How Evolving Online Payment Options Change the Buy Process

Email

Print

The landscape of ecommerce is evolving, especially for transaction processes involving software or digital goods.

With the advent of alternative online currencies (possibly most notably known by Facebook credits or Farmville credits, etc.), people are inclined to relinquish real dollars for digital currencies that can be used to purchase software or digital goods.

Industry Stats

Let?s take a closer look at (both your and my favorite) Farmville. “In Zynga?s FarmVille game on Facebook ? you can buy a hot rod tractor that can help you grow your crops faster. While FarmVille is free, you pay for the tractor using real money via credit cards or other payment systems.” (Source: VentureBeat/GamesBeat)

“? things have been slower to take off in the U.S. Last year, however, games on Facebook, MySpace and other social platforms finally started generating a lot of revenue. Inside Network estimates virtual goods revenues in 2009 were $1 billion.”

?Virtual goods are expected to hit $1.6 billion in revenue in the U.S. in 2010, according to a report from Inside Network. The most interesting part of that number is that social gaming startups ? which didn?t exist three years ago ? will account for about $835 million of that total, said Justin Smith, founder of Inside Network and co-author with Charles Hudson of the Inside Virtual Goods report.?

Evolving Pay Methods

Within the industry, lead generation (acquiring contact information of potential customers) is also showing to be of value in exchange for real dollars. Commonly, when executing lead generation campaigns, the cost-per-lead and the cost-per-click are basic metrics that always come into play (as well as derivative metrics thereof).

With some businesses working in tandem to sell software and digital goods with companies that have an objective of acquiring leads, a new process of payment is evolving. This is an alternative for Jane and John consumer to pay real dollars for something they need. Instead, they provide contact information to a 3rd-party in order to receive software or digital goods. The 3rd-party then pays real dollars to the software or digital goods company.

Taking a look at this process:

• Company A needs to sell software or digital goods
• Company B needs to acquire leads
• Consumer X wants Company A?s software or digital goods
• Company A requires Consumer X to provide contact (lead) information to Company B
• Consumer X receives software or digital goods
• Company B pays dollars to Company A

In a nutshell, here?s what I mean?

(This graphic was made by yours truly, using wicked PowerPoint and Paint skills — circa 1995)

Unclear of what I am talking about? TrialPay is one company providing an alternative consumer payment service. ?TrialPay works with thousands of software, social games and digital goods providers and has served 60 million users across 100 countries. TrialPay invented this ad-funded payment model back in 2006, giving rise to the next wave of online payments and advertising.?

The TrialPay process is similar to that noted above. Additionally, see @socialnetworkad‘s list of virtual currency providers.

What Would You Do?

Knowing that non-dollar options could continue to become more prevalently available for you (as a consumer) to acquire software or digital goods, would you be willing to exchange your contact (lead) information instead of paying for the software or digital goods with dollars?

If so, what is the minimum or maximum you would be willing to offer your contact information for (it is assumed you would also be placed on the email list to receive regular emails from Company B), as opposed to traditionally paying for the software or digital goods with dollars?

0saves

Save

If you enjoyed this post, please consider leaving a comment or subscribing to the RSS feed to have future articles delivered to your feed reader.

About Brandon Prebynski

Brandon Prebynski has implemented global business development and marketing strategies for some of the world’s most recognized brands. He currently manages digital and social media initiatives for a high-tech company in Silicon Valley and produces content and events at Robot Superhero. (more..)