The market size is expected to exceed USD 50 billion by 2027. Moreover, a recent survey of 14,500 consumers across countries found that streaming services are the biggest spending category after eating out and food deliveries. With this big an opportunity in the market, the financial ecosystem has also evolved to support online entertainment and gaming solutions.
Traditionally, bank transfers or credit or debit cards have been the key way to make online purchases. However, there are three drawbacks to this payment mechanism.
New payment solutions have arisen to counter these challenges. Also, the evolving nature of the entertainment and gaming industry has led to the consideration of new payment methods. For example, unlike back in the day, gamers don’t go to brick-and-mortar gaming shops anymore. They can sit in the comfort of their home or even access games with the swipe of their mobile phone. This has made gaming a more regular feature of life. The same is true for streaming services, that have offered an alternative to a one-off visit to the cinema.
As a result, online entertainment now lends itself well to subscription services. A direct debit from the bank account makes it convenient to just enter the payment details once and assure continued access to multiple entertainment options.
It’s also speculated that buy now, pay later services can become popular in the online gaming market through services like Klarna over time. It can also be a win-win for gaming and entertainment companies. They can get a loyal customer base among young people who don’t yet have income security.
Arguably, the biggest innovation in both easing and securing online transactions however has been payment wallets. It’s not for no reason that PayPal is a payment giant today, with a revenue of USD 30 billion in 2023 alone. Payment wallets make it easy to deposit money and pay for a purchase with the bare minimum information given out. Further, the likes of PayPal also offer purchases on credit now, which can further ease making purchases. Also, it’s a convenient way to receive any refunds back into the wallet.
Next, the fast spread of smartphones coupled with the easily available internet infrastructure has turned mobiles into wallets. It’s common to download both free and payment-based apps on the mobile phone today. It’s no surprise that the app market was estimated to be USD 171 billion in 2023 and growing. This too is both safe and convenient. A user’s financial information is saved onto the phone and only basic access details are required to make purchases thereafter.
However, particularly for older generations, the appeal of traditional payment systems like bank transfers or card usage is still undeniable. They are just the most straightforward way to deposit money. There is good news here as well. The regulations have tightened over the years. Customers could raise disputes if they made payments erroneously or did not receive their payments. Also, if there’s fraud on the account, chances are that the customer will be reimbursed.
The nature of payment systems is still evolving for both entertainment and gaming. For example, in-app purchases are growing in numbers and cryptocurrency-based payments are also acceptable for some platforms. Even now, though, there’s little denying that payment systems have evolved a lot over time.
The rapid growth of smartphones and the easy availability of the internet have made access to mobile purchases more convenient than ever. These are supported by the rise of innovations like digital wallets.
They protect the customer’s financial information and charge a small sum for transactions. They are also a convenient way to receive any refunds that might be due. The rapid growth of PayPal is an example of the potential of the industry.
But make no mistake, traditional payment systems like bank transfers or card usage are also becoming more secure as regulations tighten. As a result, there are multiple safe and convenient ways for customers to engage in the fast-growing online entertainment and gaming industry.
