Wednesday, Feb 10, 2010    Text size: 

The presentation, entitled "Online Billing: Exploring & Maximizing Your E-Billing Options," set out to discuss "the best and latest online billing solutions available to adult entertainment businesses."

"The foundation of all ecommerce operations is the ability to accept and process as many forms of payment as possible," said the program's promoters. "Today, there are an increasing number of solutions available to suit operations of every size, including regionally targeted billing mechanisms that can bolster your bottom line" — a bottom line which was focused upon in this discussion of "the best and latest online billing solutions available to adult entertainment businesses."

Moderated by John Van Arnam of i-Bridge International, the panelists included Ron Cadwell of CCBill; Steve Bryson from Orbital Pay; Dominic Volpe of GTBill; Mitch Farber of Netbilling; CommerceGate's Bjorn Skarlen; and Harmik Gharapetian from Epoch.

Van Arnam hit the ground running, determined to host a billing seminar unlike any other, helping the panelists distill the common ingredients of websites and operations that are customer-friendly and unlikely to run afoul of billing company regulations into a short and comprehensive list which included the invaluable advice to "Play by the rules, keep your staff and never quit…"

The subject of SMS billing received due consideration, but was not an offering that the represented companies presented, preferring to specialize in their respective market segments.

"We always tend to focus on our core competency, which is credit card billing," Gharapetian said, commenting that SMS billing fees are far higher than those for credit cards, and asking attendees if they are really "willing to give up up-to-70 percent" of the sale in processing fees and charges.

"U.S. carriers won't do SMS billing, which leaves us out of the market," Farber added, advising the attendees to focus on mobile enabled join pages instead.

Volpe cautioned that due diligence is in order to ensure that operators know who they are doing business with and how long they have been in business — an especially important factor with relatively new technologies such as SMS.

Bryson seemed optimistic, however, about the short-term prospects for adult SMS in the U.S.

"The administration we have today is focused on protecting children, protecting consumers, and protecting free speech," Bryson opined. "I think we'll see a change [in carrier policy] this year."

Not everyone agreed with this assessment.

"I don't see Verizon allowing adult content," Cadwell said. "They're just not going to cross that barrier."

On the topic of micropayments, the panelists offered that while an individual IPSP may not offer micropayments (generally defined as being less than $5 each), IPSPs may work with clients to provide essentially the same processing options.

"Batch it up into blocks," Farber said, noting that an effective business model may be to use a credit or virtual currency system, whereby instead of selling a 99-cent download, a $10 charge good for 10 downloads, may be better.

"An IPSP can blend these transactions into one account," Skarlen stated, adding that the problem with micropayments revolves around their small average transaction amounts and the processing and transaction fees that make micropayments difficult and less profitable when using credit cards as a funding source.

Bryson offered that the problem of micropayments might be resolved in the coming year, with new bank initiatives including lower processing rates and transaction fees opening the door to wider, more cost-effective availability.

The problems of evolving card association regulations were also discussed, including the sharp decline in the number of banks processing for adult and how MC/VISA seems to have "hit the reset switch" and are now proactively hunting for bad banks and bad sites and pulling merchant accounts.

"There are only a handful of banks in the entire world doing high risk," Cadwell said.

"The card brands (MC/VISA) are getting harmed," Volpe stated. "So they are shutting people down first and asking questions later."

In the old days, Farber said, while you were unable to actually see the rules, you were expected to follow them, "now you can download the rule book online," he said, illustrating the increasing proactive involvement of the associations.

The old days are gone, however, and banks today find it increasingly challenging to remain viable in the high-risk markets.

"They see the money but don't understand the problems," Cadwell said, adding, "New merchant accounts in the high-risk space are going to be very hard to get."

As for protecting the account you already have, Farber said that merchants should avoid hidden cross sales completely. "There's also a new rule coming out about not having cross sales with recurring charges," Farber said.

Following the seminar, at the DatingGold-sponsored networking luncheon, some of the program's attendees were overheard continuing the lively billing discussion — and speculating on the outcome of tonight's XBIZ Awards — which among other categories will honor the Billing Company of the Year, in the IPSP, Merchant Services and Alternative sectors.