Critical Processing: Mobile Billing Offers Low-friction, High-impulse Sales

Alex Henderson

In the ever-evolving adult entertainment industry, being open to change is not only important — it’s downright crucial. And that includes changes in adult billing. Credit card billing continues to be the dominant payment method for online adult entertainment in the U.S., but a successful adult entertainment company is likely to have many customers who don’t live in the U.S. and prefer other payment methods. One of them is mobile billing, and trends in the mobile billing sector are something that adult companies need to stay on top of.

“The most significant difference between U.S. mobile adult traffic and the European or Australian markets is that these markets allow direct carrier billing, while the U.S. market bills mainly through credit card processing,” explained Judy Shalom, senior sales manager for Affil4You.com. “Direct carrier billing makes it much easier to bill a customer, resulting in much higher conversion ratios as well as allowing you to target content and advertising, which will improve your product offering.”

In the U.S. — where credit card-centric thinking is still common — some adult webmasters might continue to have reservations about mobile billing.

In 2013, Europe is still the part of the world where mobile adult billing enjoys its greatest popularity. Shalom observed: “Europe is definitely the most receptive to mobile adult billing, but we have to keep in mind that we cannot just compare the European continent as a whole to the U.S., since Europe consists of many different countries — each with its own legislations and regulations. Though most of the countries work together to a certain degree in their legislation, there are still several differences that make mobile adult billing difficult. Take for example, Iceland, who wants to ban adult entirely, offline and online. While Germany and France, for instance, added obligatory age verification systems, other countries do nothing of the sort. On top of all these regulations per country, there are also the regulations that the individual carriers enforce, in order to even allow mobile adult billing.”

Europe isn’t the only part of the world where mobile billing is being used to pay for adult entertainment. Australia is another place where mobile billing is an adult payment option. Andy Wullmer, CEO of the Bremen, Germany-based adult mobile affiliate program SexGoesMobile.com, noted: “Europe is still the most evolved in terms of mobile billing, but other regions are catching up fast. Australia has become the most recent country to start offering direct carrier billing, though this is still a work in progress and is not yet offered across every operator. We are seeing a group of Asian countries starting to make progress towards also adopting these billing flows.”

Like other adult payment methods, mobile billing has not been stagnant. Shalom explained: “Mobile billing has evolved from pay-by-SMS billing to WAP, direct mobile billing and even NFC. While NFC isn’t something that will be usable in the online mobile adult billing, the payment solutions being offered for mobile billing will be made easier and easier with time. The mobile customers will expect the same capabilities they have in online banking and will want their mobile devices to act the same way, effectively making the demand drive the market. Also, alternative payment methods such as Bitcoin or other e-wallet solutions are already trying to get a foothold in the billing market, but still need to prove themselves before the consumer trust will actually allow them to become an intricate part of mobile adult billing.”

Although feature phones are still widely used in 2013, smartphone penetration continues to grow in many parts of the world — and adult companies, Wullmer said, should recognize developing countries as growth markets for mobile billing. “The speed with which smartphones are being adopted globally shows no sign of stopping,” Wullmer asserted. “Perhaps the most surprising to most uninformed observers is the growth of smartphones in emerging and developing economies. In these markets, where a stable electricity supply may be a rarity, fixed-line Internet is never going to happen; this, combined with the price of a computer, can be prohibitive barriers to entry for most people in these markets. A smartphone, however, is achievable and practical. Because of this, the rate of adoption and share of mobile Internet traffic in these regions is truly phenomenal.”

In the U.S. — where credit card-centric thinking is still common — some adult webmasters might continue to have reservations about mobile billing. But Shalom said that mobile billing is something to be embraced, not feared. “Possible misconceptions include (the belief) that a mobile device on Wi-Fi cannot be billed, which is not correct since even if a user is coming from Wi-Fi, there are ways to convert that user by pushing him to purchase a product using credit card or SMS billing,” Shalom pointed out. “Other misconceptions include people thinking that mobile billing is extremely expensive. But when executed properly, mobile billing can offer the same positive margins with very little cannibalization of other payment solutions that people are more used to.”

Wullmer said that because adult entertainment is still an impulse purchase, mobile billing can make it easier to close the deal in the countries where it is available. “If you don’t have a mobile billing strategy, you are leaving money on the table,” Wullmer asserted. “Several programs will spend fortunes for small percentage point growth, yet they don’t have a coherent mobile billing strategy that could offer them double-digit sales growth overnight. Mobile sales and adult sales are high-impulse; mobile adult sales are therefore ultra-high- impulse. Entering a 20-digit card number and the other required info on a small touchscreen device is the opposite of that. There are about 40-80 characters of data that you need to enter and hope that your autocorrect doesn’t mess up; so the chance of an error and a failed payment is very high. Let me ask you: when was the last time you sent a tweet or an SMS without at least one typo, even if you corrected it after? Mobile billing offers low-friction, high-impulse sales that you are just not getting at the moment, period.”