Today's Top Market Trends In Payment Processing
There are numerous options available today for the billing of online adult entertainment customers — from tried and true credit and direct debit solutions, including MasterCard and Visa, to online checks (ACH), and more, to a growing range of alternative payment mechanisms, including one of the most controversial and potentially game-changing choices in 2015 — cryptocurrencies such as Bitcoin (BTC).
XBIZ World recently asked some of today’s top online billing experts about the current market trends in the arena. Here’s what they had to say.
Mobius Payments’ CEO Mia Hyun told XBIZ that today’s global adult entertainment market definitely benefits from using alternative billing methods such as ACH and direct debit.
“Worldwide, online checks have seen some growth and many view this method of payments as secure and cost effective,” Hyun said. “We have seen growth in the adoption of Bitcoin as well, which has been fairly interesting, as both online checks and Bitcoin are used for one-time payments.”
Mobius Payments offers a fully secure end-to-end global payment solution supporting all major credit cards, in 36 currencies, and also supports a wide variety of integrated shopping carts, ACH processing and more, illustrating the range of options needed to service customers today.
Hyun said that technology allows merchants to conduct business globally and to leverage the best service partners.
“More and more companies today are global. Buying and selling services internationally has opened the doors to increased profits and has leveled the playing field,” Hyun said. “We experienced amazing growth from entering the E.U. payments market during the past five years. We acquired key knowledge, as we are informed of domestic and foreign strategies pertaining to payments, and ultimately this has strengthened our position for serving clients globally.”
The global nature of the adult marketplace means wide ranging opportunities, but one size doesn’t fit all when it comes to paying for products online — with different currencies, languages, payment methods, and a need to cater to local audiences, all needing consideration.
For example, SegPay CEO Cathy Beardsley said that local card options, direct debit and bank transfers still seem to be the best alternative payment options for the adult market.
“E-wallets have grown quickly in the mainstream market but they have not taken off in the adult space,” Beardsley told XBIZ. “PayPal is dipping its feet in the water with its relationship with Epoch, but outside of PayPal, I have not seen any traction from other wallet providers.”
NETbilling CEO Mitch Farber succinctly identified several key adult market trends in alternative billing, but notes that nothing beats standard billing types — especially in the lucrative American market.“Phone carrier billing is not a viable solution in the U.S. for adult companies and is very expensive elsewhere in the world [and] Bitcoin is unstable,” Farber told XBIZ. “Credit card and debit card billing are by far the kings of online payments.”
“Alternatively, ACH payments, which is equivalent to online check processing, allows U.S. merchants to accept transactions from a customer’s checking account,” Farber explains. “This is a great alternative to those who do not have a credit or debit card. However, because there is no real-time authorization for online checks, it is riskier for a merchant to accept ACH.”
Farber suggests that when shipping products or for higher ticket items, merchants wait the time it takes for the check to actually clear before delivering the items. If this is not an option, such as when billing for live cam shows, or for other riskier or higher priced items, NETbilling’s new MMS verification feature can help to validate customers using ACH to make their payments.
“The biggest notable trend in billing is no secret,” Epoch spokesman Rand Pate said. “Mobile is the new black.”
Pate said that any site that isn’t optimized for mobile devices is already at a significant disadvantage. “While the sales percentages swing to favoring mobile, and sales remain consistent, there are challenges in the mobile market that must be addressed to have optimal through-put,” Pate explained. “It is, after all, a little more challenging to enter payment details on a mobile device.”
To increase efficiency and streamline this process, Pate notes that e-wallets seem to have a bright future — with total e-wallet transactions in the U.S. already approaching 20 percent of online sales.
“While it’s too early to call Google-wallet or other alternative solutions a trend, all the big players are presenting their own payment solutions to address the ever-growing market of mobile,” Pate told XBIZ. “V.me is Visa’s solution to receive payments and simplify the checkout experience for your customers while MasterPass is MasterCard’s similar solution.”
It is all part of the growing range of online payment options, each of which targets a specific audience, typically segregated by language and location. For example, Epoch offers its LogoGPS technology, which uses geo-targeting to display the top local payment options to each consumer, increasing the chances of making a sale. Epoch accepts more than 40 different payment types and automatically converts 62 currencies. Its system automatically detects language preference and translates 17 different languages, instantly, and without any decisions from customers, for the most frictionless checkout process possible.
According to Payze.com CEO Doug Wicks, what his company brings to the table is experience and trust, with a team that includes himself and Joel Paulin, who together have a combined 20 years of experience at global ecommerce solution CCBill, as integral parts of the development, design and success of that brand; plus Hank Freeman, who ran the world’s largest AVS system, along with a massive domain portfolio and many websites.
“The combination of these three key figures has created a truly unique billing platform from people that completely understand billing,” Wicks told XBIZ. “Add in the fact that other members of the team also have the same billing and industry background and years of experience, [and it creates one of] the most knowledgeable and trusted groups in the industry.”
As a newer entrant into the online billing space, Payze combines proven techniques with fresh options, including a unique integration with the NATS affiliate and traffic tracking platform to give clients a more robust billing solution and in-house programming staff to ensure flexibility for clients by constantly adding custom features, rather than forcing clients to use outdated technology. The company also offers robust bank relationships for placing clients worldwide, and a close working relationship with all clients.
“The greatest issue affecting adult merchants in the coming year is the ability to quickly change and adapt current billing techniques to suit the young and growing marketplace,” Wicks explained. “The ability to push current sites into the growing mobile/smartphone environment will be of upmost importance [as will be] the ability to take control of the type of billing options needed to suit this market, such as one-click purchasing, upgrades to memberships, downgrades to memberships, ability to control fraud scrubbing, cross selling other sites and so much more.”
Wicks said that in 2016, Payze plans to launch a new PSP at lower rates than what is offered today.
“Now is the time to be looking closely at the cost and offering of all the providers,” Wicks said. “Payze.com believes that there is no reason any client should be paying a 15 percent fee for merchant transactions. We believe that it really Payze to be using Payze.com. Who are you trusting when it comes to your hard earned money?”
One controversial new billing technology is a purely digital one — and while many traditional players in the online billing space discount the use of cryptocurrencies such as Bitcoin, a bold new generation of companies is taking a proactive stance towards its adoption as an anonymous and secure solution for purchasing porn and other “personal” material on the Internet.
Edward of Titcoin Digital Currency told XBIZ that while some of the Bitcoin buzz has subsided, the good news is that the price has been stable for the past six months, benefiting both merchants and businesses — with Bitcoin now maturing to be more favorable for transactions.
“Price volatility only benefits investors and day-traders who try to capitalize on price differences which is what happened last year,” Edward explained. “Merchants require stable prices to ensure the payments they receive will be valued the same when they ‘cash out’ and convert into fiat money.”
Edward said that there’s a bigger long-term vision that many in the Bitcoin industry fail to realize and that the future of money has little to do with what type of currency you have (U.S. dollars, Bitcoin, etc.), but the ease at which you can convert, exchange and spend the valuable assets you have. He envisions a financial future where multi-currency banks allow clients to deposit any digital asset; including dollars, Bitcoins, airline and other retail rewards, such as Starbucks Points, etc.; converting and transferring one asset to another in a seamless process; and notes there are several startups looking to develop this type of platform, including Casheer.net and PayServices.com.
Despite this multicurrency future, Edward said that credit cards remain a merchants’ best friend, since they enable consumers to spend beyond their current financial means and allow merchants to set up a recurring payment system to essentially lock in consumers for the long term, offering big advantages for merchants; but relying on credit cards for online billing isn’t perfect, however, making room for Bitcoin.
“I don’t recall the exact numbers, but approximately 30 percent of Americans don’t own a credit card. Plus, a recent study shows that about 60 percent of Millennials (20-30 year old users) don’t own a credit card, which will be your future consumer base,” Edward concludes, adding, “That’s why it makes sense to offer a debt-based payment option in addition to credit cards to increase your potential audience.”
While the adult entertainment industry has been slow to adopt Bitcoin and other cryptocurrencies, substantial interest remains in what may simply be a technology whose time is yet to come.