Embracing Prepaid Cards

16 February 2004

One-third of all German and Austrian Internet users is interested in sports betting and games of chances and has played via Internet.

According to the online research conducted by Germany-based Marketagent.com, which interviewed 1,397 persons in Austria and Germany, payment security is a chief concern for the players.

The research also found that punters favor a prepaid solution and that the advantages for shoppers and gamblers on the Internet are: No credit card needed; misuse is not a problem; they have no worries for protect privacy (even staying anonymous).

Above that, the mobile phone market shows that the number of prepaid contracts is significantly higher than long-term contracts. The concept of prepaid cards is an established and well known system. Users know about the advantages and amenities of this system.

To that end, Wertkarten AG of Austria has developed paysafecard, a product that the group is calling Europe's first prepaid card for shopping and gambling on the Internet.

The product has been available in Austria since November 2000 and in Germany since 2001. It's also now available for sports betting.

According to Marketagent's research, the motives to use the paysafecard for Internet gambling are: simplicity in use (52.2 percent); security (47.8 percent); anonymity (45.7 percent); decreasing trust in credit cards (37 percent).

The paysafecard offers two types of prepaid cards: the classic card (blue) with a value of 25 euro, 50 euro and 100 euro; and a red card for under-18 consumers with a value of 25 euro and 50 euro. The under-18 paysafecard cannot be used at gambling and adult sites.

To use the paysafecard, the customer scratches off the visual barrier on the back to reveal a 16-digit PIN code. To buy a product, the user chooses paysafecard as a payment method, clicks on the paysafecard icon and enters the PIN code. The selected item has then been purchased and the price will automatically be deducted from the paysafecard. If the price of the product exceeds the credit on the paysafecard, the user can combine up to 10 paysafecards simultaneously to reach the necessary amount.

The paysafecard payment model was developed by IBM Global Services and is hosted by IBM RS/6000 servers guaranteeing a maximum server stability. Two independent Internet service providers connect the system with the Internet.

This system is fully equipped and prepared to fulfill all requirements for the intended expansion within Europe.

Strategic Banking Partners are Commerzbank AG and BAWAG/PSK-Group are card issuers. According to Wertkarten AG Co-CEO Michael Altrichter, more than 1 million cards are sold and 80 percent to online gamblers.

There are two types of paysafecard-gamblers: 15 percent are "heavy users," placing more than 700 euro per month; 45 are "newcomers," placing less than 50 euro per month.

Several online gambling sites--betanwin, interwetten, gamebookers.com, EuroSportwetten.com, wetten.de, Kasino on Net, Casino Club and Starluck--are already using the system.

Rob van der Gaast has a background in sports journalism. He worked for over seven years as the head of sports for Dutch National Radio and has developed new concepts for the TV and the gambling industry. Now he operates from Istanbul as an independent gambling research analyst. He specializes in European gambling matters and in privatizations of gambling operators. Rob has contributed to IGN since Jul 09, 2001.