Past Events - Payment Issues & Innovations Oct 20
Commentary on ODA Webinar on Payment Issues & Innovations
This Online Dating Association webinar held on 13th October 2020 addressed “payments”. The original ODA Code of Practice and subsequent guidance and good practice addresses the importance of clarity and straight dealing around how dating apps and services are paid for. To date the payment model has been based on subscriptions of one, three or six months durations or/and advertising funding to give users a free or reduced cost option.
The session recognised the challenge with services when there might be a four to one ratio of users registering and not making direct payments to those taking subscriptions. This issue is brought into sharper focus when we see there is a sharp distinction between the reluctance to pay from younger users – a service’s future lifeblood – and older users with a higher propensity to take longer term subscriptions and use services as a social asset over longer time frames.
The nearly total “move to mobile” was a related consideration: with around 70% of activity on mobile devices raising questions on whether mobile users and ”apps” as a product per se were more acclimatised to subscription and micropayments for a greater variety of richer content in terms of video dating, streaming and other activity with much in common with social media platforms.
That, in turn, invited conversation on the control Apple and Google/Alphabet have over what can be offered in app form and the commissions or other charges applied and whether mobile payments in the form of “direct carrier billing” was an alternative or a supplement to app stores and subscriptions.
Newly launched Coalition for App Fairness
Sarah Maxwell from Coalition for App Fairness (CAF) introduced the coalition which is the first of its kind and launched a few weeks ago. It was created because large and small apps experienced discrimination and anti-competitive behaviour and a level playing field is needed. CAF have 10 app store principles and Microsoft have followed suit and introduced their own in line with CAF’s. All app providers are welcome to join the coalition to grow the collective voice.
Dating apps experience is different to those of many other apps given that in some cases a subscription may only be required for a short period. In the area of security and privacy, Apple can prohibit under 18s from joining as they are aware of the age of phone users.
There is currently no set timeframe for CAF to fulfil its aims with various factors that could affect this already coming in to play – regulators are taking notice and different legislation in January could change the landscape.
Additional revenue streams and payment models
Jim Bugden from ParshipMeet Group gave an overview of the new company structure explaining that portfolios are quite different and diversified. Video is powering gifting and ParshipMeet has its own video platform in vPaaS. Virtual gifts are sent to engage streamer. One to many service compliments dating services. This may not result always result in dates but it helps combat loneliness and increases interaction.
Gifting is made via in-app purchases or on desktop via credit card/Paypal.
vPaas currently manage the Plenty of Fish video streaming. There is a full moderation solution with sophisticated AI removing inappropriate content. Every few seconds streams are being screenshot and moderators checking. Report buttons are in place. ParshipMeet want to go beyond industry standard when it comes to safety.
Only 10% or less of subscribers will pay and vPaas offers an alternative model.
Opportunities offered by Direct Carrier Billing
Simon Coates explained that GlobalCharge focus on Direct Carrier Billing (DCB) and process 1 million transactions per month working with well-known brands like Bumble and Badoo. DCB is available on all smartphones/feature phones which opens up opportunities to reach far more people than relying on those who have a credit card. Simple payment flows mean conversion rates can be 5 to 10 times higher than credit card options. The security benefits mean no personal data is needed from the user and there is limited scope for a user to deny knowledge of a purchase. Frictionless and secure it helps generate significant revenues in the dating sector and is the online payment of choice in many countries.
Shahzad Younas from leading Muslim dating service, Muzmatch, said that the Muslim market is years behind the mainstream market partly because of involvement of family in the relationship process and religion. India is a difficult market to monetise but there is an appetite for digital payment. People’s ability to pay is not high, so payments and appetite for apps are the biggest challenges. Tinder and Bumble are moving into this market and this will make a difference.
Duncan Cunningham from Dating Lab explained that revenues worldwide for his services come from over 40s. Monetisation of younger age groups who are the biggest users of dating services is key.
Final comments – what will change in 3 -5 years?
Simon Coates – Open banking will grow. Frictionless payment processes will expand.
Shahzad Younas – Progress on monetising younger people.
Jim Bugden – More video dating. And a move in monetisation away from traditional subscription model.
Duncan Cunningham – One size payment model doesn’t fit all. Pricing based on user profile. Some resolution on app charges: the work of coalition is important.
Sarah Maxwell – More pressure will be applied to app stores in next 12-24 months. Meaningful change will give customers and providers better options.