YNOT EUROPE – The online adult space is as competitive now as it has ever been. Over and above millions of websites out there, surfers have a virtually limitless supply of free material at their disposal thanks to all those tubes and torrents. Looks like the internet is still for porn, especially in the new free economy.

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

When it comes to turning bytes into bucks, the credit card understandably remains 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, a whole army of people who possess cards would rather not use them online — especially with offshore porn merchants.

With this is mind, webmasters need to consider offering alternative billing mechanisms, each of which has its own benefits and drawbacks.

Phone Billing
From a customer’s perspective, the main advantage of this form of “buy now, pay later” method of payment is anonymity. Surfers simply dial a premium-rate number and pay the phone company with which they already have a contractual relationship. Access to the desired web content usually is granted for the time the surfer is connected to such a number, with no embarrassing reference to the merchant when the customer receives his phone bill.

From a webmaster’s perspective, the main advantage of phone billing is that it allows monetization of traffic from all over the world, thanks to the ubiquity of the cell phone. However, phone 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, and 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.

The phone-biller does not dictate the und-user cost. Instead, the phone companies with which the biller has revenue-sharing arrangements do. Remember to shop around for the best rates!

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

Checks
In the U.S., 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 ACH payments, up to a third of online check transactions get returned or never get through. Those that do apparently rebill much better than sales made via other alternative payment means.

Outside the U.S., checks are becoming increasingly redundant. In the UK, for example, the government recently announced cheques are to be phased out entirely by 2018.

Direct debit
Direct debit is a method that allows users to pay directly from their bank accounts using an electronic transfer system. The mechanism is available in several countries, including the UK, Germany, South Africa and the Netherlands, and it is scheduled to be available across the entire Single European Payments Area by the end of 2010. It is ideal for recurring monthly subscriptions.

In the U.S., where checks remain 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, e-banking solutions exist to 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 a customer successfully authorizes 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 e-commerce, 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 the digitally nervous.

Customers simply pay cash at a points-of-sale network in places like convenience stores and gas stations. In return, they receive a coupon, the code on which they enter into your website. Since this a cash transaction, it is free of chargebacks — a clear upside for webmasters.

From the consumer’s perspective, the upside is anonymity. The downside, particularly during inclement weather, 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.

Marc Jarrett has been a consultant and facilitator in the pay-per-call industry since 1994 and currently works with several companies within the alternative-billing space. He may be contacted by email.