Play2Pay CEO Says Gamification May Be The Future Of Payments

Log on. Choose a game, play the game. Watch a video. Complete a survey.

Get paid for it all — and reduce your smartphone bill — all while using that very same smartphone.

The old saying still holds for brands and retailers reaching out to consumers: Half of their advertising dollars are wasted. The problem is, they don’t know which half. At the same time, these companies face pressures surrounding advertising, cookies and data privacy.

Phone companies, subscription firms and utilities must grapple with subscriber churn, which adds to acquisition costs.

Play2Pay’s CEO Brian Boroff told Karen Webster gamification is the “new future” of payments, where brands, jockeying for users’ attention, pay for it via app downloads and usage, with the ripple effect of helping phone companies — and eventually other firms — reduce churn and get paid by their own users, who are the gamers themselves.

The Value Exchange And The Demographics

He likened the process of converting gamers’ attention into currency to a “value exchange” between enterprises and individuals. The exchange is facilitated by an opt-in model and rewards platform that uses that attention as currency to help reduce their bills by as much as 30 percent.

Boroff said the platform has scale that touches more than one billion mobile subscribers across the globe, spanning the United States, Latin America and Southeast Asia, among the markets that have the highest smartphone penetration in the world. The wireless providers partnering with Play2Pay currently have 100 million subscribers, he said. The company has estimated that service providers have traditionally realized up to 17 percent revenue expansion as a result of subscriber engagement on the Play2Pay platform.

Tapping into the playing/paying model has a natural tailwind in place. Gaming, of course, has mushroomed into a worldwide phenomenon, with hundreds of millions of users worldwide.

The demographics skew heavily toward 18- to 45-year-olds, said Boroff, and each territory has its nuances.

The U.S. is marked by relatively higher numbers of female gamers, who tend to play a broader range of casino, puzzle and arcade-style games. In contrast, Indonesia has a relatively younger, predominantly male demographic that embraces multi-player games.

The Cost Savings

To get a sense of the cost savings, Boroff said in the U.S., users who spent a couple of days playing the firm’s top-performing game could save more than $70 monthly off their phone bills in what might be thought of as a closed-loop payments ecosystem.

“The more you play,” he said, “the more the mobile gaming company is prepared to pay, quite handsomely, for that engagement.”

That aforementioned $70, he said, can represent the pass-through that goes to the end user; most individuals are on a $50 to $60 monthly package, so, as Boroff said, the gamification might more or less cover their monthly bill. More casual gamers, he told Webster, get about $1 to $2 per day of play.

And in terms of the monetization of the gaming — the paydown of the bills — nuances abound too. The U.S. is a post-paid market (Play2Pay is preloaded on some devices); other markets gravitate toward pre-paid offerings.

Play2Pay’s internal research, he said, shows that the average savings applied to the phone bill across the entire installed base is around $15, which equates to that 30 percent savings rate.

Gamification, he said, offers an “alternative way to make payments — to keep the ‘lights on’ for your mobile device, so to speak.” And while the B2B2C model is primarily used for wireless carriers, he said the company is now in discussions with utility and cable companies and will eventually try to bring the model to financial institutions (FIs) and banks. He contended the platform can work anywhere where there’s a strong consumer relationship in place with recurring service, but where commodification and churn represent constant threats.

“We have a deep, direct integration into their billing and payment platforms,” he said, which defrays payment processing costs. Boroff said that because the consumers opt-in, and because the advertisers such as DoorDash and Pizza Hut pay for the engagement, the transactions are free to the wireless providers and are essentially guaranteed. The return on investment (ROI) is high enough that all stakeholders should find the engagement model an attractive one.

Consumers, he said, “are more than happy, willing and able to share personal data because they’re getting something back.”  For example, answering a question about whether one has pets may net the survey taker 50 points, while additional detail about whether they have a dog gets additional points — and those points are redeemed as currency used to pay down a bill or redeem offers with a retailer.

Play2Pay, Boroff said, collects this type of information to improve the targeting of customer experiences that then generates more ROI for brand partners. Boroff added that data never is sold outside their ecosystem.

At present, 90 percent of redemptions are for mobile top-ups or bill payments with service providers.

Looking Ahead

Though currently, the platform is “closed” — working with service providers, the value of the engagement is channeled into making a payment toward that provider’s bill — there’s the future vision of Play2Pay being more “open,” meaning that it would be a universally accepted feature.

Play2Pay said earlier this month that it raised $13 million in a Series A funding round. Boroff said the money will be funneled toward user engagement, to keep growing the size of the audience, and to boost the revenue that’s generated per user, while getting more brands to pay to access the ecosystem.

“We’re going to be investing in all sorts of ways that we can monetize the daily habits of people on their mobile phones,” he told Webster, adding that “we are, in effect, the world’s first ad-supported and payment rail.”