Online Transaction Truths: Steady Navigation
The online world has grown up. Gone are the days of consumers not trusting technology or being hesitant to buy products and services through the Internet. Indeed, Amazon, iTunes, smartphones and global shrinking have created an environment where online buyers are more than willing to virtually traverse to new places and make purchases. Most don’t even give it a second thought.
With easy access to the usual payment types, in which the traditional world of credit cards has saturated even the newest of buyers, technology and alternate methods for making purchases has become embraced. However, today’s buyers also know what they like, know what they don’t and are savvy and opinionated enough to let the markets know. For some of the online adult industry, this has become a source of frustration and fear — and often over-reaction. For others, it is providing more opportunities to reach new consumers and grow their business.
Of course, merchant (and even some governmental) reaction levels have varied greatly, from throwing every payment type and option at the buyer —hoping with all hope that they capture a couple of new sales from the process —to clinging to a narrow set of trusted options, essentially managing payments with a hatchet. Why such disparity in managing payments? One possibility is that with the advent of new debit methods, gift cards and prepaid cards, as well as erratic quality of transactions from certain countries and regions, the fast-paced change of the buyers’ needs can appear to be baffling. Truth is that it requires a balance of options, knowledge, and tools to cater to how people want to buy — and which method is the best for accepting the payment. This is where a good ecommerce partner can help.
And if that’s not enough to raise a whole series of questions, the world has also added a new level of complication. As we have seen in the U.K., the hatchet approach has received political support. Independent agencies have broadly blocked certain payment types for all buyers as a way to protect a small subset —and this narrow slashing approach to providing a safe and fair buying process throws other valid buyers to the wayside. Our industry is also faced with the threat of changing card association changes, as well as government initiatives to control content and users for short-term political gain. At times it can certainly seem like things are being stacked against conducting online sales for high-risk content, and yet the consumers are there and the market remains strong. Knowing this, navigating the changing environment can become the key to running a successful online business. And knowing which questions to ask your ecommerce provider goes right along with that.
THE FUTURE IS NOT BLEAK
While it may be easy to become discouraged with some of these circumstances, the reality is there is opportunity. And that opportunity is global to be certain. As evidenced in some recent statistics we pulled regarding overall sales by country for Europe that you may have seen right here in XBIZ World, more than one-third (34 percent) of purchases were made in the U.K. However, the percentage share of credit card sales in the U.K. is just 35 percent, with other European countries having even lower credit card sale percentages. The consumers are there. It becomes a matter of offering them options for making purchases they are comfortable using.
There are of course a number of debit options within the marketplace, and a good ecommerce provider can help you reach these consumers by offering different payment types. With the recent ATVOD actions in the U.K. and the SEPA changes scheduled to take effect in February 2014, what has sometimes been referred to as “alternate payment types” or “alternative billing” quickly takes on increased significance. Hundreds of millions consumers are buying from within the greater U.K. and E.U. regions, so it’s definitely worth asking your e-commerce provider about these “alternate” payment options.
Let’s face it. There are a lot of changes to keep up with. Good e-commerce providers are engaged at every level with the changes to regulations and legal minefields. They follow compliance or statuary changes and maintain the close relationships with card associations, banks, and industry watchdog groups so you don’t have to. However, it is worth asking now and again if there are upcoming changes that could impact your business. SEPA is a major banking initiative that you will want to be ready for, after all.
THE ROAD AHEAD
In short, everything changes. We’ve all seen how consumer purchase behaviors have evolved. We’ve seen the rise of non-credit card payment types. We’ve seen the card association implement guidelines over the years. We’ve even seen some independent agencies create regulations with the support of political bodies. And the one thing we all can count on? Things will continue to change! In this continually evolving environment, it’s important to work with your e-commerce provider so you can stay ahead of things. Or, at the very least, to keep up-to-date with changes so your business can remain compliant and you can reach all of the consumers in all of the markets, offering the payment methods they want to use.
Gary Jackson, who heads up sales at CCBill and Cavecreek as managing vice president of sales and Internet markets, brings 16 years of experience in the online media and commerce markets to the adult industry, having built from scratch four successful sales organizations for a number of software and ISP start-ups. Since joining CCBill in 2006, he has been a champion for new market segments, notably the gay market, and has been passionate in finding new ways to drive revenue for commerce sites in the online adult industry for merchants and their affiliates alike.