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Getting paid: Building a payments and billing strategy by Mind Map: Getting paid:
Building a payments and billing strategy
5.0 stars - 1 reviews range from 0 to 5

Getting paid: Building a payments and billing strategy


Lex Bayer, Spare Change Payments

Founder & CEO

solely focused on SocNets

Christian DeBaun, PayByCash

Director of business development

managing the Ultimate Card prepaid card

Gene Hoffman, Vindicia

Chairman and Ceo

billing, fraud & chargeback management

handle e.g. all Norton AV products, lots of MMOs, IMVUs, Outspark etc

David Marcus, Echovox


Zong - a mobile payment solution, SocNets and Mobile apps

Paul Thind, Sulake

GM North America


Tim Bachmann


branded prepaid cards

previously head at Target for cards, launched iTunes card

any criteria for apps they'd look at seriously?

Tim Bachmann

criteria is not only # of users, but about user's commitment level & desirability of items

some retailers want to work with growing sites and get their brand in there

a new category to retail buyers

shelfspace is valuable, prepaid cards are great as they have high value, no carrying cost etc

larger purchases are doing well, example: 50 hour card = 80% sales, 20 hour card = 20% sales

Gene Hoffman

you can ask for higher monthly payments than WoW

you are perceived as per your price

lower the price if you can't make it work

best practices

David Marcus

miminize the effort/resistance to buy, it's an impulse buy

people are hesistant to use credit cards, mobile payments can overcome this

Lex Bayer

size of the game != monetization. it's about engagement, not just userbase

collection of items is appealing, females

competition stimulates purchase, males

Gene Hoffmann

upgrade paying customers into recurring payments / subscription, less fraud risk with bigger, less frequent payments

Tim Bachmann

try to mimic cycles of retail, holidays, graduation, father's day, summer peak, right now for X-Mas teaser campaigns, mail blasts --> add the retail card to your gift wish list

Christian DeBaun

target to monetize also international audience, don't have credit cards, won't use them, use an alternate payment provider to capture that money

US vs. International

Gene Hoffman

International, less credit card, more SMS, some countries have very different payment processing rules, e.g. in Brazil credit card payments need the customer to visit a bank physically to authorize it

cultural issues, toothpaste example, for US, position as "your breath will smell better", for Asia, position as "your friends & family will like how your breath smells"

US, subscription works perhaps a bit better

David Marcus

International, mobile payments are very important, hard to monetize with ads

US carriers take a lot higher fee than e.g. Nordic countries

what payment options work best

Lex Bayer

the more payment methods, the better

microtransactions make it easy to sample the product, and ease customers in

Gene Hoffman

A/B test your payment methods

simplify the payment process to avoid customer frustration

tailor your payment pages to show the most relevant payment methods, campaigns, currencies etc

not every customer needs to get the same price for the same product, test, test, test!

don't stop at transaction, monitor chargebacks and fraud

Christian DeBaun

don't leaving building your billing in the last week

work with your bank, paypal, set up merchant accounts, look at the alternative payment providers and test it

Paul Thind

having mobile payments in US has been very helpful for Habbo

fraud protection

Lex Bayer

friendly fraud, users wanting to return goods after using it, assign each user a score, # of payments, # of refunds, developers use it to decide if they want to make a deal with the user or not, users actually want to "un-refund" to get back the buying ability

sinister fraud, people trying to game the system, e.g. fake credit cards, alerts using social graph, fake user profiles (no friends etc)

Tim Bachmann

no issues with prepaid cards, you get paid immediately at the point of sale

Gene Hoffman

lots of fraud management tools were created for high margin, big ticket items

you are hurting yourself turning customers away as false positives as there is low/zero cost to producing virtual goods

chargeback budget is e.g. %1 --> if you take away the really bad guys, this is as much you can be more aggressive in selling

vgoods may be by fraudsters to test if stolen credit cards are valid, due to the low item prices, game operator ends up with a lot of chargebacks

what do about e.g. Eastern Europe, A/B test and see what happens, 15 day cycle to see results, rise of botnets make geographic IP blocking ineffective

David Marcus

mostly seeing "friendly fraud"

do pattern analysis to detect suspicious transactions

hard to do fraud thru mobile

Christian DeBaun

agreed with the other panelists

PayPal & fraud is a big issue, too much of it --> PayPal penalty box with money sitting there for 6 months

offer local payment solutions instead of credit cards for high-risk countries

prepaid cards

Christian DeBaun

especially important to tween and teen audience, credit cards not available, limits payments to allowance money

Tim Bachmann

lots of benefits to extending brand reach to retail, stamp of approval from the big box retails to parents, awareness for the app

if you can master in-store marketing, you increase impulse buys a lot, e.g. in store video, point of sale displays

Gene Hoffman

sales taxes apply also to intangible goods, some states collect it point of sale, but e.g. Texas collects it card redemption, i.e. you might need to be paying taxes on prepaid cards instead of the retailer

Lex Bayer

cards under $5 don't make sense due to fees (e.g. retailer's cut)

users just want to be playing, so remove the friction from paying

David Marcus

82% of people end up using mobile to pay, when offered standard credit card, mobile and paypal payment options

Additional services for developers

Lex Bayer

have a network of paying users at SocNets, can be shared across different apps

customer support, when you start taking money, you need to

Gene Hoffman

have a Professional marketing services organization

Vindicia charges 2% at scale, expect to help the developers, messaging, fraud management, what payments to whom and how

Tim Bachmann

full service solution for prepaid cards

feed back data on what is selling, competitive situation, pricing

David Marcus

user experience team to help developers, e.g. to create mockups for mobile payments

Christian DeBaun

pretty close to offering a turn key solution

240 different countries, 70 different payment types, don't do credit card

prepaid card at 16000 retailers nationwide

fraud management


will there be an universal prepaid card

Christian DeBaun, PayByCash has single card that can be used by all of their partners

Gene Hoffman, Won't see in the US due to highly competitive situation

how to deal with international currencies

Gene Hoffman, try to keep each currency separate, e.g. if a customer pays in euros, the chargeback should be in euros, set up tools to monitor currency exchange rates and update your prices correspondingly

what will be the impact of economic downturn on virtual goods?

gene hoffman, limited impact

Tim Bachmann, opportunity for vgoods

David Marcus, opportunity for vgoods

Christian DeBaun, limited impact

Lex Bayer, unclear