Payments Without Borders

IBC 2015 - picture-45-1409734168Year on year we hear that the global pay-TV market is growing and that the number of pay-TV subscribers is continuing to rise. According to ABI Research, the global pay-TV market last year grew by 5% and is said to have passed 924.4 million subscribers. Gartner also states that global pay-TV revenues are set to reach $375bn by 2019. So with the pay-TV market proliferating, more and more subscribers paying for content, and pay-TV services expanding across geographic borders, it is more important that ever for today’s pay-TV operators and VOD providers to support subscriber management on a global scale.

Today’s subscriber management systems must be able to support payments without borders. Why? Because there are three fundamental requirements for any pay-TV service and those are signing up customers, confirming the ability to pay and then taking payment. But going global means taking payments in 186 international currencies, from 4 major global credit cards and dozens of e-wallets, as well as supporting local payment methods. There are even mobile-banking systems taking off in Africa and Asia for operators to get to grips with.

If operators fail to properly address payment processing, growth will be dramatically affected and even those with the most innovative TV service will suffer. So how do operators overcome these challenges and ensure they can process payments across borders?

In terms of the fundamentals, payment services need to be flexible and cope with a variety of payment dynamics. This could be anything from immediate payment processing for pay-per-view sporting events (like the Mayweather vs. Pacquiao fight which saw people all around the world paying to watch the match), through to supporting a monthly recurring subscription model for a Netflix-like service.  Payment processing capabilities also need to be adaptable and support a variety of devices, from smartphones through to tablets, PCs and connected TVs.

But it’s the stark difference in taking payments around the world that gets difficult. Credit cards may be seen as the defacto payment method, but according to World Bank, astonishingly only 7% of the population in developing economies owns a credit card – and even then ownership in more affluent European nations only hovers at around 50%. In many parts of Asia, using vouchers for over the counter cash payments for telephone services is incredibly popular and if a pay-TV operator wanted to offer this payment option, they would need to interface with several highly bespoke Point of Sale (PoS) terminal service providers across the region in order to make this happen. (And that doesn’t even take in to account reconciling charges against currency fluctuations and local value added and consumption taxes).

There are also a number of issues to overcome surrounding payment validation and processing for a wider geographic and demographic audience. For example, a pay-TV service broadcasting from the ASTRA 1M satellite casts a footprint over Europe and North Africa covering roughly 42 countries and 26 currencies from Morocco in the south, to Norway in the north. While the Nordic market has high credit card adoption, almost universal broadband and a mature e-commerce mind-set, Morocco is a vibrant economy with rapidly growing pay-TV ARPU and a popular smartphone based banking systems. In this example, if a pay-TV service only accepted Visa and MasterCard credit card payments in Euros, they would be excluding a wide segment of its potential audiences- and would lose out on potential revenue.

Internationally there are hundreds of payment methods and it is up to the subscriber management system to support them. In order to operate across borders, pay-TV operators and VOD providers need a system that can support flexible payments that include micropayments, debit card payments, bank transfers, PayPal, mobile transfers, retail vouchers and a variety of other local options.

At Paywizard we are helping pay-TV operators and VOD providers around the world deliver subscriber management and simple and user-friendly payments. Paywizard currently offers a comprehensive range of payment solutions, supporting 300 payment methods in 100 currencies worldwide. These include pre and post pay models, credit and debit card processing, direct debits, and local payment options such as Ideal card. In recent years, we have also added mobile phone operator integration, cash economy options powered via vouchers, and white-label and branded e-Wallets such as PayPal.

Having recently been to NAB in Las Vegas, TV Connect in London and BroadcastAsia in Singapore, we are seeing that payments without borders really is becoming a must-have for pay-TV operators and VOD providers around the world. As companies extend their services and go global, they need subscriber management and payment capabilities to support them. If these companies fail to deliver on what is seen as a ‘simple’ task of enabling subscribers to pay to watch a film, TV show or football match, then the reality is that these subscribers will take their money to a TV service that can.

Jonathan Guthrie, CEO.