For adult website owners, “alternative payments” have traditionally meant using “anything other than MasterCard or Visa” — but with worldwide internet penetration now at its highest levels, a broad range of potential customers that do not have these credit cards are now available, demanding billing options.
For many of these markets, MasterCard and Visa are the “alternatives,” redefining the equation today, as even more options come to the fore. To get a handle on this evolving situation that directly impacts a merchant’s bottom line, XBIZ asked a group of global adult billing professionals, “What is the state of alternative payment solutions in 2017?”
Localized and alternative payment solutions can have a big impact on throughput. Adding new payment options will be a big push for SegPay in the fourth quarter and in the new year.
Here’s what they had to say:
Payze.com CEO Doug Wicks told XBIZ that country-specific payment habits are always important elements to add for merchants looking to maximize revenue.
“However,” Wicks cautions, “credit and debit cards are still at the forefront of e-commerce for most.”
Sales executive Pearl Levy told XBIZ that Firstchoice Pay (formerly Payoneer) is a “pay-out” company, in contrast to other billing service providers, which are “pay-in” companies.
“With 2017 transitioning from summer to fall, we see continued growth in pre-paid debit cards as ‘pay-out’ solutions,” Levy said. “As the de-facto pay-out method for models, studios, affiliates and vendors, pre-paid debit cards overcome barriers associated with international wires or other forms of payments.
“It is becoming increasingly difficult in various regions of the world to acquire and operate full-featured banking accounts for this purpose,” Levy adds. “Firstchoice Pay enables large-scale pay-outs in a secure, global, and easy-to-use fashion.”
DIMOCO VP of Sales Bettina Sommer sees a solid future for alternative payments, especially via mobile.
“Direct-carrier billing is on the rise. The online payment method that everybody literally already holds in their hands is becoming more popular and familiar with consumers, already ranking in the top three payment options at Facebook,” Sommer said. “As consumer affinity with the online environment grows, digital content purchases are expanding beyond what was in effect a second wave of ‘walled gardens’ (the app stores) on the wider web.
“A mobile device turns into a progressive payment instrument for online and physical goods, an ideal solution for those maybe less tech-savvy, simply in a hurry or even unbanked,” Sommer adds. “More and more industries are adapting to the trend of providing a quick and easy option and becoming an increasingly vital and irreplaceable part of today’s mobile payment landscape, as the payment option has become standardized and widely accepted.”
SegPay CEO Cathy Beardsley agrees that alternative payments are going strong.“Localized and alternative payment solutions can have a big impact on throughput,” Beardsley told XBIZ. “Adding new payment options will be a big push for SegPay in the fourth quarter and in the new year.”
ChargebackHelp’s Raja Roy-Choudhury says billing’s Holy Grail is to get Apple Pay or Google Pay to start processing adult transactions.
“We want less checkout friction on mobile devices,” Roy-Choudhury explains. “Paying by credit card on a phone or tablet is a pain in the ass, and alternative payments could smooth that out. CCBill has their new wallet and we are waiting to see if it gets traction.”
For CCBill’s part, its new wallet is a visible example of a shift in attitude and tech towards “alternative.”
“For us, this really is something of the past … when an alternative payment solution was bolted-on to address a specific location, payment or emerging market issues,” Gary Jackson, CCBill’s VP of sales and marketing, told XBIZ. “Today, nearly all the ‘all-in-one’ payment services providers can provide a robust portfolio of automated global credit card and localized payment options, making payment experiences familiar, simple and seamless for consumers around the world.”
Mobius Payments’ Director of Sales Matthew Mund says credit cards and ACH continue to dominate the adult market which is why the company offers and supports both options — but it is eyeing the future.
“Cryptocurrency is still in its infancy when it comes to being accepted widespread and as we see more variations of cryptocurrency being introduced, I think it confounds the average consumer because they are uncertain of its stability and interchangeability across different platforms,” Mund explains. “We’re still a few years off before it begins to have an impact in our industry.”
Nudging the future into the present, Titcoin Digital Currency co-founder Edward Mansfield told XBIZ that cryptocurrency is firmly back on the radar as a viable form of digital cash.
“After several years of sitting on the sidelines, 2017 was a breakout year for cryptocurrencies such as Bitcoin, which is now valued at over $4,500 per unit,” Mansfield says. “Major financial institutions such as Fidelity and Merrill Lynch have fully accepted cryptocurrencies as a [legitimate] monetary commodity with predictions for further growth in this space.”
Mansfield says the natural outcome will be greater usage as a monetary instrument to transact and make purchases online — especially for adult.
“The key advantages to cryptocurrency as a form of adult billing are extremely low transaction fees, the elimination of chargebacks and more customer privacy,” Mansfield concludes. “Cryptocurrency has finally matured as a payment processing solution, and 2018 will see tremendous growth in this space.”
Titcoin parent Outhouz CEO Christon “Doop” Le’John says he doesn’t think the primary solutions and the people who use them are going anywhere.
“I can’t speak for others, but our goal is not to supplant those solutions entirely anyway. What we need to understand as developers of ‘alternative’ methods is that they are exactly that,” Le’John confides.
“You know what they say about getting there first? All we can continue to do is strive to be better.”
A resurgence in interest for cryptocurrency was not the only watershed this year, with the return of one of the major card services to adult — American Express — a popular payment method that like PayPal, previously dropped services to the industry. Now, both prodigal payment processors have returned to the industry.
“2017 has seen the return of American Express to adult billing,” Vendo CTO Buddy Love says. “Vendo welcomes American Express and will work to make this payment solution available to all merchants.”
When seeking alternative (especially localized) payment solutions, it is wise to gain a local perspective.
GH-Bill.com Partner Manager Stefan Eigner told XBIZ the company serves more than 5,000 websites in diversified industries including adult entertainment, online casinos and e-wallets.
“Europe is one of our major markets when it comes to online sales, and adult merchants with this target market shouldn’t underestimate the payment behavior of Europeans,” Eigner explains.“Even more importantly, adult merchants need to get prepared for the new instant SEPA payment system, which will become effective by Nov. 17.”
Eigner told XBIZ the European Payments Council is pushing ahead with plans for a pan-European instant credit transfer scheme to bring real-time money transfers across the Single Euro Payments Area (SEPA). The SEPA Instant Credit Transfer (SCT Inst) scheme promises to enable people to transfer up to €15,000, within 10 seconds, 24/7/365, across borders between accounts in any of 34 SEPA countries.
Eigner says alternative payment methods such as ClickDirectPay.com (CDP), a subsidiary of Miami-based GH Capital Inc., a full SEC-reporting publicly traded company, are becoming more important to online merchants targeting European audiences.
“Merchants can integrate one time with CDP and receive realtime notifications per transaction so the way is paved to deliver goods or services immediately to the user,” Eigner says. “CDP is based on a SEPA wire transfer so funds are usually settled within three business days at the merchant’s corporate bank.”
Eigner told XBIZ that as instant payments are becoming more popular in Europe, credit card payments are becoming less important across the region.
“What’s the magic advantage for the adult industry? No friendly fraud or chargeback can occur, which is a black flag to every adult merchant,” Eigner explained. “Using this kind of alternative payment method will help to monitor transactions without having technical issues integrating with different shopping carts that are not developed yet, to cover instant payment notifications.”
It is an interesting option, and indicative of the range of responses here revealing how both new and established alternative payment solutions continue to evolve based on advancing technology and on shifts in consumer preferences — preferences that all merchants, adult or otherwise, should cater to.