Home > News > Hidden Fees, Stigma Hold Back SMS Billing in Adult, Mainstream • Bookmark   • Newsletters   • Register Search Options


Hidden Fees, Stigma Hold Back SMS Billing in Adult, Mainstream

Hidden Fees, Stigma Hold Back SMS Billing in Adult, Mainstream
Get XBIZ News
Jan 13, 2009 11:00 AM PST    Text size: 
CYBERSPACE — High fees and the usual resistance to adult entertainment are preventing text-message payment solutions from catching on in the mobile world.

Text-message, or SMS, payments let consumers instantly spend money with a few clicks of the keypads on their mobile phones, as opposed to the more traditional payment methods, which require consumers to get out their credit cards and go through a full billing service.

EncoderGuys Owner Nader Fasheh told XBIZ that he's in the midst of exploring content delivery over the iPhone, and he thinks mobile adult content will be a long-term winner for the industry.

"From what I know, SMS billing is growing, and I keep hearing SMS billing will be the future of online billing," he told XBIZ.

Dozens of SMS payment companies have already sprung up, but on the adult side of the business, a simple resistance to adult transactions is preventing SMS billing from taking hold.

That isn't to say that mobile payment solutions don't exist in the U.S. — they're just not as good. Harvey Kaplan, co-founder of BustBox.com, told XBIZ that in the U.S., adult companies have to make do with billing solutions that fall outside the control of carriers, none of whom allow adult transactions.

According to TopBucks' Q Boyer, the holy grail for U.S. based adult companies would be if one of the big boys were to suddenly allow such transactions.

"If, say, AT&T came out tomorrow and said 'we're now supporting adult billing via SMS over our network,' that one step would go a long way toward making mobile adult entertainment a big revenue stream for U.S. companies," Boyer said.

In order for such a paradigm shift to happen, Kaplan said that U.S. carriers would have to implement some kind of age verification. He explained that in the U.K., adult websites ask users to present some kind of ID before delivering content.

But even if such a change were to happen, SMS billing still presents some problems. Leading tech analyst Michael Arrington said that high carrier fees are preventing this convenient service from becoming more popular with mainstream companies.

Specifically, Arrington looked at two leading SMS payment services, Zong and Mobillcash. In both cases, Arrington criticized companies who use these mobile payment services to scam consumers with so-called "legacy" transactions — where a user downloads a free ring tone only to find they've signed up for a monthly payment of $20.

But more important, Arrington pointed out that mobile payment companies often allow such exorbitant payments to go through because they wind up paying 30-50 percent of their money to U.S. carriers in the form of fees.

"Those transaction fees are severely limiting the size of the market," Arrington wrote for TechCrunch.com. "Lots of merchants and application developers would love to take mobile payments, but paying 40 percent or more of the transaction to the carriers is a non-starter."

More ways to get XBIZ News:  RSS Feeds  |  E-Newsletters  |  Desktop Widget  |  Mobile
Looking for porn star news and behind-the-scene videos? Check out XFANZ.com !


Porn ‘Public Health Crisis’ Is False, Dangerous

We are witnessing the early stages of a moral panic, the likes of which we have not seen since the Reagan Administration. As I write this, there are 27 states in the process of passing mandatory porn... More »

The Skinny on the New DMCA Requirement

The requirements under the Digital Millennium Copyright Act (DMCA) have changed, but the sky is not falling. We have, even as a law firm, been hit with an unbelievable amount of spam sent out by law firms... More »

2017 Outlook: Legal Matters Around the Corner

The adult entertainment business’ legal community recently weighed in the top issues that companies and the industry, as a whole, should be concerned about. XBIZ asked industry attorneys to discuss... More »
Stay informed of the latest industry developments. Get XBIZ newsletters delivered to your inbox. Subscribe today!
Enter email address:

* To manage existing subscriptions click here.

Submit your press release to
multiple news outlets with 1 click.
Subscribe to RSS news feeds or
add free content to your website.
Access XBIZ news and articles
with your mobile device.
Subscribe to XBIZ World magazine, the industry's leading e-commerce trade publication, delivering in-depth coverage of the online, mobile and ancillary digital markets.


XBIZ.net Paysite Meetup

May 04 - May 04
Prague, Czech Republic

Eurowebtainment 2017

May 17 - May 20
Majorca, Spain

XBIZ Retreat

May 30 - Jun 03
Miami, Florida

XBIZ Miami 2017

May 30 - Jun 02
Miami, Florida
Everyday thousands of business professionals browse XBIZ's industry directory for quality products and services. Not listed yet? Your company could be losing potential new business. Submit your company today!
Use XBIZ RSS feeds to stay informed of the latest industry developments or as a content syndication tool for your website!