payment methods like this can help you sell your game in certain key markets, let’s take a closer look at a few that you may not have heard of.
Originally created in 2007 as a microfinance loan repayment system, M-Pesa grew into the top mobile money app in the world and the top payment system in Kenya by far, according to the Economist. More than 17 million Kenyans exchange more than 25% of the country’s gross national product through it, and its user base has expanded to more than 21 million active users in at least 10 countries.
One of the major reasons for M-Pesa’s success is its low fees relative to other mobile payment methods within its service area. The company specifically targets the “so-called base of the pyramid,” enabling its users to make individual transfers of amounts as low as one shilling (approximately $0.01 USD). This focus on small-value transfers has helped M-Pesa users to connect with and support many local small businesses, as well as to lift some of the poorest citizens in the area out of poverty.
Other factors that have contributed to M-Pesa’s success include its functionality and convenience. M-Pesa works on the vast majority of mobile phones — even on the simplest modules — and that helps many users who do not have access to personal computers, tablets, or other smart devices to “send money home,” as is often the case.
For these reasons and more, M-Pesa is easily among the top alternative payment methods for gamers in its supported area to buy video games and in-game content. And in a world where people are increasingly making purchases on mobile devices, it’s even more important for developers to be able to rely on dependable mobile payment methods in and around Africa and other emerging markets for gaming.
In the late 1990s and early 2000s, machines called cash kiosks (or payment terminals) began cropping up across Russia as a way to buy airtime minutes for mobile phones using cash. As these devices grew in popularity, both their hardware and software were upgraded to the degree that citizens could pay for much more than just their phones.
Russian citizens were soon able to use cash kiosks to add money to e-wallets, perform money transfers, and make payments for basic needs like water and electricity. This trend was so impactful that it caused Russia’s economy to bend more toward a reliance on cash for everyday expenses. Eventually, other categories of payments became available as well, including internet service, entertainment subscriptions, and of course, video games — all of which were advertised to individuals while using a cash kiosk.
By 2011, these cask kiosks had become the most popular type of payment method for video games in Russia. And while this was convenient for players — or at least, what they’d become accustomed to — it posed a problem for developers looking to sell online games to players who don’t use credit cards.
But a solution quickly emerged, as Xsolla partnered with Valve to integrate Steam with 450,000 existing cash kiosks across the Commonwealth of Independent States (Russia and former Soviet republics). By pairing Russia’s leading gaming payments solution with the world’s largest social entertainment platform, Xsolla and Valve enabled millions of gamers to add Rubles to their Steam Wallets at cash kiosks to pay for video games and in-game content.
Nowadays, cash kiosks are still important and their underlying technology has paved the road for additional ways Russian gamers like to buy game content, including ATMs and banking applications.
According to a recent Newzoo report, Iran’s total gaming revenue for 2018 is projected to total $602M USD. The same report ranks Iran as 23rd on its overall market listing by revenue, verifying that the area represents a ripe opportunity for developers looking for fresh, untapped markets for gaming.
Since 1979, fluctuating US, UN, and other global sanctions on Iran have drastically restricted the flow of money in and out of the country through traditional payment methods like credit cards and PayPal. These sanctions isolated Iran’s economy in various ways, most notably by disconnecting it from the Society for Worldwide Interbank Financial Communications (SWIFT), which is ordinarily used to make cross-border payments and purchases.
This unique challenge forced Iranian banks to drastically revamp the availability of local debit cards and ATM services beginning in the 1990s. By 2002, one local payment system called Shetab began partnering with banks to build a nationally unified network through which all locally-issued bank, debit, and ATM cards could be processed at any of their terminals. It has since become the top payment method for almost anything in the nation, including video games.
Also known as the Interbank Information Transfer Network, Shetab has become an automated payments and banking clearance system that presently governs over 300 million debit cards. As Iranian citizens tend to carry an average of three to four debit cards each, it’s clear that Shetab holds a great deal of sway over the ways in which the country spends its money. Shetab has also long sought to reconnect Iran with the global financial system, but as political tensions are often unpredictable, there is no known timetable for when that might occur.
One of the biggest challenges for game developers and publishers is transforming non-paying players into paying players. As free-to-play (F2P) games continue to represent more of the global gaming market share, game creators are feeling increasingly compelled to either make F2P games or get left behind. And more often than not, turning a profit with an F2P title requires developers to work out creative monetization strategies — typically involving either paid ads or selling in-game content.
If a developer doesn’t want ads in their game, a different approach to getting F2P players to pay is through cryptocurrencies — blockchain-based currencies built using a shared ledger for all global transactions. Players can securely mine a number of cryptocurrencies and spend their earnings on games and in-game purchases through Xsolla Pay Station, including Bitcoin, Litecoin, MobileGo, and Ethereum. In this way, developers give non-paying users the opportunity to change their purchasing behavior and convert as paying players.
Because cryptocurrencies are decentralized, they can be used to make gaming purchases across borders between countries and regions. This is especially good news for developers who seek to market and sell their games in multiple geographic areas, or even everywhere around the globe.
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