Paytech Adoption: How Are Reward Schemes Influencing Payments and Loyalties?

https://thefintechtimes.com/paytech-adoption-how-are-reward-schemes-influencing-payments-and-loyalties/
https://thefintechtimes.com/wp-content/uploads/2022/02/paxapaw2cz6s7kizhut1-150x150.jpeg?#

This February, The Fintech Times is taking a deep dive into the world of gametech. Grab your headsets and controllers and plug in to hear about the latest tech and celebrities influencing the market to the development of eSports and much more.

The ability to earn as you play has revolutionised the modern economics of gametech, generating user engagement through driven in-game currency and reward schemes.

Today we’ll be speaking with industry experts from Episode Six, Spielworks and Q2 to discuss how the growing prevalence of reward schemes in gametech has impacted payments and user loyalty.

As John Mitchell, CEO at Episode Six explains, such a shift is best represented by understanding how gametech is operating today, especially within the realms of blockchain-based games.

John Mitchell, CEO at Episode SixJohn Mitchell, CEO at Episode Six
John Mitchell

Whilst speaking to The Fintech Times, he cites the popular game Alien Worlds as one of the most progressive adopters of this technology, stating: “In Alien Worlds, players compete using Non-Fungible Tokens (NFTs), earning an in-game currency called Trilium. There are as many as 3.6 million people already playing, earning, spending, and trading in Alien Worlds alone. The currency and assets that a player holds in this blockchain-based game are portable beyond the boundaries of the game itself.”

Adrian Krion, the Founder and CEO of the blockchain-based gaming platform Spielworks, where developers can turn gaming rewards into NFTs, adds to these thoughts with: “Tokens add a layer of cash-equivalent payment that users can receive simply by playing the game. This usually results in 20 to 30 per cent more user loyalty compared to users attracted through the regular paid channels. With fungible tokens, this loyalty is driven by the sense that users get to own a stake in the game’s intrinsic economy.”

Adrian Krion, the Founder and CEO of the blockchain-based gaming platform SpielworksAdrian Krion, the Founder and CEO of the blockchain-based gaming platform Spielworks
Adrian Krion

As Krion goes on to explain, the use of NFTs can create a more emotionally compelling end experience for the user: “With non-fungible tokens, or NFTs, there is even more at play: The uniqueness of an NFT offers the user a more emotionally engaging experience, such tokens are easier to get attached to, in a way.”

Although the process of establishing the software can be lengthy, it’s an investment that can bolster the value of a gaming company, if led in the right direction: “Getting the tokens, whether fungible or not, is in most cases a matter of asset investment and, generally speaking, effort,” Krion continues. “The latter can range from a few clicks or a lengthy quest in an open digital world, depending on the game. In itself, this combination is very engaging for the user, adding an extra risk and reward calculus to the game’s mechanics.

“That said, it’s hard to create a token economy that can keep going for a long time. More often than not, the play-to-earn model assumes the game will enjoy a steady inflow of new players buying the tokens. If this flow stops, and users stop signing up and investing into the game’s token, its economy will quickly grind to a halt.”

The Right Bridge

Developers must recognise the potential gains of reward-based token systems to appease their fans, whilst creating a service that they expect. Utilising the right technology, such as flexible APIs, can allow companies to power loyalty and revenues in a completely new way.

“This can bring to life any imaginable use case for the payment experience across any payment system, such as virtual payments, digital wallets and tokenisation,” explains Mitchell.

“In the gaming space, the right tech can bridge the gap between both legacy and new payment systems, processors and service provider infrastructures in order to meet the service demand that today’s users expect. For example, one demand may be providing the ability to convert various digital assets, in real time, during transfers and purchases. You would be able to take your loyalty card reward points from one chain of stores and use them at another or convert them into cash – such as Alien Worlds.

“The revolution in these new ways to pay has already begun and will only continue to accelerate to cater to the demand and appetite of players – particularly as we witness the growth of the metaverse.”

Ahon Sarkar, VP Product & Strategy at Q2Ahon Sarkar, VP Product & Strategy at Q2
Ahon Sarkar

Ahon Sarkar, General Manager of Helix by Q2 closes our conversation with: “Gaming has set the stage and laid the groundwork for global engagement, virtual environments and currencies, and personalisation since its inception. It is a truly immersive experience that fintechs and others continue to embrace. Gamification has become a widely used strategy across all industries. We are entering a new age where gaming’s influence is abundant, finance will continue to be a part of that influence as the digital and physical realms continue to become more intertwined.”

  • Tyler is a Fintech Junior Journalist with specific interests in Online Banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

https://thefintechtimes.com/paytech-adoption-how-are-reward-schemes-influencing-payments-and-loyalties/