Cash processing – the ultimate insurance policy

Hardly a day passes nowadays without yet another thread being posted on the industry boards announcing the passing of another affiliate program. Times are indeed tough, especially in the new ‘freemium’ economy – surfers want and expect material for free before even entertaining the idea of parting with their money for a premium version of your offering.

What is more, even if you have managed to steer a potential customer to your join page, there are further challenges to overcome: perhaps the surfer does want to use his or her credit card online, particularly on an adult site. Or maybe they have been reading the numerous articles in mainstream media about identity theft and do not want to leave a digital trail. Perhaps they do not have a card. Or they have one, but like countless others it is maxed out and there is no credit left…

From a processing perspective, this results in several other challenges: there is pressure on the card associations from all quarters and at some point it may just not be worth the trouble or the resource drain to contend with the fraud, chargebacks, customer complaints and communication necessary to sustain adult involvement.

To this end, smart forward-thinking companies are adding every payment method possible to their options mix so if the unthinkable were to come to pass, they'd take the hit, but they would not be out of business the next day.

Of these, cash processing is one of the newest and least understood. And, no, it does not involve customers sending cash in an envelope via snail mail! Instead, they hand over their money at a local point of sale in return for a voucher which then grants access to websites that employ such billing. London based www.ukash.com is by far the largest player in this space, with an estate of over 420,000 physical issuing points in 33 countries and growing exponentially.

Cynics of such billing point out that it disrupts the sales flow with potential customers having to leave the comfort of their computer and pop into their local convenience store in order to complete the transaction. What they fail to realise, however, is that the accrued balance can be conveniently rolled over, making constant trips to the cash collection agents unnecessary. Furthermore, Ukash can also be purchased online in several territories.

Since these are cash based transactions, they are free of chargebacks or repudiations; all funds are ensured, and effectively allow webmasters to reach previously unattainable customers – the unbanked and digitally nervous.

By adding such billing to your processing portfolio, not only are you adding a healthy percentage of revenue to your bottom line, but also you are in a position to remain in business if ever card issuers were to seize the moral high ground for whatever reason.

Whilst adding additional alternative billing might feature low on your current list of priorities, there might come a day when it will suddenly have to become your top priority and it will be your turn to join the bottom of a lengthy queue.

Acting now will not only create much needed additional revenue, but also will ensure that you will still be around should the worst case scenario ever come to pass. By integrating now, you will be able to learn how the system will work for you as it may be your lifeline in the future. Meanwhile, who doesn't want a bit of extra cash in the bank?

Surfers who get as far as your join page want to become a customer - if you won't take their cash, you can bet your bottom dollar that someone else will.

Next generation dating – welcome to location-based GPS hook-up apps

Many years ago, way back in the eighties when I was still young, free and single, the only medium available to meet members of the fairer sex in a similar predicament were the personal ads that could be found in newspapers and magazines.

In the nineties, the stigma associated with meeting potential partners this way receded – indeed, a couple I know that met this way flaunted the fact by printing the advertisement that led to their union on their wedding invitations!
Then, along came the internet. By now, I was “hooked-up” and did not need the services of such sites – but they always struck me as ideal vehicle to do so if I did.

According to a recent study which pulled data from a number of sources including Reuters and The Washington Post, online dating is now worth more than one billion dollars per year. The same study claims that it even eclipses the revenues generated by online porn, and estimates the mobile dating market to be worth some $550m.
An unlikely ambassador to extol the virtues of next-gen mobile dating was the British actor Stephen Fry who British mentioned the geo-social networking app Grindr on the popular TV show Top Gear. Popular with gays, Grindr makes use of the device geolocation, which allows users to access other gay and bisexual men within close proximity.

Not surprisingly, a number of other companies are lining up to become the ‘straight’ equivalent. Of these, www.PinPointsX.com are way ahead of the pack, and have already been named #1 hoop-up app my AskMen.com and have received rave reviews from CNET, LA Times, The Huffington Post and others.

A location-aware adult social network, www.PinPointsX.com provides users with an interactive “passion map” of either their current or chosen location. The map displays private people and their sexual orientation, and adult businesses and nightlife. The user can then interact with any of these entities, using calls/messaging/emails. If the other party is online they can chat or talk, and if not, they receive an email notification. In other words, no matter where you go - the map conveniently serves the entire sexual scene around the users’ current location.

The added value of the PinPointsX.com platform over other adult social networks is that it relies greatly on the users’ location and presents all of the adult nightlife options within an immediate area. One of the more important addition is the Apple approved PPX to-go™ available in the Apple app store and in the Android Market. The app uses GPS and other location functionality on the phone or iPod to automatically update the user's location and presents new erotic options wherever he or she goes.

I just wish this technology had been around all those years ago when I was on the open market!

Premium Phone Chat - reloaded!

Thanks to VoIP, it's now easier that ever to operate a pay-per-minute phonechat website. www.chatterwith.me - which is due to be launched in Q1 next year, is a sophisticated, multi-featured platform that combines internet, phone and messaging platform. It will enable phone operators to receive paid calls anonymously. It enables them to easily set up their own SEO friendly Pay-per-minute site, and to charge what they like per minute.

Programs with numerous models can dictate % outpayments. It has has been designed from the ground up to be extremely user-friendly for all participants - models, callers, and administrators.

Both surfers and models sometimes get fed up with the clutter of the internet, and pay-per-minute phone chat makes for a great cross selling opportunity as well as an instant new revenue stream.

Currently in beta, if you are a webcam model or program and are interested in your own pay-per-minute site please email me marc@emjayconsultancy.com for further information.

Country snapshot : Bolivia

Bolivia, officially The Republic of Bolivia, was named after Simon Bolivar, and is a landlocked country in central South America. It is bordered by Brazil on the north and east, Paraguay and Argentina on the south, and Chile and Peru on the west. It has a population of some 9.5 million people, approximately one million of which have access to the internet at this time.

One of the poorest and least developed Latin American nations, Bolivia has the region’s lowest credit card penetration rates and remains a predominately a cash based economy.

Mindful of this, cash-based processor Ukash recently announced that Bolivia is the latest country where their vouchers will be available at convienient local shops, thus allowing Bolivian consumers to start spending online.

Bolivia also has low mobile and second lowest fixed-line teledensity. Mobile telephony suffers from poor quality of service and inadequate network capacity, and whilst premium SMS (PSMS) is not yet a viable billing mechanism in this market, pay-per-call billing via international premium rate numbers is.

In February this year Oruro became the first Bolivian entity with full mobile telephony coverage. Bolivia also plans to launch its own satellite, to be named Tupac Katari, primarily to provide telecom services in isolated rural areas.

In conclusion, if you are currently receiving traffic from this emerging market, you should consider deploying cash and phone payment methods as your primary, not secondary, billing mechanisms.

Country snapshot : South Africa

Hosts to the eagerly anticipated football World Cup, South Africa is ranked the 25th wealthiest county in the world in terms of GDP. However, there still remains an enormous disparity between the rich and the poor, since about a quarter of the 49m strong population is unemployed and lives on less than the equivalent of $1.25 U.S. a day.

Of the remaining three-quarters, about four and a half million people, or 9.4 percent of the overall population, have access to the fixed-line Internet at this time. Perhaps surprisingly, this is not the highest Internet penetration rate in the region — that particular honour is bestowed upon the island nation of Mauritius.

According to Euromonitor, debit cards dominate South Africa's payment card market with 28 million of them in circulation as of 2008, versus about 8 million credit cards which, interestingly, by law cannot be used to purchase gasoline. In light of the forthcoming influx of tourists, politicians are working to revise those regulations, so that people can pay for gas using their flexible friends.

As for premium-rate pay-per-call numbers, South Africa is the only country on the African continent that support these, and Premium SMS (PSMS) is also a viable billing mechanism in this market.

Accepting cash from this largely unbanked nation is also possible, thanks to ecommerce payment provider Smart Voucher Ltd, trading as Ukash, who became the first to offer online cash payment solutions in South Africa; allowing e-retailers to market to the country's large cash consumer base for the first time.

U.K.-based Ukash, in partnership with strategic South African-based partner Blue Label Telecoms, enables consumers who do not own a card or are unwilling to use it on the Internet, to purchase from online merchants without revealing sensitive bank details using prepaid vouchers.

By steadfastly sticking to a "credit card only" payment policy, you are therefore depriving yourself of additional revenue if you are currently receiving traffic from this, the largest economy in the African Union.

The pros and cons of alternative billing

As another decade dawns, the online adult space is as competitive as it’s ever been. Over and above millions of websites out there, surfers now have a virtually limitless supply of free material at their disposal thanks to all those tubes and torrents. Look like the internet is still indeed for porn, especially in the new free economy.

But all is not lost: Whilst the classic vanilla porn paysite may have had its day, there are still a plethora of products out there for which surfers are prepared to pay: be it a niche site with hard-to-find content, an immersive 3D world, or dating and camsites whose end-user experience cannot be replicated on the tubes or elsewhere, sex still sells.

When it comes to turning those bytes into bucks, the credit card remains understandably the most popular billing mechanism with most webmasters, not least since it allows customers to enter into recurring monthly memberships.

However, in an era of increasing online fraud and identity theft, there are a whole army of people like me out there who have a card, but would rather not use them online – especially with offshore porn merchant lol

With this is mind, webmasters can offer alternative billing mechanisms, each of which has its own benefits and drawbacks.

Phone Billing

From a customers perspective, the main advantage of this form of “buy now, pay later” method of payment is its anonymity. Surfers simply dial a premium rate number and pay the phone company with whom they already have a contractual relationship. Access to the desired web content is then usually then granted for the time that the surfer is connected to such a number, with no reference to this when they receive their phone bill.

From a webmaster's perspective, the main advantage of such billing is that it allows them to monetize traffic from all over the world thanks to the ubiquity of the cell phone. However, such billing does not support recurring memberships, and the phone companies keep a significant proportion of every dollar billed.

With phone billing, there are two key billing mechanisms: Pay-per-minute (PPM) whereby access to premium web content is maintained whilst the end-user remains connected to a premium rate number, or Pay-per-access (PPA) whereby the ordering process for the required password generates the revenue and the webmaster can then decide how much access time he or she wishes to grant per password sold.

Your phone-biller does not dictate the und-user cost, rather the phone companies with whom they have revenue sharing arrangements do. Remember to shop around for the best rates!


Premium SMS

Whilst Premium SMS is currently only available in 25 countries and therefore does not offer the global reach of phone billing, it remains a great micro billing tool for offering ‘pay as you go’ membership if you are willing to forgo a significant proportion of the end user pricing for the privilege of having the cellcos become collection agents on your behalf.


Checks

In USA, checks are cleared by the Automated Clearing House (ACH) network, a nationwide batch-oriented electronic funds transfer system governed by the National Automated Clearing House Association.

However, according to a source that accepts them, up to a third of online check transactions get returned, or never get through, but that those that do apparently rebill much better.

Elsewhere, checks are increasingly becoming redundant, with the UK Government recently announcing that they are to be phased out entirely by 2018.

Direct debit

Direct debit is a method that allows users to bill directly from their bank account and is available in several countries, including the UK, Germany, South Africa and the Netherlands. It is scheduled to be available across the whole Single European Payments Area by the end of 2010, and is ideal for recurring monthly subscriptions.

In the United States, where checks are still more popular than bank transfers, a similar service is available through the Automated Clearing House ACH network.

E-Banking

In some markets such as Germany, Ebanking solutions exist which facilitate a process whereby funds are automatically taken from the customer’s regular checking account and instantly transferred to the vendor’s bank account.

Within a few seconds after successfully authorising the remittance, the online merchant receives a confirmation of payment so that he can deliver goods and services immediately.

Cash

Clearly, accepting cash via snail mail is not suited to ecommerce, but by working with a cash collection network intermediary, webmasters can start to make money from two previously unreachable types of customer: the unbanked and digitally nervous.

Customers simply pay cash at an extensive points-of-sale network such as convenience stores and gas stations in return for a coupon which is then entered into your website. Since this a cash transaction, it is free of chargebacks.

Upside from the user’s perspective is the anonymity in paying this way, no awkward forms. The downside, particularly during this cold snap, is having to leave the comfort of the web and get out in the real world in order to gain entry into the forbidden fruits of your members’ area...