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?
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?
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.”
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?