SocialGamesObserver: In 2000, paysafecard group released the first prepaid solution for online games and other services. What was your main motivation to get active in the gaming sector?
Michael Müller: Back in 2000, digital content was accessible free of charge. But we knew that it wouldn’t last forever and that people would sooner or later have to pay for their online newspaper just like for their hard copy. Paid content as we know it today did not exist back then – and neither did prepaid payment options designed for the internet. The general idea behind paysafecard was to create a payment method for the internet which is as convenient and secure as cash which can be used for purchasing online services and virtual goods. Just like newspapers and other services, we assumed that consoles and video games would go online someday and that the whole gaming sector would change – which is exactly what has happened. Especially with the increasing popularity of browser games and social games over the last three, four years, the online games market became very interesting for us. We saw the huge potential in the browser and role play game market and started focusing on this sector.
SGO: When did you start working with social games?
Michael: We started about two and a half years ago when social games started taking off.
SGO: Which opportunities do you see for paysafecard in this growing market?
Michael: We are very confident that our success in this market will continue. Social games are getting more and more popular which means that our target group is getting bigger every day. Another factor is that not everyone who plays online games has heard about paysafecard yet. As soon as people see the advantages that come with our vouchers, they will start using them. A prepaid voucher is the ideal solution for gamers because it is faster and more secure than a credit card whilst allowing people controlling their costs. Our experience has taught us that credit cards are usually the first payment option in every new online market, simply because that’s what people are used to. This often changes once a new business or company has reached a certain growth. That’s when alternative payment solutions become important. Especially in the online and social games industry, the market for alternative payment is huge. We know that some of our partners’ transaction volumes are based on alternative payment solutions which account for up to 70-80% of their transactions.
SGO: You founded paysafecard group in 2000. Can you name a few important milestones of your company regarding online games?
Michael: One of the first games that accepted paysafecard as a payment method was Habbo. Other highlights are browser games in general and our success on the German speaking market with partners like Gameforge, Gamigo and Bigpoint, Frogster and many others. We are also very happy about our progress in the social gaming sector over the last one and a half years. Users can use their paysafecard for purchasing Facebook Credits – a virtual currency for more than 200 games and applications on Facebook. It goes without saying that this is a massive step for us into the social games market.
SGO: Are paysafecard customers typically reluctant to use their credit card online or do they simply don’t have a credit card?
Michael: The credit card penetration in Germany is 26%. Just like in many other European countries, people normally use debit cards which cannot be used online. Some people don’t want to have a credit card as the annual charge is too high if you use the card just once or twice a year. Other people do not get a credit card because of their credit rating. For them, a prepaid voucher is the ideal solution as it enables them to play their favourite game whilst controlling their expenses. With paysafecard, one has to pay up-front which means that users can’t spend more money than they actually have. But most of our customers simply do not want to use their credit cards online because they don’t want to give away their personal data. Especially parents prefer to get a paysafecard for their children rather than giving them their credit card to pay for their online games or virtual goods.
SGO: Can you describe the typical paysafecard user?
Michael: There is no typical paysafecard user. It really depends on the country, the region and the sector. The majority of our customers are between 16 and 49 years old – which is a higher average age than people would expect. The average transaction [the amount of credit uploaded in a game] is about 20 Euros and the average total amount per user is about 40 Euros per month.
SGO: How do you see the growth in the European gaming industry?