trends

Payment Processors Holding the Line for Mobile Billing

Payment Processors Holding the Line for Mobile Billing
Stephen Yagielowicz

The mobile internet is a fast-growing and ever-changing landscape.

In 2017, conversion ratios for mobile internet users now eclipse those of desktop users, and the app revolution is poised to further disrupt the marketplace with new content types and user expectations.

We believe smartphone-based payments will have the most gain of any other for the next several years [with] all of the major players in the mobile device industry having delivered their own version of the mobile wallet. -Mitch Farber, NETbilling

It’s a picture of profitability, that would be even rosier if it were not for the current complexity of mobile transaction processing, especially for adult-oriented offers.

Mobile transaction processing can take many forms, ranging from carrier billing that allows customers to buy content and charge it to their wireless phone bill; to adult premium rate services (PRS) that can be billed per minute, per call, or both; to short messaging service (SMS) payments that allow customers to send a text message and receive a premium text in return — such as a password or tokens for a paysite.

SMS, in particular, is worth exploring for certain business models as it supports both one-time access as well as recurring subscriptions, conveniently billed to customers in their own currency, language, and preferred payment platform; although experts agree that these methods are not preferable to credit or debit card payments and should only be offered where those latte options are unavailable or are less desirable — including emerging markets in Africa, Asia, Latin America, and the Middle East.

Unfortunately, despite all of its potential, mobile billing stumbling blocks persist, including exorbitant carrier charges that can eat up to 50 percent of the sale in processing fees, onerous rules — especially within the U.S., and problems with recurring billing on some platforms, which make mobile payments most suitable in markets where traditional credit or debit card processing is not available.

Even where credit or debit cards are a viable mobile billing option, it is vital for merchants and billing processors to reduce the friction in their mobile checkout process by focusing on the user experience during checkout.

XBIZ recently asked some of the top players in adult processing about the latest trends in mobile billing in order to gain these insider’s insights.

NETbilling CEO Mitch Farber told XBIZ that the company continues to focus on web-based payments but is devoting tremendous resources to retail and mobile payments as well.

“We believe smartphone-based payments will have the most gain of any other for the next several years [with] all of the major players in the mobile device industry having delivered their own version of the mobile wallet (e.g. Android Pay, Apple Pay, Samsung Pay),” Farber explains. “Apple alone is reporting a growth of one million new users per week — so this technology will continue to convert users in the coming year at a huge rate.”

Farber notes that smartphone and tablet use has finally exceeded desktop use worldwide, providing ample motivation for merchants to pursue mobile monetization.

“By year’s end, 75 percent of online content consumption will be mobile, media buying agency Zenith forecasted late last year,” Farber says. “While that may be a bit of a stretch, it won’t be too far off over the next few years.”

According to Mobius Payments President Mia Zhu, ease of use is the latest trend in mobile billing.

“Cardholders want an easy checkout experience, similar to what they experience on the desktop version of a website,” Zhu explains. “If the site doesn’t render timely or properly, or the transaction doesn’t go smoothly, the sale may be taken to a competitor!”

Merchants must ensure their join pages, shopping carts, and overall checkout processes are not just simply mobile compatible, but mobile friendly, and optimized for both carrier-connected traffic and customers connected via a Wi-Fi hotspot — billing each according to the most-profitable method.

Mobile consumers also demand immediacy — and this extends especially to online payment processing, where any perceived delay is perceived as a problem — problems that can lead to canceled orders and abandoned shopping carts. This is driving payment processors to continually up their game by boosting the speed of the transaction: from fast-displaying payment pages to one-click sales, up-sales and more.

Another major trend seen by many mobile marketers is the multiplatform consumer who shops via a mobile device and then switches to a desktop computer to finalize the purchase. This transition might be good to encourage for certain audiences as it opens the possibility of more diverse, and more secure, payment options.

Raja from ChargebackHelp told XBIZ the company is working on more mobile-friendly join pages that are easier and safer to enter billing information into.

“We’re also considering ways to integrate mobile wallets,” Raja added, “but we’ll have to see how the fintech industry addresses fraud on this platform first.”

Gary Jackson, managing vice president of sales at CCBill, told XBIZ that the single-biggest opportunity in mobile is in the Omni channel user experience — but it remains the biggest hurdle for the adult business to catch up with.

“Providing a single provider purchase, upgrade or cross sale checkout combined with simple single source support is what consumers are looking for now — and while Apple Pay and Android Pay are serving the individual brick-and-mortar stores, they don’t connect a segment, let alone digital content. Nor do they do much on the traditional desktop,” Jackson explained. “The provider who can provide a uniform and cohesive consumer payment experience will reach more consumers — meaning more sales and longer retention.”

While the meteoric growth of the mobile internet has been well documented over the past few years, mobile billing technology has arguably failed to keep pace — but what some see as stagnation can also be seen as stability — and this might be the most important factor in any merchant’s revenue chain.

One thing is for certain: the options for mobile billing will grow in response to consumer demand for an easier way to buy online using their device of choice.

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