The Paysafecard Group has brought its prepaid voucher product to the United States as it tries to capture a piece of the online gaming market.
Consumers may purchase Paysafecard voucher in $10, $25, $50 and $100 denominations at locations such as wireless phone card retailers. Consumers use a 16-digit PIN to complete a transaction at a participating gaming company’s website or other online merchant. Paysafecard debits the amount paid for goods and service from the voucher’s balance.
Austria-based Paysafecard is partnering with The Bancorp Bank Payment Solutions Group. Bancorp issues the vouchers while Paysafecard manages the program and processes the transactions functions as the program manager and processor.
Paysafecard partnered with a bank largely because of the changing regulatory environment in the payments industry, according to Neil Steinhardt, Paysafecard’s U.S. general manager. “Knowing the environment is [changing], partnering with a bank is a great idea,” he says.
The vouchers are available at some 12,000 U.S. locations. Paysafecard has distribution agreements with PreCash Inc. and is working with IPP of America Inc., the national network of independent neighborhood-based payment centers.
NHN USA, a wholly owned subsidiary of NHN Corp., is the first U.S.-based gaming site to accept Paysafecard vouchers. Steinhardt expects its European gaming partners to expand to the U.S. knowing that Paysafecard is an option for gamers.
“[Gaming] is our fastest-growing segment in Europe, and a lot of those companies were asking us why we’re not in the U.S.,” Steinhardt says.
Paysafecard expects to branch out beyond gaming to other digital content such as music downloads, Steinhardt says. The company does not plan to associate itself with online gambling sites, he adds.
Some 300,000 merchant locations sell Paysafecard vouchers in Europe and South America.
Adil Moussa, an analyst for Boston-based Aite Group LLC, believes a solid distribution network will help Paysafecard gain traction in the U.S. “Part of the success for a business like this is to find distribution [channels] to do this on a large scale,” he says.
Paysafecard’s challenge, however, will be how consumers perceive a voucher system compared with a prepaid card, Moussa says.
Entering a 16-digit code might prove to be cumbersome for some consumers, Moussa contends. “I don’t think consumers are used to the idea of grabbing a voucher and taking it back home as opposed to a plastic card” they long have been comfortable using, he adds.
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