Prepaid Cards Are Still an Appealing Alternative Option
Although the almighty credit card continues to dominate adult billing in the United States in the final quarter of 2014, millions of adult transactions are occurring all over the world with other billing methods. One of them is prepaid or preloaded cards. Prepaid cards have enjoyed their greatest popularity in the U.S., although they are also being used for adult billing in other parts of the world (from Europe to Latin America to Australia). And users of prepaid cards continue to appreciate the anonymity that they offer.
Cathy Beardsley, president and CEO of SegPay, predicted that the U.S. will continue to be the top user of prepaid cards in 2015 but is expecting growth in other countries as well.
“Prepaid cards tend to be a more U.S.-centric form of payment,” Beardsley explained. “A recent white paper written by MasterCard predicts prepaid cards to grow at a rate of 22 percent per year. By 2017, approximately 51 percent of the prepaid users will come from the U.S., and the remainder will come primarily from emerging markets such as Brazil, Mexico, Italy, UK/Ireland, India, Canada and Russia.”
Beardsley continued: “U.S. prepaid cards have a hard time getting approved through our EU acquirers or used for cross-border transactions. We have yet to be able to find out why, but SegPay recommends to any merchant that has a significant amount of U.S. prepaid attempts on their site to set up processing in the U.S. to ensure that they are converting this traffic.”
SegPay’s CEO added, however, that prepaid cards can be problematic from a rebilling standpoint. “We have seen the use of prepaid cards increase significantly over the last few years,” Beardsley observed. “It is a great way for consumers to purchase anonymously and securely. Unfortunately, prepaid cards tend to be one-time use cards or have limited value. This can be an issue with for rebilling.”
In the U.S., not all prepaid cards accept adult billing. But alternative billing specialists that are friendly to the high-risk space have successfully marketed their prepaid/preloaded solutions to adult companies. One of those success stories is Paxum, known for its popular e-wallet.
The adult companies that have added a Paxum option have included, among many others, Affil4you, theMobileHub, AdultCentro, the affiliate program PartnerCash.com and the Luxembourg-based LiveJasmin (one of Europe’s top adult webcam platforms).
And alternative billing specialist 2000Charge, which has offices in both Pasadena, Calif., and Germany and has adult clients around the world, offers the PaySafeCard (a prepaid card that is available in thousands of locations in the U.K. and Continental Europe) as well as Qiwi (an e-wallet that is popular in Russia).
Clark Chambers, director of business development for 2000Charge, has said that “anonymity” is one of the main advantages that prepaid cards have as an adult billing method. Users of prepaid cards appreciate that element of privacy, Chambers has said. Chambers has also noted that in the past, many people in the U.S. viewed prepaid cards as primarily a “tool for people with poor credit or less income.” But users of prepaid cards, according to Chambers, don’t necessarily fit that description; some of them might be people who have good credit and see prepaid cards as a “security measure.”
Octav Moise, Paxum’s CEO, commented: “As 2014 turns into 2015, adult business owners should look to expand their active billing options to include alternative and mobile billing in order to create new revenue from existing traffic.”
Mitch Farber, founder and CEO of NETbilling, isn’t especially bullish on the use of prepaid cards in adult billing. “I don’t feel prepaid cards will ever be substantial in the adult space unless for some reason, the card associations ban credit card sales for adult site payments,” Farber asserted.
“However, what has become popular and lucrative for e-tailers is the ability to store value for use later, which in its simplest form, is a token-based system. This has been great for live cam merchants in the adult space.”
Gary Jackson, managing vice president of sales and Internet markets for CCBill, said that convenience will be an important trend in adult billing in 2015 — and that will work to the advantage of companies that offer prepaid billing solutions.
“Easy payment across any site is going to be the gold standard for 2015, in my opinion,” Jackson predicted. “For the consumer to be able to access personal payment info across multiple sites and merchants and devices is going to attract the consumer to the merchant and reduce buyer hesitation. So that option will need to be trusted and secure. We expect to see stored payment options become a big part of 2015, and the winner will be the adult market.”