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Billing's New Frontier

Billing's New Frontier

November 27, 2003
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" SMS allows text messaging from a mobile phone, and is currently used by approximately 280 million Europeans who receive streaming videos and messages. "

The Billing Update at GFY's Webmaster Access this past weekend was one of the best-attended seminars of the event and featured panelists such as Mitch Blatt from NoCreditcards.com, Holly Moss from Electracash, Shawn Tooley from Adult Dialer, Mitch Faber from Netbilling, and moderator Clay Andrews of Epoch Systems.

After a brief overview of their companies, Clay Andrews opened the floor to questions. The main industry concern centered on the new Visa chargeback threshold limit, which was changed from 2.5 percent to 1 percent in early October; and as a result, new methods have developed within the adult entertainment industry to minimize chargebacks.

Panelists suggested various ways to lower the chargeback ratios, such as adding the CVV2 code to join forms, watching affiliate traffic more closely, and placing a special emphasis on improving customer service.

The overall sentiment among the panelists was that efficient 24/7 customer service access provides customers with timely assistance on a myriad of situations and problems, and ultimately prevents increases in chargebacks.

Also mentioned among panelists was Verified by Visa, a fraud prevention service provided by Visa that is used to help verify a card processing transaction.

Mitch of NoCreditcards.com introduced the concept behind a leading edge billing system called SMS Messaging (Short Message Service). SMS allows text messaging from a mobile phone, and is currently used by approximately 280 million Europeans who receive streaming videos and messages.

In the U.S., this service could potentially appeal to customers who don't want to pay monthly service fees, as billing is on a "per-message" basis. Currently, fees in Europe vary depending on the country and service provider, but run typically under two dollars each.

Another point of interest were payment alternatives. Holly of Electracash, who specializes in this field, presented check processing as an alternative to credit cards, especially for U.S. clients whose credit cards have been declined. This method of payment can be used for shippable products.

Mitch of Netbilling said that webmasters, instead of maintaining a third party merchant account, should open and use their own merchant account as a means to reduce costs and chargebacks. This type of billing strategy would give webmasters more control over transactions and allow them to perform their own maintenance, fraud scrubbing (i.e. blocking countries), and collection of credit card information.

Concern was raised about debit cards becoming the new standard of payment processing. Clay of Epoch Systems replied that ePassporte, and other virtual cards would provide a greater range of options to customers, especially for those without access to credit cards.

This seminar touched on a host of points that are very pertinent to the industry, and several possibilities were raised to increase profitability and reduce loss. It created lots of food for thought. Alternative billing may very well be the way of the future as it opens to wider markets.


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