Mobile/wireless technology has evolved considerably since the late 1990s, and in 2011, mobile devices aren’t just for making phone calls; they are also used for everything from checking soccer scores to sending e-mail to getting the local weather forecast. Further, mobile devices are often used for viewing erotic entertainment (mobile erotica is especially popular in Europe), and more and more, they are being used to pay for it.
A long list of companies in different parts of the world offer mobile/wireless billing. Among them: Verotel (which is based in Amsterdam, Holland and has been in business since 1998), Pay123 (also based in Western Europe), the London-based Adult Mobile Solutions, the Netherlands-based Pay2Access, and PayMate (which has offices in California and Sydney, Australia). And mobile billing is the specialty of iTelebill, which is headquartered in London but also has offices in Australia (Sydney), New Zealand (Auckland), South Africa (Johannesburg), the Republic of Ireland (Dublin) and other places.
The main advantage of mobile payments is that they are quick, secure and anonymous, which is important when it comes to adult sites.
“The main advantage of mobile payments is that they are quick, secure and anonymous, which is important when it comes to adult sites,” explained Daniela Ganick, senior account manager for iTelebill. “Users would rather pay a monthly subscription on their phone bill if it means they don’t have to dig out their credit cards and enter their personal and private details online. A user texts in once to subscribe to the service and is then billed regularly without any further confirmations until he cancels. There is no need to enter long credit card numbers, expiration dates or CVV’s—(just) a simple text message, a quick confirmation, and off they go. What’s not to like? When I talk to our clients about mobile billing, they tell me how surprised they are by the success and that they would never have guessed that so many people would prefer paying by mobile phone.”
Ganick continued: “Mobile payments have many advantages. The biggest one is probably that almost everyone has (a mobile phone) nowadays, which makes it a lot more attractive and accessible for billing than credit cards. The other advantages are that the transactions are fast, secure and anonymous, as we have found that a lot of users shy away from entering their personal and payment details online. Over here in Europe, it is already a very common and well liked payment method. The biggest advantage for content owners to add mobile billing to their sites is that the chargeback rate is less than 1 percent as well as the fact that this can open up a completely new revenue stream. Companies adding mobile payments can easily earn another 15 percent on top, and that is only from converting users who cannot sign up because they don’t have access to a credit card or simply want an anonymous payment method.”
Although credit card payments continue to be the dominant billing method among Americans who patronize adult websites, Europe is another matter. There are millions of European Internet users who don’t own credit cards at all, and adult webmasters who don’t offer alternative billing methods automatically lose a lot of potential customers. But while the amount of credit card penetration can vary considerably from one European country to another, mobile phone penetration is high all over Europe.
“Mobile payments are popular everywhere, as everyone nowadays has got at least one mobile phone and it is just so much quicker and easier than paying by credit card,” Ganick asserted. “But of course, in countries where the credit card penetration is rather low—some European countries, for instance, have a credit card penetration of less than 20 percent—it is simply necessary to provide alternative billing solutions. So why not use a method that is guaranteed to work and to convert, as all a user needs is his mobile phone being able to send a text message?”
The U.K. presently has Europe’s highest credit card penetration rate; 67 percent of U.K. residents own at least one credit card, according to Forrester Research. But Ganick pointed out that U.K. residents who use credit cards for a lot of in-person transactions don’t necessarily like to use them when shopping online. “Even in countries where the credit card penetration is high, like in the U.K., a lot of people are choosing to pay by mobile phone,” Ganick noted.
While Europe is a leader when it comes to mobile billing, it is by no means the only part of the world where mobile billing is taking place.
Patrick Sallnert, chief operating officer for Failsafe Payments, observed, “Japan has a big penetration, but India and Africa come very strong.” And Ganick said: “Apart from European countries, we have also noticed that mobile payments are hugely popular in Australia.”
Although most Americans who shop online are doing so with credit cards, Ganick predicted that mobile adult billing will increase in popularity among U.S. consumers. “From what I have heard in the last few months at events and conferences in the U.S.,” Ganick explained, “[mobile billing] is already growing very fast — and a lot of the bigger mainstream companies are looking at mobile billing.
‘There already are more ways than just simple premium SMS billing available in the U.S. that are on the same standard as the solutions developed in Europe. At a recent conference in New York, I was told that credit card billing will probably always be the nation’s favorite, but that mobile billing will fast become more and more popular.”
Ganick added: “In European countries, mobile payments have been part of our daily lives for many years, while it seems the development in the U.S. is only taking off now. I do hope that it will become just as popular (in the U.S.) as it is in Europe. I imagine that credit card payments will always be more popular in the U.S. than anywhere else, but I am convinced that at some point in the future, it will become just as necessary to offer mobile billing (in the U.S.) as it is to offer credit cards.”