Casting the net on consumers

Blog

Jul 3rd 2008 at 11:58 by Jeremy Kagan

We all know that the online content industry is worth millions of dollars, but today millions of sales are lost due to inefficient or incomplete payment services that do not solve all the concerns of the customer and cater to their every need. How we fix this and turn browsing consumers into paying customers has been a long-running issue for the casual games market.

The problem is that there are so many options it is very hard to choose which ones would work the best and convert more customers, and each payment option has it own glitches in the system, here are some examples:

- Some payment options work very well for inside the US, but once you live abroad, you have a problem to pay through them. Some payment options require the customer opening an online account with them and funding it from their credit card or bank account. That might be a problem for teenagers or others who do not have a credit card or bank account which according to the Yankee Group, are 40 per cent of internet users.

- Some content providers opt to put their content on the operators’ portal and not have to deal with payment processing issues. This means that the mobile operator has put the site up on his “walled internet garden” and the customer gets charged for the download through his mobile operator monthly bill. But will that really solve all the problems? That will definitely not help users who download content to their PC’s and not to their mobile, they cannot charge the content to their mobile bill. And what about all the users that surf outside the operators portal, how will the merchant generate that audience to his site? Also the revenue share that the merchant receives from the mobile operator is pretty low. The “walled gardens”, or the operators portals are crumbling due to customer demand for “open internet” browsing. Mobile carriers are not the only way for buying content to the handset, consumers are downloading also from the open web and from their personal collections. According to Parks Associates' "The New Frontier: Portable and Mobile Gaming" report, US mobile games sold through carrier decks are predicted to generate 72 per cent of revenue in 2012, down from 90 per cent in 2007.

- Then there is the issue of credit cards. First of all, not everyone owns one, and second; people are less reluctant to use their credit cards for micropayments since they are worried about security issues, fraud and identity theft. Online fraud and identity theft have sadly become a daily event, as online shopping become more popular because of its convenience. Hardly a day goes by where we do not hear of an individual whose life was destroyed or nearly destroyed because someone hacked into their personal information and made purchases on their behalf, leaving them to “pick up” the bill. In 2007 in America alone identity fraud reached $45 billion in losses and affected 8.1 million American consumers.

Something that would help would be to think beyond the list of tired and tested approaches above and use a variety of payment options. According to research that was done by CyberSource, merchants can convert as many as 20 per cent more customers by offering them more payment options to choose from. Consumers are more likely to purchase content if they can choose the payment method that suits them.

So millions of dollars are floating on the internet sea waiting to be caught. By putting multiple payment options on your site you are casting the right nets in place to pull the consumers in and to change them into customers.