Saturday, July 5, 2008

Evaluating Payment Systems - Introducing the Payment Systems Viability Index

PaymentGuy is please to announce the launch of an innovative new approach to evaluating payment systems; the Payment Systems Viability Index ("PSVI"). PSVI is the first system developed exclusively for evaluating payment systems for online commerce including the sale of real and virtual items, subscriptions and memberships. PSVI is an analytical tool allowing web site operators including MMOG and virtual world operators a fast and easy way to evaluate their existing payment method mix and predict the impact of deploying additional payment methods and make recommendations on improving the performance of payment systems.

The Payment System Viability Index was developed:

1. to identify the strengths and weaknesses of current payment systems;
2. to support business strategy for internationalization and new market development;
3. to measure the impact of changes to payment methods and systems; and
4. to find optimal payment systems per market;

How it works:

It works like a simple exel so anyone can use it. After inputting the relevant data into the PSVI framework including customer and demo target group coverage, revenue share, method responsiveness, usability and risk factoring the PSVI will score how many end-users will use the existing payment method mix or system and evaluate the ability ofthe method mix or system to generate profit for the web operator. PaymentGuy will be blogging more about the PSVI methodology in other posts so stay tuned.

If you want to learn more about the PSVI, contact

Tuesday, July 1, 2008

Second Life Needs More Payment Methods

From; "Second Life users spending more time in world, but are they paying?
Cyndy Aleo-Carreira 07.01.2008"; Wagner James Au found some interesting Second Life data points buried in Linden Lab's economic statistics for the virtual world, where users find information from the financial state of the company to exchange rates for in-world currency. In the numbers, the average price for land shares in Second Life dropped from 3.23 Linden dollars (L$) to 2.86 L$ per acre. But an even greater concern for Linden Lab is the ratio of user hours to premium subscribers. Paid subscribers (those who pay a monthly fee for the privilege of spending more money on land rights) have been on a steady decline since December 2007, while the total number of hours users spend in-world has been on a steady upswing over the same period. It doesn't take Alan Greenspan to know that a larger user base spending more hours in-world without paying for the privilege isn't a trend Linden Lab wants to see, which might be why there has been no announcement on their blog of the latest figures. Linden Lab can always hope that some of those non-paying users convert to premium subscribers, but with the U.S. (Second Life's largest user base, with almost 37% of total accounts) economy sagging, spending money on a virtual life may take a back seat to the real one."

Bottom Line: Linden Lab is not monetizing the international non-credit card-using markets with alternative payment methods like online banking, prepaid cards, telco billing and sms. If Linden moved beyond credit cards the SL Resident L$ buyng % would rise and there would be more premium subscribers who would opt for premium accounts rather than the occasional and infrequent L$ purchases (from 3rd party Lindex vendors who do provide alternative payment methods).

Apaja Co-operates With Sulake - Prelude to PlayRay Becoming Part of Sulake Inc?

From Asmo Halinen's blog about "Co-operation with Sulake June 28, 2008 – 11:22 pm;
We have just started an interesting co-operation together with Sulake and its social networking service IRC-Galleria. Part of Aapeli’s online gaming catalogue is now accessible straight from IRC-Galleria as well. The players from IRC-Galleria and from Aapeli end up in the same gaming space, with IRC-Galleria based users marked with their own unique G-icon in the gaming lobbies. The collaboration has received a good acceptance from the users and we already have some preliminary plans how to enhance this thing further."

PaymentGuy has heard from insiders Apaja has been looking to shop itself to Sulake for some time now. Maybe this is the first step towards an aquisition - feeling each other out. Sulake, following its bizarre IRC Galleria acquisition, could use a property like Apaja's Playray to boost its portfolio and achieve its goal of an mmog / virtual world publisher. Apaja management is no doubt drooling at the possibility of a Sulake IPO - that has been promised every year for the last 4 years now so we will see - meaning they are likely willing to accept Sulake shares for Playray like the IRC team did rather than cash.

So, the good and bad. GOOD thing is Playray is more compatable to HABBO than IRC. The bad, 1. Sulake's all-Finn management seems to have trouble working with non-Finnish partners or making non-Finnish title / property acquisitions, and 2. it is still an open question whether 3 Finnish small fry can create an industry big fish success like Penguin or Webkinz. Interesting anyway. Stay tuned ...

Sunday, June 29, 2008

Merchant Accounts

Every business small, medium or large needs a merchant account. Today, it really doesn’t matter what your individual business is, if you are in retail or even low volume wholesale, then you can enjoy increased profits from the ability to accept credit cards. Markets change, however they may grow, and the internet has been hailed as the biggest contributor to their expansion. To say that the success that credit card processors and banks have had a fair shot at traditional, brick and mortar businesses is a fair assumption based on the thirty years that credit card processing has been available to businesses in the United States. The internet has made the transition for those businesses as well as new internet based businesses to thrive in international markets. Whether your business is product or service based, there is a market; in fact, some industries rely on the internet for their entire market. These types of businesses have bridged gaps between international and domestic business in that they have forced consumers to cross borders for their products and services.

The unfortunate reality of ecommerce is that while the businesses may be completely legitimate, they pay rates generally reserved for truly high risk businesses by banks and processors, daily. Domestic banks see ecommerce as high risk; their customers, a mystery and the business transcendent. The regulations that rule and preside over merchants and their credit card processing capabilities are antiquated to say the least. To say more is not necessary. Merchants have found ways to keep their processing fees low, or lower than traditional methods. Just as the internet brought together merchants and their customers, it has connected the very same merchants with international banks and processors that offer competitive rates while letting them enjoy higher volume limits and less restrictive regulations. Merchant service providers are a great resource when it comes to acquiring an international merchant account. Unlike many domestic banks and processors, they foster many relationships with banks worldwide with the ultimate goal of successful integration for each and every business that shows interest in their processing solutions. One of the keys to their success is no secret. With that much versatility, merchants can actually have a custom tailored credit card processing solution just for their business. They can offer full integration with the processor through them within seven days and services such as virtual terminals, third party fraud scrubbing, 3D secure processing and real-time reporting. With so many options out there, it will benefit the merchant the most by contacting a few merchant service providers and choosing the one that best fits your business and works within a time zone that you can live with. Another factor that separates certain brokers from others is that some specialize in certain industries and even businesses. For specialized industries, finding a merchant service provider that works your busy hours, can identify, help resolve and even protect your business against chargeback’s is one of the greatest assets you can have as a merchant.