As innovation within payments continues to grow the customer journey, the importance of the relationship between the payment sector and affiliates becomes increasingly more significant.
Lorenzo Pellegrino, CEO of Income Access and Digital Wallets at Paysafe, sat down with Affiliate Industry Review to discuss why innovation within the payment sector is crucial for affiliates, as well as how affiliates can work with payment companies.
Affiliate Industry Review: How can innovation in the payment sector help the growth of affiliates?
Lorenzo Pellegrino: Digital adoption in the gaming space has moved at a faster rate than many other sectors, and online gambling is going from strength to strength. In the UK, the online gambling industry earned £4.7 billion between April 2016 and March 2017. This in turn has supported the growth of the affiliate space and we see this channel growing continuously as new product, tech and search tools are being created. We are invested in this channel ourselves for the growth of our digital wallets services, Skrill and NETELLER, and understand the value that affiliates bring within the marketing mix.
Specific innovations in the payment sector like real-time payments can facilitate affiliate growth. Currently, affiliate programmes typically pay their affiliates once a month; however, with innovations such as real-time payments and crypto currencies, this will give affiliates cash in hand at a faster rate, which can then be invested in their marketing campaigns.
AI: Can affiliates and payment companies cooperate when it comes to utilising data?
LP: Analytics on all acquisition channels, including the affiliate channel, are integral in giving operators an understanding of what marketing strategies are successful and whether they should be sustained. It is imperative that any analytics and tracking tools provide granular data on all levels including the channel, the player, the affiliate, as well as on an overall brand level.
Players interact with brands across a variety of touchpoints, both at a pre- and post-transaction level. Multi-channel tracking allows iGaming operators to see how those touchpoints are working together. Having all this data in one place, in one tool, serves a common need for all digital marketing and acquisition managers.
AI: When it comes to entering new markets, can you outline some of the challenges for payment companies?
LP: There is a wide variety of alternative payment methods available for operators to integrate and accept today. Combined with the increasing number of devices which consumers use to pay, it can be a challenge to identify the relevant portfolio of payment methods to accept when growing a business abroad. Businesses should rely on the support and knowledge of their payment service provider to secure the relevant offering according to their targeted markets and help navigate the international regulatory environment.
Considering what existing services are already in place and are widely used in the region, and factoring in local regulations are the key challenges for payments companies. Local alternative payments are often operated by local banks, use local currencies and are designed for their market’s unique applications, settlement processes and country regulations. In addition, they can also carry significant brand equity and trust.
Offering innovative, engaging and localised payment solutions can help differentiate businesses looking to compete in international markets. Trusted payment partners can advise on popular payment methods and guide operators with the right strategy.
In underbanked markets, prepaid, digital wallets or bank transfers are great alternative payment examples that allow consumers to make online purchases, without a credit or debit card. By 2022, the global prepaid card market will be worth over $3.5 billion, with Europe dominating the global market in terms of revenue and demand, accounting for half of that figure.
AI: Is the rise of cryptocurrencies likely to hamper or help innovation within the payment sector?
LP: Cryptocurrencies have long been touted as ‘the next big thing’, and they are becoming more widely available. There are certainly aspects which support innovation — they’re created digitally, so they don’t need to be converted, and they’re difficult to counterfeit. And, there’s an argument for the fact that because they’re not tied to a single country’s exchange rate, interest rates and other charges, they’re faster, simpler and cheaper to use in an international setting.
However, media attention alone doesn’t make a success story. There’s still a lack of regulation in this space, making some reluctant to adopt cryptocurrencies due to the risk associated with them, and high volatility probably won’t help boost confidence in the short term. After the recent value losses, and the increasingly widely-held perspective of cryptocurrencies as an investment rather than a way to pay, it seems that there’s still a steep path towards broad acceptance.