Phone Billing: A World of Opportunity

Stephen Yagielowicz
They say that the Internet has made the world a smaller place, and I think that few adult webmasters would disagree. Indeed, a quick glance of most sites' web server logs will show visitors hailing in from Tahiti to Timbuktu — and everywhere else in between.

While having an ever-increasing flow of traffic to your website is vital, the cosmopolitan nature of this commodity provides some distinct challenges to operators on several fronts; including reaching visitors with cultural differences; communicating in a language your visitor's understand; and allowing your customers to purchase products or services using their preferred currency and their desired method of payment.

For a substantial percentage of the world's population, the language is other than English; the currency is not the U.S. dollar; and their desired method of payment is via charging it to a standard telephone or mobile phone account.

When many operators think of phone billing they think of dialers — a controversial phone billing mechanism that was widely abused and now illegal in certain jurisdictions. While dialers have largely been relegated to the past, other methods of phone billing, such as pay-per-purchase systems, have become popular with consumers who enjoy the predictability of the price-point and the ease and perceived anonymity of the purchase — which does not require the use of a credit card.

One such system is Password-by-Phone (PbP), which allows customers to pay for membership website access by dialing a phone number and receiving a password that will be billed to his or her land-line telephone or cell phone account. The process requires a six-minute phone call that will be charged to the user based upon the international billing rates currently in effect; he or she will then receive a password that is typically good for 30 minutes of access at the participating website. No simultaneous second phone line connection is necessary in order to use the system.

While telephone billing is not recurring by default, websites that offer compelling content may have a good chance of attracting repeat customers that enjoy the freedom of paying for only the amount of access time they want then and now, without having to bother with often troublesome subscription cancellation processes later.

Before a prospect can become a customer, however, he or she needs to be understand the purchase process; and that's where language and communication come to together.

According to Password-by-Phone's Marc Jarrett, developing multi-lingual capabilities is important to the success of adult e-commerce websites. "Given the global architecture if the Internet, it is imperative to communicate with the surfer in a language they understand — theirs," Jarrett said. "2003 was a significant turning point in the brief history of the web thus far. In that year, the number of non-English language hosts on the Internet out-numbered English ones for the first time."

This trend of non-English Internet penetration is especially true of developing countries, which are increasingly becoming more affluent, better connected to the Internet, and in many cases, already well-served by savvy marketers seeking a broader audience.

"With some developed countries already demonstrating signs of saturation, such emerging markets represent a fantastic opportunity for any adult webmaster wishing to fully capitalize on the global reach of the web and is in this business for the long haul," Jarrett told XBIZ.

One of the biggest and potentially most profitable of these emerging markets is China, which accounts for about one-fifth of the world's population, but poses some significant challenges for adult operators — both in terms of billing, as well as in regards to the well-reported censorship promoted by the Chinese government.

"With over 1.3 billion inhabitants, China is the world's most populous nation and is experiencing exponential growth in practically all areas — including Internet usage," Jarrett said. "Some 137m people, about 10 percent of the overall population, are already online, and this figure is expected to grow rapidly in the next few years — making it arguably the world's most attractive market in the long term."

Despite language barriers and other differences, communicating the purchase process and motivating reasons for membership to a global audience is not insurmountably difficult.

"The ordering process creates the revenue. Once inside the member's area, the billing clock is no longer ticking," Jarrett told XBIZ. "This way, webmasters can make money from all surfers — including those in developing countries that do not have the luxury of broadband or the two phone lines on which other phone solutions are dependent." But it's not simply just developing countries or those that do not speak English that favor alternative billing methods such as pay-per-purchase phone solutions.

"Pay-per-call phone billing works, not least since the phone is so ubiquitous — in fact, here are now more cell phones in the U.K. than there are people," Jarrett said. "In an era of increasing online fraud and identity theft, there are a whole army of people out there who have credit cards, but would prefer not to use them online."

As any experienced e-commerce operator will tell you, it's not what you make, but what you get to keep; and while credit cards and the easy recurring billing they offer are often the preferred revenue stream, they have the drawback of being vulnerable to chargebacks — which are rare in phone billing.

"With phone billing, chargebacks are negligible since calls to such numbers usually represent a small fraction of the phone subscriber's overall activity," Jarrett said. "Failure to pay will result in termination of an essential utility."

It is the universal necessity of this "essential utility" that makes it appealing as a billing mechanism that crosses boundaries. Telephones have become a truly indispensible item that increasing numbers of consumers are using for more than simply and taking making phone calls, and this is true the world over.

PbP is available as a billing option in 240 countries and is geo-targeted in 37 languages, including Russian, Hindi, Arabic and Chinese, which allows operators to capitalize on the emerging Asian markets.

"Money talks, in every language," Jarrett said.

Using the phone is the way you may be able to hear what it's saying.