When people outside the adult entertainment industry imagine what it must be like to work in the adult webcam sector, many of them likely never stop to consider the crucial role of online transaction processing, or the companies which provide such services.

Even cam performers who don’t hold merchant accounts of their own are reliant on the stability and consistency of the transaction processing used by the sites, networks and platforms on which they appear. One can’t very well earn commissions on sales which aren’t completed, after all.

As the adult cam sector has grown, catering to the companies, platforms and performers who comprise that sector has become a progressively higher priority to companies like Segpay, which has offered customized billing solutions to adult industry merchants since 2005.

Segpay CEO Cathy Beardsley recently sat down with YNOT to talk about the importance of the cam sector to her company – and about the services Segpay has introduced and developed in response to the growth of the adult cam market.

“Cam business represents close to 50% of Segpay’s volume, so we have invested a lot of time on solutions for this growing segment,” Beardsley told YNOT, as she listed some of the options Segpay has crafted with the cam sector chiefly in mind. “Post Pay offers a pay as you go model for consumers. This allows models to keep earning as they engage with their consumers. We have developed a model/affiliate payout platform to help cam site owners pay their models. We also have spent a lot of time on fraud mitigation tools such as customizable velocity checks, white listing of good consumers, 3D secure and card verification – to make sure only good transactions get through, so models can rest assured that they have solid, paying consumers. Last year we introduced an amount verification feature allowing merchants to ensure that a consumer legitimately owns the credit card they’ve submitted.”

Sometimes, one billing innovation leads to the need for the development of another. For example, while short-term trial offers and other specials are good hooks, some consumers have learned to ‘game the system’ by repeatedly signing up for offers which were supposed to be for new customers only. To give their clients a means to restrict certain offers to true first-time purchasers, or to enforce a limited time discount, Segpay introduced “Single Use Promos.”

“Single Use Promos allow cam merchants to create one-time or limited time discounts that can boost sales without consumers ‘abusing’ the offer through repeat purchases,” Beardsley explained.

The details of how Segpay’s ‘Post Pay’ option works demonstrates the depth of thinking which goes into the development of transaction processing tools – including the extent to which companies like Segpay design their tools and functions with specific sectors of the adult market in mind.

“Post pay was designed specifically for cam sites to give merchants more control over how they authorize and settle purchases, lowering chargeback risk while offering their consumers a better buying experience – because they know they’ll only pay for the time they actually use,” Beardsley said. “Merchants can authorize a specific amount up front, which the consumer cannot exceed while making smaller purchases. Merchants ensure the credit card is valid and has sufficient funds.”

Much of what Post Pay does to limit a merchant’s exposure and reduce the risk of chargebacks comes into play after the initial authorization of the transaction, Beardsley noted.

“After the authorization, the merchant tracks the consumer’s spending and when the consumer finishes – or reaches the amount authorized – the merchant captures the total amount used and finalizes the transaction,” Beardsley said. “Post Pay bundles multiple small sessions into a single capture, helping limit refund or chargeback risk by simplifying the consumer’s credit card statement. Even if the consumer purchases multiple sessions, his/her statement shows only one. The simplified statement reduces likelihood of a chargeback, and even if a chargeback happens, it counts as only one instead of multiple (in cases where each session shows as a separate charge).”

Despite (or maybe because of) the crucial role they play in the online adult market, billing companies like Segpay often take a lot of heat from adult merchants who feel such companies overcharge for their services. In many cases, these merchants probably don’t fully appreciate just how much of a burden their billing providers are shouldering – including handling complex compliance issues and the data security challenges which are part and parcel of the online environment.

Beardsley also noted that merchants’ costs are in part dependent on the proportion of billing-related tasks the merchant handles directly, as opposed to those they rely on billing companies to take care of on their behalf.

“Payment processors such as Segpay provide a service that allows merchants to offload as much of their billing-related tasks as they like,” Beardsley observed. “The more of the payment work they want to offload, the higher the fees. Good processors provide value for those fees in the form of reporting tools (sales summaries, chargeback/reversal status, projected revenue); user management, affiliate programs, customer retention tools, consumer billing support and more.”

Merchants sometimes simply aren’t aware of the expenses billing companies incur in assuring compliance with regulations – a set of hoops that only seems to grow in number, year by year.

“Segpay invests in data security through extensive PCI audits each year, and ensures compliance with new regulations such as GDPR, UK Age Verification, PSD2, so merchants know they have a trusted partner,” Beardsley said.

Compliance with the rules set by credit card companies, banks, governments and other entities is no minor matter, either.

“We invest in third-party tools that ensure merchant websites are in compliance and in good standing with Visa or MasterCard,” Beardsley said, noting that such compliance “can be the difference between a merchant staying in business or not.”

“Segpay leverages third-party tools to strengthen our own risk systems with more information to help us make good decisions about the transactions that process through our system,” she added.

Just like the merchants they serve, billing companies like Segpay need to constantly evolve and develop, whether it’s in response to changes in the market, changes in regulatory framework, or even changes in the economic and political relationships between countries.

“We will soon be adding an additional US bank, along with alternative payment methods and a revamped Merchant Portal that will look and perform better,” Beardsley revealed. “We are opening an Ireland office which we expect to be licensed later this year, which will help protect our merchants in the event of BREXIT. We will be implementing 3DS 2.0 to ensure PSD2 compliance before the September deadline.”

While billing and transaction processing may not be the first thing that comes to mind when adult cam performers make a mental checklist of things they need to consider in planning the path of their careers, establishing an effective payment solution is every bit as mission-critical to their success as crafting an engaging on-camera persona and building a fan base. Far more than a mere gateway through which money passes from consumers to merchants, companies like Segpay provide an essential link between entrepreneurial aspiration and commercial achievement.