E-Billing 2016: Trends in Mobile Billing
With the lion’s share of Internet use now initiated through mobile devices, it is vital for merchants to ensure that their online presence — including join pages, shopping carts and the full checkout process — are not only mobile-compatible, but mobile-friendly.
At the outset, it is important to note that “mobile billing” may mean different things to different people.
For some, it means direct carrier billing, where purchases are charged to the customer’s telephone bill in a manner not unlike hotel guests charging dinner and a few pro shop polo shirts to their room account — except in this case, that mechanism can be a premium service charge, SMS text message and more.
To others, mobile billing involves taking the friction out of credit card usage on mobile devices; while for others still (such as affiliates and media buyers), it means segregating traffic according to carrier, device and access method — where carrier-connected traffic is treated (and billed) differently than customers that are using mobile devices connected to a Wi-Fi hotspot.
While consumers are often shopping via mobile device but then switching over to a desktop to make the actual purchase, being mobile friendly makes it easier for single-device mobile users to enjoy (or at least not be frustrated by) the purchase process, and provides a positive impression of your company, making mobile friendliness a concern for all online merchants.
For an insider’s look, XBIZ World recently asked adult entertainment’s top payment processors about current market trends that are shaping the mobile billing scene in 2016.
OrbitalPay Vice President Karen Campbell told XBIZ that like it or not, today’s world revolves around obtaining immediate results, anytime, anywhere — and where for the most part, anything you need to know, or want to purchase, is right at your fingertips.
“The adult industry is no different — mobile devices are a major part of what we do,” Campbell explains. “Processors have to keep up by providing faster transaction time, streamline mobile applications for the payment pages, and the ability to process one-click sales, just to name a few.”
Being able to process transactions on mobile devices using mobile-specific payment mechanisms, while a seemingly obvious need, is not always the most profitable route for merchants to take, however; thus it behooves merchants to pick and choose payment methods that make the most from each customer.
“True mobile billing, where customers purchase content using their wireless carrier bill, is problematic and costly, but may have advantages in some locations,” notes Epoch Vice President Harmik Gharapetian. “It is not preferable to credit card payments, however, and should only be considered for those specific scenarios where more reliable and cost-effective options are not available.”
One company currently offering direct carrier billing for many countries is DIMOCO, which was recently granted a special payment service license by the Austrian Financial Market Authority (FMA) to operate a regulated payment institute in the E.U. — a big step in expanding its mobile billing options.
“Compliance with the requirements of the Payment Services Directive and respective national regulations builds the most appropriate step forward on sustainable expansions for mobile operator payments in the digital sector,” DIMOCO CEO Gerald Tauchner explains. “DIMOCO has now made a formal passport notification, which enables the payment institute to operate its payment business in all E.U.- and EEA-member countries.”
As an example of the company’s constant evolution, over the past year, DIMOCO also acquired French company Mpulse E.U.R.L., and Greek carrier billing and mobile messaging company Amaze; expanded into Finland and Hungary; and released a number of special market reports covering carrier billing in France, Germany, Spain, as well as on marketing adult content and online dating services in Europe, helping to cement its role as an industry leader.
Other firms supply mobile billing services to adult merchants, and each has its own areas of expertise.
According to the company, DialXS supplies a broad range of alternative payment solutions, including mobile-friendly adult Premium Rate Services (PRS) that are either billed per minute, per call, or both; along with Short Messaging Service (SMS) payments where the customer sends a premium text message following simple instructions on a merchant’s website and is sent one (or more) premium texts in return.
These texts could be the content itself (i.e. “sexting” with a service provider), or a paysite’s password.
This SMS billing service supports both one-time access to digital content or services, as well as recurring subscriptions, making it an intriguing part of a globalized payment processing plan that bills consumers in their preferred currency, language and payment mechanism — wherever they are located.
Rather than taking a scattered approach, knowing each audience’s preferences ahead of time will help merchants and marketers present the most appropriate and profitable offers. For example, among the best markets for mobile billing today are Africa, Asia, Latin America, and the Middle East — forming a data point of interest to affiliates and media buyers as well as for merchants.
“While credit card penetration will continue to grow in these areas,” says SegPay CEO Cathy Beardsley, “I see greater growth coming from mobile billing options that will capture these emerging markets.”
As a result, Beardsley advises adult merchants to focus on diversity when selecting payment options, especially when catering to consumers outside of the U.S., where mobile billing may be the best option for tapping into markets that do not rely on credit card processing for payments — but this may not be as easy (or as profitable) as it seems.
Calling mobile billing today “a frustrated hope,” Vendo Managing Director Thierry Arrondo says that a lot of things will have to change to make carrier-based mobile billing a viable payment option.
“Greedy operators that charge up to 50 percent in processing fees, marketing implementations far from meeting the most basic consumer rights (read the FTC rules and U.K. Fair Trading rules and take a look at what is happening with carrier billing), and, unfortunately, consumers being abused,” Arrondo lists a litany of problems facing adult merchants employing mobile billing, but remains confident in its promise, noting that with “All this said, we believe that there is still hope.”
On the notion of whether or not traditional adult billing companies will develop better billing options for mobile device users, “hope” is all there seems to be on the near-term horizon — at least domestically — with NETbilling President Mitch Farber telling XBIZ that because of carrier restrictions in the U.S. and the prohibitively expensive cost of “phone billing” in general, many merchants simply do not use it.
SegPay, for one, would like to change that.
“I see mobile payments [work] in markets that do not rely on traditional credit or debit card processing,” Beardsley explains. “So it is in the best interest of traditional payment companies to partner with mobile billing providers to offer these services as part of their own payment solutions.”
“SegPay also has a payment option in the works that will help simplify the mobile checkout process,” Beardsley adds, pointing the way to the company’s future innovations and commitment to mobile tech.
Despite the forceful advance of mobile commerce, there is still a long way to go in serving mobile users with opportunity on the table for merchants and service providers, and an easier future for consumers — but simply having more billing options is not really a replacement for having better billing options — not at least if a tangible boost to the merchant’s bottom line is expected.
“[The mobile market] still needs to mature and find its place,” Arrondo concludes, noting that “Payment methods are a commodity today that do not represent a competitive advantage on their own.”