E-Wallets Provide Versatile Alternative
The almighty credit card continues to be the dominant payment method for e-commerce in the U.S., but when one travels around the world, it becomes quite apparent that man does not live by credit card alone in cyberspace. Indeed, the fact that credit cards are so popular among American consumers doesn’t necessarily mean that they are as popular among consumers in Europe, Asia or Latin America, and American adult webmasters who hope to reach as many non-U.S. markets as possible need to offer as many payment/billing alternatives to credit cards as possible. One area of alternative payments that has grown in popularity in various parts of the world is the pre-paid/pre-loaded sector, which includes e-wallets (also known as digital wallets). With ewallets, one simply adds funds to the e-wallet electronically, and those funds are used to make payments.
The Northern California-based PayPal (a subsidiary of eBay) is the best known company in the prepaid/ pre-loaded sector, but many other companies are also operating in that sector. Well known companies that offer pre-paid/pre-loaded options include, among others, Paxum (based in Quebec, Canada), Payoneer (a New York City-based company that has been in business since 2005), the London-based YESpay (which also has offices in Toronto and Indore, India) and Failsafe Payments (which has a European office in Nicosia, Cyprus and a U.S. office in Cleveland, Ohio). Another company that has offered ewallets is Zombaio Payment Services, which started in the U.K. in 2003 before opening a U.S. division in 2007; Zombaio has described itself as “the only IPSP totally customized for the adult entertainment industry.”
“E-wallet payment methods such as Paxum offer a secure, versatile and convenient option for customers to send and receive money worldwide,” explained Ruth Blair, sales manager for Paxum. “Some of the key advantages to using Paxum as a payment method can be categorized into two distinct groups: business account holders and personal account holders.”
Blair said that for Paxum’s business account holders, the advantages of the pre-paid/pre-loaded approach include easy bulk payments, low transaction fees and “e-commerce functionality.” And for Paxum’s personal account holders, Blair added, the advantages include the ability to receive payments immediately, multiple withdrawal options, peer-topeer transfer payments and multiple currency options.
Currency options are an important consideration for adult websites. Not everyone who joins an adult membership website or purchases adult tangible goods (such as sex toys, adult DVDs or BDSM equipment) online does so in U.S. dollars; millions of adult online transactions are also made in currencies ranging from the British pound to the euro to Swiss francs to the Japanese yen. For adult webmasters, an important part of thinking internationally is having a multi-currency outlook—and e-wallets certainly don’t have to be in U.S. dollars.
When IPSPs (Internet payment service providers) are asked to described the advantages of e-wallets and the pre-paid/pre-loaded sector, one word that comes up a lot is “security.” With funds having been added to the e-wallet or digital wallet, IPSPs often point out, online payments are both secure and easy. Patrick Sallnert, chief operating officer for Failsafe Payments, said that ewallets are advantageous because they offer “much higher safety for both the merchant and the customer compared to credit card payments” and offer “high security and ease to pay for goods and services.”
With the adult online arena having grown increasingly competitive, adult webmasters who are based in the U.S. are realizing, more and more, the importance of thinking internationally; when consumers in the U.S. are tightening their belts, finding new customers in Europe or Asia becomes all the more important. And Blair pointed out that another major advantage of an e-wallet program like Paxum is the ability to receive electronic payments quickly from many different parts of the world.
“E-wallets like Paxum are popular worldwide,” Blair observed. “From the U.S. and Canada to Europe, Asia, Australia and beyond, there is a wide range of countries represented among the client base at Paxum. International clients appreciate the fact they don’t have to wait to receive their payments; plus, if they use the Paxum pre-paid MasterCard, clients are also able to withdraw their funds in local currency without any additional Forex exchange fees. This feature is very popular among our international clients.”
Blair continued: “Today’s society lives and breathes digitally, so it’s not surprising to see an increase in the number of products and services available to cater to the ever-growing online demand for easy payment options. It is likely that the pre-paid/preloaded sector will experience greater growth in international waters. However, there are still plenty of valid reasons for U.S. customers to use a service like Paxum.”
Asked to address international trends in the pre-paid/pre-loaded sector, Sallnert responded: “The U.S. and the U.K. are big on PayPal. Moneybookers and Ukash are quite known in the EU.” And Sallnert added: “Some payment brands are taking off in the EU. There is still much room for brands like PayPal to grow quite a lot in Asia and Europe, while PayPal does not have that much room to grow in the U.S. since they are well established there already. I think we will see a big growth in the Asian region, followed by the EU and Australia.”
Blair said that Paxum’s growth as a company underscores the viability of the pre-paid/pre-loaded sector. “Feedback from Paxum customers has been very encouraging so far,” Blair noted. “Easy access and low fees, as well as the ability to instantly access deposited funds, helps to create the type of experience that Paxum customers want. With fully trained customer service representatives on hand 24/7, Paxum is constantly providing the best possible experience and service to our clients. Paxum’s popularity illustrates our high customer satisfaction level.”
Payment trends in the online adult entertainment industry will no doubt continue to evolve as the Internet continues to evolve. But the popularity of e-wallets is showing no signs of decreasing, and it is clear that the pre-paid/pre-loaded sector will remain a popular alternative payment method for some time to come.