If you want your mind blown, look no further than how combining multiple technologies will rapidly advance payment facilitation in real time payments. While attending the Worldpay Rethink eComm conference, I evaluated merchant payment capabilities and reviewed the new innovations and how they can be combined with existing payment functionality to create a new payment channel.
Issuers who are not organizationally ready for real time payments, prepare for next year. A dynamic real time payment method is coming to consumers in a channel you least expected. Virtual reality, massively multiplayer online role-playing gaming (MMORPG)
Imagine yourself as a gamer. You are in the middle of a MMORPG session and you run out of the object needed to kill the monster in front of you. But someone on your team has been hoarding swords and grenades. You offer to make a purchase so you can buy what you need to continue in the game. The seller will need to provide a method of payment outside of the game, in many instances PayPal. The buyer leaves the game, makes a payment, and waits for the payment to process before they can receive the weapons and help defeat the monster. It can take DAYS. And in the world of instant gratification this is an awful experience.
Now imagine new technology coming to the forefront merged with existing payment technology.
- Virtual Reality Payments– built into the game design the ability to make a payment. Select a payment method and have a secure PIN pad drop in the screen. The user selects their PIN but with each number selection the PIN pad changes dynamically adding security features to reduce fraud.
- One Click Payment - the expansion of single click payments like MasterPass and Visa Checkout to include Union Pay and future payment options in the near future.
- Real Time Payout – the ability of the receiver to know that funds are valid as soon as the buyer hits the submit button. The launch of MasterCard Send and Visa Direct into a merchant platform enables this experience
- Virtual Prepaid Cards – non-financial institutions will be more likely to provide prepaid card programs to facilitate gamer buying and selling. The easier the gaming company makes the channel commerce the odds of the consumer continuing with the game go up.
As an issuer or payment service provider are you ready for the advancement? Consumers will be more likely to make purchases in games. Financial institutions need to have a “Top of Wallet” strategy if they want to get ahead of this payment channel. If you don’t create a strategy the customer will take the option the merchant makes easily accessible.
It is unclear yet what the volume projections will be until a gaming company announces which games the technology will be included in. The World of Warcraft has the largest subscription base with millions of users logging in.1 MasterCard’s recent announcement of partnership with League of Legends is an indication that payment companies are looking at the digital gaming community as a growing channel to explore.2
As with any new channel the payments ecosystem should review and be prepared to handle disputes and reports of fraud. Immediate payments could potentially fall under consumer protection regulations, such as Reg E and Reg Z in the United States. Fraud strategies and analytics will need to understand the new payment model to avoid issues of false declines or rapid model fluctuations. The day of a game launch with the new payment method and issuer channels will see a rapid swing in fraud modeling scores. If the fraud operations team is not aware of the launch, cards can be placed on hold without considering that the consumer is starting a new payment channel.
Are you ready? Game on.