Billing Trends Developing as Merchants Seek Alternatives

Joe D

We’ve been writing about local global payments for years, and it is still amazing how many informed successful sites and programs have not taken the time or made the technical investment to add options to cover accessing every possible join. Do you know your individual conversion rates by country? If you have international traffic, do you offer multiple non-card payment options preferably in local currency to convert them? You are likely well aware of the importance, but many have just not yet gotten to it.

As we move through 2013 I see three trends developing as merchants consider alternative payment options. I predict the most advanced merchants will begin adding every possible payment option available. I predict that merchants will begin to diversify their processors as well as their processing methods in order to ensure a broad stable foundation where a platform is dominated by the diversity of providers as well as the diversity of options — this will come with a special emphasis on mobile join options. I predict that merchants will beef up their collection and analysis of user geographic and demographic information and begin to make long range decisions based on real analytical customer data. Will you be an advanced merchant in the coming year?

If you view your billing platform as a profit center beyond the generation of gross revenue, you can tweak and adjust to increase your ROI on that payment platform to generate the most profit for your program.

What does all this mean in terms of gross processed revenue gains? Talk to anyone in alternative payments, and you’ll hear anywhere from 5 percent to 20 percent, and you know what? It’s true. My wise friend Melody Wigdahl at has always joked about the concept of ‘alternative’ payments — she’s known to say, “They are not an alternative, they’re a necessity!” For every merchant online, it helps to offer as wide a selection of join options as possible to provide your users multiple methods for completing their transactions. Based on her research, she estimates that every single additional payment method offered by a merchant can increase conversions as much as 15 percent.

Those are significant numbers, and worth a few hours of your tech team’s time. Pay particular attention to the payment industry innovators who are providing real new options. For example, Mitch Farber at NETbilling has recently introduced swipe terminals for their merchants, and my company Netcash has recently introduced the XBIZ Award nominated alternative DeclineCash©, a last resort cash payment cascade option for declined credit cards. I expect to see the launch of many new payment products, as well as new ways to combine different options to reach the ultimate outcome — a successful transaction.

Gambling and gaming companies, with their universal global appeal, have long seen the value in attempting to provide a familiar payment method for every single user who lands on a site and may wish to purchase — no exception. If you think about it, those users arriving on your sites from countries we don’t often consider in our planning are likely the higher educated population within those countries with the most discretionary income to expend on online pursuits. If they are comfortable on your site and you offer a payment method they recognize, they will likely purchase. It may not be an instant purchase depending on their region and available options, as they may have to prepare to make the purchase by creating a payment account, joining a payment community, or sending digital cash, but if your site and content are really compelling, you will definitely go on their list of ‘friendly’ sites for a future if not determined immediate purchase.

I believe the biggest trend we will see heading through 2013 will be the continued utilization of the multiple processor payment platforms like gaming and games, where you can often find over 80 different payment methods provided by as many as 60 individual billing companies, all ensuring that anyone who surfs the site can ultimately find a way to pay. Again, included in this trend will be adding every possible mobile option that can be found.

If you’ve been processing high-risk joins for any length of time you know that dealing with regulations and stable billing platforms is a never-ending roller coaster. You might say it’s cyclical, as we see an ongoing repetition of periods of crackdown and enforcement governed by prevailing practices or abuses, but there is no pattern to the cycles. The key here though is to recognize that your processing platform is always at risk, and therefore so is your business; a situation largely unique to the adult entertainment industry — billing should never be something you put up and let run on auto-pilot. With the advent of the new ‘Know Your Customer’ requirements and regulations to restrict the financial avenues for terrorism combined with broad new limitations by MasterCard, compliance updates are imperative. Screening, scanning and fines are inevitable. Be proactive in this area as well, and protect your ability to continue billing users — if your processor comes to you with requests to remove, change or update text, content or practices, don’t resist or fight them — this is the new normal, and if your processor has not come to you with these requests, they are doing you no favors in the long-term.

If you view your billing platform as a profit center beyond the generation of gross revenue, you can tweak and adjust to increase your ROI on that payment platform to generate the most profit for your program. The prevailing mindset has been one of ‘if it ain’t broke, don’t fix it’ — but with everything going on in the world today and the breadth of opportunity in the billing arena, it’s billing options — and that does not necessarily mean going out to acquire your own merchant accounts although that’s an option. There are so many ways to combine third-party billers now to exact more complete worldwide coverage and increased turnover. Sure, there will be some overlap, but that just means fewer people will get away; the real challenge is choosing the combination of payment options, refining the navigation and testing throughout the join process.

Another simple yet often overlooked facet of your billing center, is your true effective rate. Do you really know your effective processing rate at the end of the day? Some processors now include fees and charges in the rate, so check your contracts and compare — ask more questions. It’s easy to perform A/B testing and you may find you can pick up 1-5 percent just by taking a look at the true cost of your processing and adjusting traffic flows. Don’t take anyone down, you want to have a redundant platform, but investigate your true costs and utilize multiple billers to maximize your billing center profits.

You can be as involved in your analytics as you want to be — and if statistics was not your favorite college course, there are plenty of reasonable industry consultants versed in all aspects of adult traffic and conversion who can help you build and test analytical structures that can help you make more informed decisions. A recent example I came upon was in a WorldPay global research project where respondents were asked at what time of day they were most likely to be purchasing online. Results showed:

  • 12 a.m.-6 a.m. — 10 percent
  • 6 a.m.-12 p.m. — 16 percent
  • 12 p.m.-6 p.m. — 30 percent
  • 6 p.m.-12 a.m. — 44 percent

… and the global online peak is 8:45 pm. If you are engaged in behavioral marketing, launching new campaigns, sending daily deals or announcing special sales or incentives, this information may have you planning your marketing efforts around peak usage, and determining this data for your own personal sites will allow you to concentrate your efforts on the peaks, or maybe on devising ways to encourage usage at other times.

My goal has always been to help merchants generate the most revenue possible from their efforts — that’s my goal and my record. One aspect I’ve been watching over the years is the inclination of some processors to tell existing and prospective merchants that they are ‘covered for everything.’ Investigate this claim. If, for instance, you cannot surf your Netherlands payment page as a Dutchman, ask your processor for a screenshot of this page. You might be surprised to find that perhaps you only offer the Dutch market the possibility of a VISA or MasterCard join option when you thought you also offered non-card alternatives. For the entire country, you may be paying a credit card processing fee much higher than necessary. Make your 2013 watch-word redundancy, combine billers for your best results.

Vow to make this the year you spend some serious time analyzing your billing profit center. Choose your processors based on their specialties and combine them to afford you the most universal transaction coverage, enjoy the overlap, compare and contrast rates, and test, test, test.

JoeD is the chief marketing officer at, offering secure, discreet, convenient billing for your sites, and the DeclineCash cascade option to combat declined credit cards. Joe is a go-to source for insight and access into industry markets, appropriate payments and all things ecommerce.