Home > Features > The Pros and Cons of Alternative Billing • Bookmark   • Newsletters   • Register Search Options


The Pros and Cons of Alternative Billing

The Pros and Cons of Alternative Billing

March 1, 2010
Text size: 
Get XBIZ News
XBIZ Research
Will virtual reality boost the paysite market?
Yes, it will soon
Yes, but in a few years
Out of 179 votes. Results based on votes submitted by members of XBIZ.net social network.

" the Internet is still indeed for porn "

As another decade dawns, the online adult space is as competitive as it's ever been. Over and above millions of websites out there, surfers now have a virtually limitless supply of free material at their disposal thanks to all those tubes and torrents. Looks like the Internet is still indeed for porn, especially in the new free economy.

But all is not lost: Whilst the classic vanilla porn paysite may have had its day, there are still a plethora of products out there for which surfers are prepared to pay: be it a niche site with hard-to-find content, an immersive 3D world, or dating and cam sites whose end-user experience cannot be replicated on the tubes or elsewhere, sex still sells.

When it comes to turning those bytes into bucks, the credit card remains understandably the most popular billing mechanism with most webmasters, not least since it allows customers to enter into recurring monthly memberships.

However, in an era of increasing online fraud and identity theft, there are a whole army of people like me out there who have a card, but would rather not use them online — especially with offshore porn merchants.

With this is mind, webmasters can offer alternative billing mechanisms, each of which has its own benefits and drawbacks.

Phone Billing
From a customers perspective, the main advantage of this form of "buy now, pay later" method of payment is its anonymity. Surfers simply dial a premium rate number and pay the phone company with whom they already have a contractual relationship. Access to the desired web content is then usually then granted for the time that the surfer is connected to such a number, with no reference to this when they receive their phone bill.

From a webmaster's perspective, the main advantage of such billing is that it allows them to monetize traffic from all over the world thanks to the ubiquity of the cell phone. However, such billing does not support recurring memberships, and the phone companies keep a significant proportion of every dollar billed.

With phone billing, there are two key billing mechanisms: pay-per-minute (PPM) whereby access to premium web content is maintained whilst the end-user remains connected to a premium rate number, or pay-per-access (PPA) whereby the ordering process for the required password generates the revenue and the webmaster can then decide how much access time he or she wishes to grant per password sold.

Your phone-biller does not dictate the und-user cost, rather the phone companies with whom they have revenue sharing arrangements do. Remember to shop around for the best rates!

Premium SMS
Whilst Premium SMS is currently only available in 25 countries and therefore does not offer the global reach of phone billing, it remains a great micro billing tool for offering 'pay as you go' membership if you are willing to forgo a significant proportion of the end user pricing for the privilege of having the cellcos become collection agents on your behalf.

In the U.S., checks are cleared by the Automated Clearing House (ACH) network, a nationwide batch-oriented electronic funds transfer system governed by the National Automated Clearing House Association.

However, according to a source that accepts them, up to a third of online check transactions get returned, or never get through, but that those that do apparently rebill much better.

Elsewhere, checks are increasingly becoming redundant, with the U.K. Government recently announcing that they are to be phased out entirely by 2018.

Direct Debit
Direct debit is a method that allows users to bill directly from their bank account and is available in several countries, including the UK, Germany, South Africa and the Netherlands. It is scheduled to be available across the whole Single European Payments Area by the end of 2010, and is ideal for recurring monthly subscriptions.

In the United States, where checks are still more popular than bank transfers, a similar service is available through the Automated Clearing House ACH network.

In some markets such as Germany, e-banking solutions exist which facilitate a process whereby funds are automatically taken from the customer's regular checking account and instantly transferred to the vendor's bank account.

Within a few seconds after successfully authorizing the remittance, the online merchant receives a confirmation of payment so that he can deliver goods and services immediately.

Clearly, accepting cash via snail mail is not suited to ecommerce, but by working with a cash collection network intermediary, webmasters can start to make money from two previously unreachable types of customer: the unbanked and digitally nervous.

Customers simply pay cash at an extensive points-of-sale network such as convenience stores and gas stations in return for a coupon which is then entered into your website. Since this a cash transaction, it is free of chargebacks.

The upside from the user's perspective is the anonymity in paying this way, with no awkward forms. The downside, particularly during this cold snap, is having to leave the comfort of the web and get out in the real world in order to gain entry into the forbidden fruits of your members area.


Lubes, Lotions and Potions: Manufacturers Talk Gateway Products

Sensual body care products have strong consumer interest and plenty of appeal for customers of all types. With lubes, massage oils, creams, lotions, and sprays all bringing in significant sales, manufacturers... More »

Cam World: Top Models Often Reinvent Their Rooms

Throughout my travels this year, after meeting with many cam models and studios, I’ve observed a recurring theme among the crème de la crème — in order to stay on top, they often... More »

Adult Biz Faces More Obstacles Past Prop. 60 Battle

On Feb. 1, I completed 365 days as the Free Speech Coalition’s executive director. It was a turbulent first year, and when I received the 2017 XBIZ Industry Leadership Award I was startled, humbled... More »
Stay informed of the latest industry developments. Get XBIZ newsletters delivered to your inbox. Subscribe today!
Enter email address:

* To manage existing subscriptions click here.

Submit your press release to
multiple news outlets with 1 click.
Subscribe to RSS news feeds or
add free content to your website.
Access XBIZ news and articles
with your mobile device.
Subscribe to XBIZ World magazine, the industry's leading e-commerce trade publication, delivering in-depth coverage of the online, mobile and ancillary digital markets.


XBIZ.net Paysite Meetup

May 04 - May 04
Prague, Czech Republic

Eurowebtainment 2017

May 17 - May 20
Majorca, Spain

XBIZ Retreat

May 30 - Jun 03
Miami, Florida

XBIZ Miami 2017

May 30 - Jun 02
Miami, Florida
Everyday thousands of business professionals browse XBIZ's industry directory for quality products and services. Not listed yet? Your company could be losing potential new business. Submit your company today!
Use XBIZ RSS feeds to stay informed of the latest industry developments or as a content syndication tool for your website!