This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
The Changing Landscape of Online Payments
When writing a business plan for an online game, the acceptance of online payments brings a host of considerations that must be addressed including revenue deferral, the managing of fees and rates, tax liabilities and value added taxes, and the ever present issue of fraud management.
In a panel moderated by K2 Networks’ David Lee, Rob Uhrich, Senior Director of Digital Markets at PaymentOne, Shane Happach, Business Development Manager for Global Collect, Peter Huang, Senior Director of Web Technology at Trion World, and Edward Sullivan, CEO and Founder of Aria Systems discussed some of the billing concerns that publishers of online games face in a global market.
In the United States the monthly subscription model is the most successful, but in Asia the micropayments model is more prevalent, Huang noted. However, as Happach explained, micropayments are problematic because customers are making multiple small purchases rather than one large transaction. Credit card merchant fees make this impractical and online publishers have had to work around this by selling fixed amounts of in-game currency or company scrip such as Wii points or Microsoft points.
Another issue for publishers to consider is the varying payment methods that exist across the globe such as credit cards, PayPal, regional debit cards, and bank transfers. “Giving more payment options can be a competitive advantage,” Uhrich noted. Accompanying the acceptance of credit card payment is the matter of Payment Card Industry Data Security Standard (PCI DSS) compliance. PCI is an industry standard created to prevent credit card fraud and businesses that accept credit card payments must adhere to it or risk losing their merchant account.
Complicating things for online publishers is the enormous rate of chargebacks that they must contend with. A chargeback occurs when a customer disputes their credit card bill resulting in the merchant being responsible for payment along with a penalty fee. Because refunds are cheaper than chargebacks, Sullivan urged publishers to have a system in place for crediting customers forward. He also emphasized keeping detailed records to use as evidence when disputing chargebacks. “There is an unlimited downside to fraud and chargebacks,” he warned.
Latency can kill online games. How do we make sure this does not happen?
In Shannon Posniewski’s earlier presentation, he noted that one of the top customer support tickets that online games face was over frame rate problems. Focusing on network latency, Vlad Ihora, Head of Gaming Community at TeliaSonera International Carrier described what publishers should look for when choosing an IP carrier for their online games.
Ihora emphasized the necessity for a carrier to have full ownership their networks, ensuring their optimal configuration along with wide coverage, extensive bandwidth, and private peering with other Tier 1 networks. He urged online game publishers to look at the various broadband carriers within their target territory and then examine whom these carriers were getting their IP service from. “You have the power of dictating how your service is configured,” he said.
Audience members wondered if there was an advantage to using lower cost “best effort” networks in which traffic load dictates the rate of data packet exchange. While acknowledging that it is impossible to eliminate latency, Ihora responded that networks with guaranteed service and minimized packet loss justified their higher costs by providing players with the most satisfying game experience.