The industry is increasingly adopting a Freemium model with online games where players can get into the game for free, but pay for gear, access to special content and unique features. The problem is that kids, often the targeted audience, don’t have credit or debit cards, and can’t use the cash they have to participate in this model. This could shrink the available cash for an existing game by anywhere from 25% to 75%, depending on the demographic of the gamers currently playing for free.

A relatively new tool recently came to market that could address this problem, if game makers embrace it. It is called PayNearMe: It allows cash customers to transact digital transactions simply by going into a 7 Eleven or other authorized retailer, which may be more convenient than buying a boxed game.

PayNearMe

From the viewpoint of the buyer, PayNearMe works a lot like PayPal, but with one additional step. The customer sees as a payment option PayNearMe, they execute that option, and then either on their smartphone or printer, they get a bar code. They take this code to an authorized retailer with the cash to pay the fee and that retailer takes the cash and completes the transaction. The service gets the cash nearly instantly and the customer returns to find whatever they paid for in their account.

The fees associated with the transaction are more similar to credit card fees and far cheaper than most other cash based alternatives like pre-paid cards or refillable debit cards. Potentially, this is a huge and currently missed revenue opportunity.

Logistics

PayNearMe uses much the same back end structure that prepaid cards use. The difference is that rather than the customer initiating the process by buying the card, the merchant (in this case the game service provider) initiates the process when the customer wants to make a transaction. Much like PayPal, PayNearMe sends a token-based authorization and transfers the fund when the money is actually paid.

Suddenly you have a way to collect money from “underbanked” customers who want to buy things but currently don’t have an easy, or cost effective, method to do it. If you have a lot of players, but few are actually buying the upgrades, it could be because they are mostly cash players and you haven’t provided a cash payment method. PayNearMe could be the answer you didn’t know to look for.

With Game revenues plummeting at the moment (some have the drop at 25%), finding ways for players who want to pay but can’t may be a way to recover some of these losses for those firms that also have online titles. Given online is the likely future of most gaming revenue making sure you can get every cent is a critical part of any successful strategy. In short, for the Freemium on-line game provider, PayNearMe may be the answer the question you didn’t know to ask.