opinion

Euro Charge - Preferences Vary Country To Country

Alex Henderson

The online adult entertainment sector has evolved considerably along the way, but one thing about online adult entertainment hasn’t changed: Europe continues to be a major consumer of adult websites. And for adult webmasters, success in that market not only means having quality sites, it also means understanding the online billing preferences of European consumers, which can differ considerably from the online billing preferences of their U.S. counterparts.

In Europe, most online purchases are not being with credit cards — and billing for adult websites might include anything from direct debiting of bank accounts to debit cards to mobile phone payments to pre-paid e-wallets. Cathy Beardsley, president/CEO of SegPay, explained: “For online payments, credit cards dominate the U.S. market. In Europe, things are different. There are more online payment options that are readily accepted. Consumers in Europe want to be able to use their preferred payment method like debit accounts, local cards, smart cards and in some countries, cash on delivery.”

Webmasters who want to reach European consumers need to localize their websites as much as possible — and that means not only offering the payment methods they prefer, but also, billing them in their own currencies and languages.

Online billing in Europe is far from monolithic, and payment methods can vary from one European country to another. In France, Carte Bleue (a debit card) remains popular. In the Netherlands, many online payments are made with iDEAL, which Beardsley describes as “a local debit solution that allows consumers to pay for Internet purchases directly from their bank account.” Debit solutions are also popular in Italy, Spain and Portugal.

In Germany, the largest economy in Europe, direct debiting is the top online payment method; phone payments are also an option in that country. Daniela Ganick, former senior account manager for iTelebill and a recent addition to the sales team at Webbilling BV, observed: “In Germany and Austria, you rarely have people with credit cards — less than 20 percent, and a lot of them are company credit cards. However, everyone has a bank account, and pretty much everyone pays for memberships, services and goods with direct debit or online banking transfer. This means a user on a website who wants to sign up for a monthly membership will enter his bank details and be charged by direct debit every month until he cancels.

The main reason for everyone using this is that all debit cards in Germany are EC/Maestro cards, which cannot be used for online shopping. So for Germany, the most used online billing methods will be direct debit and online banking transfer as well as payments by phone.”

Harmik Gharapetian, vice president of sales and marketing for Epoch, said that while American webmasters should offer credit card billing to European consumers who have credit cards, they should also be aware that credit can be difficult to obtain overseas. “Although a lot of Europeans still have credit cards and use them, it is much harder to get a credit card in Europe than it is in U.S.,” Gharapetian said. “So we have added the most prevalent and most often used forms of payments for each country to assist our clients (in capturing a) larger portion of the market in those countries.”

Beardsley emphasized that webmasters who want to reach European consumers need to localize their websites as much as possible — and that means not only offering the payment methods they prefer, but also, billing them in their own currencies and languages. “If a consumer is buying something online and the price is not presented in their native currency, there can be confusion about what is being purchased and what it costs,” Beardsley noted. “Buyer’s remorse is everyone’s enemy because it stifles repeat business. It is better to stick with local currency so everyone is on the same page.”

Gary Jackson, managing vice president of sales for CCBill, said that even though the euro has given a long list of European countries a mutual currency, webmasters need to treat those countries as separate countries and not as one big country. “The euro in concept is fantastic,” Jackson explained, “but it really has only become a common ‘path’ or ‘thread,’ while the people—the consumers— remain diverse and separate. We see success from merchants who choose to deal with the consumers by country individually and simply allow the currency to be a common underpinning of the purchase process.”

Much has been written about the economic crisis in parts of Europe (especially in the socalled “PIIGS” countries: Portugal, Italy, Ireland, Greece and Spain) and the impact it could ultimately have on the euro. Some economists have expressed pessimism about the future of the euro, while others are confident that the euro will weather the current storm that the “PIIGS” countries are facing. Asked to comment on that crisis and its possible implications for online billing, Ganick responded: “This is a very difficult one. Obviously with the economic problems in those countries, you will have declines in sales, as money is tight. However, there is no way of knowing at this stage how the euro situation will develop. If the euro should be dropped at some point in the future, then everyone obviously will need to switch back to local currencies — and for non-European websites, this will mean a lot of new information on currencies, payment methods and exchange rates, while at the moment, the euro has the same value everywhere. Personally, I don’t think this is going to happen any time in the next few years.”

And Beardsley commented: “The crisis has only had a small effect on online billing. Consumer spending has lagged in countries that are struggling financially, so there are fewer purchases being made. If I were looking to enter a new country, I would keep an eye on politics—not just the country’s regulations and currency. There could be some big moves in the future for the euro. We’ll just have to stay tuned.”

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