Social Gamers Are Most Familiar, Comfortable With Big-Brand Payment Services

[Editor's Note: The following article presents analysis and data excerpts from Inside Facebook Gold, our research and data membership service tracking Facebook's traffic growth and demographic landscape in global markets.] When it comes to web payments, Facebook is unique, giving games and other apps a massive international reach of over 500 million people -- and yet, only a single-digit percentage ever make any payment. While conversion rates in the low single digits are standard, and certainly still interesting at volume, dozens of startups have dedicated themselves to making the barriers to payment as low as possible and in doing so hope to get more people spending more money. Payment options now include credit cards, mobile phones, promotional offers, promissory notes and others, while Facebook is working to gain user recognition with its virtual currency, Facebook Credits. What do users think of these many choices? We recently ran a survey as part of Inside Facebook Gold, our research and data service covering Facebook's growing global audience, in order to better understand real users' attitudes and behaviors toward payments. The survey included 384 Facebook users, nearly all of whom were active social game users, and was conducted throughout the month of September 2010. Today, we're looking at the first of the survey's three sections, dealing with user perception of a dozen payment methods. The first and most important element of perception is whether users recognize the brand at all. We offered a dozen choices based on payment options visible to users in the platform's top social games. We asked survey takers to select all the services that they recognized: It's important to note that some of the payment methods listed above are made available to users at different stages of the payment selection process -- Facebook Credits, for instance, is a virtual currency, while Visa is a payment method. A user might opt to top up on Facebook Credits to redeem in their favorite game, and then pay for the Credits with a Visa credit card. Users are likely unaware of this distinction, however -- the important question is which names they associate with making payments. Over 80 percent of respondents recognized the major credits cards, while almost 70 percent knew about PayPal. Following those two major payment methods, the recognition rates drop dramatically. It's interesting to note that Amazon's brand recognition is almost equal to Facebook's -- although it's not clear whether survey respondents thought of it as a payment method, or simply recognized the name. The most interesting data is on the smaller payment methods listed. Three -- PayByCash, Ultimate Game Card and PayMo -- were recognizable to over five percent of respondents. Note that PayByCash and Ultimate Game Card are in fact owned by the same company, PlaySpan, which has done a good job so far of creating an international brand. Even Social Gold, which was used by dozens of Facebook games at its peak and is now owned by Google, was recognized by only 2.7 percent of our survey takers. This shows just how difficult building up brand recognition is for payment companies, and suggests that Google may do well to leverage its own brand recognition and rename the service or incorporate it into Google Checkout, if they continue to use it. Our next chart helps illustrate just how important brand recognition is for payment options. Survey respondents chose which single option they would prefer to use if they planned to buy virtual currency: User familiarity gave credit cards and Paypal a huge edge, with about 60 percent of the vote combined. Very few users preferred a method other than these two (except for users who preferred not to pay at all, by using promotional offers). Facebook itself was a popular choice, although again, this will likely result in use of either a credit card or PayPal. PayByCash, Ultimate Game Card and Rixty all picked up small minorities -- which, considering that all three are cash and gift card options, may mean that the users who picked them don't have credit cards or a PayPal account. Overall, the results of our survey don't suggest that smaller options are failing -- some are doing quite well -- but they do have very low levels of brand recognition, especially when compared to competing options that have been on the market for decades. Over time, the success of the newer brands will depend on how far they can establish themselves as household names. This survey was conducted as part of our Inside Facebook Gold research and data service that also provides regular data on Facebook's growth and demographics around the world. Full survey results from all three sections of the survey are available at Inside Facebook Gold.

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Social Gamers Are Most Familiar, Comfortable With Big-Brand Payment Services

Chris Morrison

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Chris Morrison