When
did payment processing become all about rates?
- Was it a few
years back when a recession hit the U.S. economy?
- Was it always
about rates?
Are
times changing?
- Are merchants
finding increased value in third-party payment processing providers?
- What impacts are
the new and different ways consumers are buying having on how merchants
are incorporating payments into their business either empowering or
limiting the growth of the industry?
Where
is the billing/processing industry headed?
The
Past
During
the heydays of the late 90s and early 2000s, payment processing was starting to
get its legs underneath it and taking off with the rest of the online world.
There was little doubt that the need was there as consumers were becoming
accustomed to making purchases for online content. And while those early days were
not all shiny and pretty as we tend to remember, the relationship between the
webmaster and the e-commerce provider was a partnership which provided a
significant value to the online business. Generally speaking businesses were
achieving positive results and growing.
And
then 2008 rolled around and a recession started to hit the U.S. economy, which
escalated into a global economic slump. As a natural reaction to tightening
sales, businesses started taking a look at any way to keep their incomes
stable, with an obvious path being that of reducing the costs of doing
business. During this time period, as consumer wallets were getting
tighter, the advertised rates for payment processing became an easy part of
their business to look at.
But
price is not necessarily cost.
During
this time of tightening, we also saw a change in the overall online commerce
business. Consumers got smarter with using online commerce. Financial
institutions cracked down on deceptive practices and age-old scams in the adult
arena, as well as tightening card restrictions on certain types of business
models. Global markets and payment options opened up in new corners of the
world. Markets for online content expanded exponentially as more consumers in
more markets accessed content from any device, anywhere.
Did
the move to cheaper options with fewer features fuel the move of consumers to a
faster, easier and often free experience?
The
Future
Any
way you look at it, e-commerce has had a meaningful shift in the direction of
the consumer experience. And done so quickly. Just in the past few years we
have seen the rise of mobile. People are increasingly on the go. They want
access to content from where ever they are, on whatever device they happen to
have on them at that moment.
But
that consumer is different now. And the webmaster is an established business
owner now. In order for the adult site to survive today, it requires an
all-inclusive checkout, tailored to millions of people in hundreds of
countries. A business needs to adapt to short attention spans and multiple
devices with a variety of formats. The business needs to adapt quickly to
changing regulatory issues, global fraud trends and data security issues.
Services
cost. With
so many options for accessing content, one corresponding question businesses
and merchants should ask themselves is, how am I going to provide payment
options that will work for all of them? How am I going to manage all of
this myself?
But
What Does This Mean?
The
view is often murky at best when trying to determine just what the next big
thing is going to be in online payments. So whether you choose a low-cost
merchant offering or feature-rich inclusive processing solutions – the consumer
has to be the priority in order to continue to reach a saturated market. The
good news is, no one has to go at it alone. There are plenty of e-commerce
partners ready and willing to help out. And while developing a business plan is
something nearly any merchant undertakes, one thing that can sometimes be a bit
overlooked, or maybe even taken for granted, is the payment processing
system/solution.
Particularly if the only question being
asked is ‘what are the rates’? You have to look at the consumer experience
management and ask the bigger question: ‘what are the costs?’ and “what are the
cost to the business if we don’t offer the best consumer experience.”
Two-way streets.
Transactions, by their nature, are two-way streets. There is a
buyer and a seller. That same logic can be applied to e-commerce. There is a
merchant/business and a partner/provider. To really succeed into the next
decade and beyond, it’s time to invest in the consumer. Partner with your
e-commerce provider – whoever it is – to not only learn what’s new, but also to
develop strategies. As we go into the future of adult online entertainment, we
can learn and evolve to embrace the new, the picky, and the erratic consumer to
drive new sales and expand the business even more.
It is definitely not the same old e-commerce. It’s a new game.
So what do you think?