opinion

Micro-Payments May Swing Into Action

Alex Henderson

As technology and content continue to evolve in the adult entertainment industry, so does adult billing. And in 2014, mobile growth, micro-payments and online security measures are among the adult billing trends to watch out for.

Harmik Gharapetian, vice president of sales and marketing for Epoch, said that ongoing growth in the mobile sector was among the most important adult trends of 2013 and will continue be a major adult trend in 2014. “We evaluate traffic constantly using very sophisticated algorithms to interpret trends and make forecasts and adjustments to our billing protocols,” Gharapetian explained. “But no one needs to do much evaluation to realize that the biggest change in 2013 will certainly continue into 2014: as is reflected in every sector, people are leaving their desktops behind in favor of mobile devices. The percentage of sales from mobile devices is growing steadily, and this trend will undoubtedly continue.”

Changes can come swiftly on the Internet, and Jackson said that the adult companies that stay on top of changes in 2014 will be more likely to come out ahead. -Gary Jackson, CCBill

Cathy Beardsley, president and CEO of SegPay, predicted that “mobile and micro payments will be important for 2014” and added: “Making our checkout an easy process for mobile devices and tablets will continue to be important. There is still no easy way for U.S. consumers to charge adult content to your phone bill. So making it as easy as possible to check out on a small device with a credit card will be important.”

Over the years, many adult webmasters have made a fortune with membership websites and recurring payments. But Beardsley stressed that consumers who prefer micropayments are an important and growing market. “We are also seeing more and more requests for micro-payments or the ability for consumers to purchase snippets of content or small amounts of content,” Beardsley observed. “The challenge is how do we handle those types of transactions through the credit card network cost-effectively.”

Gharapetian is also quite bullish on adult micro-payments, pointing out that many consumers of niche erotica and patrons of live webcam sites prefer them. “One-time transactions already account for a strong market share with live entertainment sites,” Gharapetian noted. “And for subscription sites, simply having a non-recurring option may mean the difference between making a sale or losing the customer. But that’s not the only reason to have a one-time billing option. Many local payment types throughout the world work differently than traditional debit and credit cards and are not well-suited for recurring billing. Simply having a one-time billing option can help you reach customers you might not have been able to acquire otherwise.”

Gary Jackson, managing vice president of sales and Internet markets for CCBill, said that in 2014, adult companies that are billing in Europe will need to keep a close eye on developments with the Single Euro Payments Area (SEPA). Presently, 33 different countries are participating in SEPA, and many of them are valuable markets for adult content.

‘With the implementation of SEPA for the European Union, the use of a single banking format will open up many new buyers to the online adult market,” Jackson predicted. “Several payment providers have launched this, but there is always a consumer learning curve with any new payment option. We expect to see the adoption of this new banking option to ramp up in later 2014 if the payment providers make it easy to use.”

According to Jackson, online security will be a prominent topic of discussion in the adult billing space in 2014. “I see security and privacy becoming much more of a concern for buyers,” Jackson said. “With what is going on in Germany with consumer information, data breaches with some of the mainstream businesses in the U.S., the interest in Bitcoin and more and more data tracking on the Web, I see not only the credit card privacy being a bigger component in the buying process, but tracking of their experience as well.”

Changes can come swiftly on the Internet, and Jackson said that the adult companies that stay on top of changes in 2014 will be more likely to come out ahead. “I think one of the billing trends for 2014 is being ready to adapt,” Jackson asserted. “It may sound like it makes little difference to billing, but as we saw with the ATVOD regulations, MasterCard’s recent move to a new payment model, or the rumblings across a series of countries to outlaw adult content, it can impact the ability to accept payments. I believe that a business needs to be aware and ready for change to that key aspect of the business: taking in the money. Or one needs to at least have their billing partner keep an eye out for changes. As they say, luck favors the prepared.”

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