Streaming Media Payment Gateway: Complete Guide
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- 1 Streaming Media Payment Gateway: Complete Guide
In the last decade, the online streaming industry has seen massive growth, and we are confident that in the coming years this growth story will continue. With the availability of high-speed internet in almost every part of the world, the demand for live streaming and video on demand (VOD) services has increased exponentially. Nowadays, almost all kinds of media are available on OTT (over-the-top) platforms. These include music, sports, and even educational content.
The shift from traditional cable TV to internet-based streaming services is primarily due to factors like cheaper internet, better mobile access, faster GSM networks, and the rise of independent content creators. All these factors have acted as catalysts in the growth of the online streaming media industry.
Accepting credit card payments for streaming media companies is not an easy task. Handling subscription-based payments requires advanced automated billing solutions. Payment failures because of factors like expired cards, insufficient funds, or technical issues can impact the churn rate. Additionally, managing prorated billing, discounts, upgrades, and downgrades can be frustrating. All of these complexities demand the services of specialized streaming media payment processors.
The team at QuadraPay truly understands the challenges faced by streaming media companies when it comes to online payment processing. That is why we have created this guide, which talks about everything related to streaming media payment gateways. We are confident that after reading this guide, you will be in a better position to find the right streaming media payment processor for your business. Let’s begin.
What Is a Streaming Media Payment Gateway?
A streaming media payment gateway is a specialized service that allows video streaming companies to accept credit and debit card payments. It supports subscriptions, pay-per-view, and VOD services. The payment gateway supports a variety of payment methods such as credit cards, gift cards, ACH, and eCheck.
How Does Streaming Media Payment Processing Work?
| Step | Process | Role |
|---|---|---|
| 1 | User selects a plan to make a purchase | Customer |
| 2 | Payment information is encrypted | Payment Gateway |
| 3 | Transaction is verified and authorized | Payment Processor |
| 4 | Payment is approved/declined | Issuing Bank |
| 5 | Funds are settled into the merchant’s account | Merchant Account |
It is important for merchants to be aware of the steps involved in processing credit card payments on a streaming website or mobile app. On the video streaming website, the user can either purchase a subscription or rent specific items. After making the selection, the user sees a checkout page on the OTT screen. The user enters their credit card details and clicks the submit button. The payment gateway securely collects the details, verifies them, and sends them to the right financial institution for approval.
The card issuer checks the availability of funds in the customer’s card account, and if everything is fine, then the transaction is approved. The customer immediately gets access to the purchased item. Funds are transferred to the merchant’s bank account within 2 to 3 business days.
Key Features of a Streaming Media Payment Processor
When choosing a streaming media merchant account, it is important to ensure that it offers features that are critical for any business in the video-on-demand industry. Let us look at a few of these features.
Multi-Currency Support
International video streaming platforms attract subscribers from multiple countries, and that is why it is important for your merchant account provider to allow you to accept payments in various currencies. Your processor should accept transactions in GBP, USD, Euros, Canadian dollars, and Australian dollars. With multi-currency support, a UK-based streaming service that has viewers in the United States and Australia can collect payments in the local currency of the users.
Recurring Billing & Subscription Management
Another feature that a merchant account for a streaming business must have is subscription support. Most streaming platforms offer a subscription-based model (SVOD). With subscription billing, you can easily manage auto-renewals. The built-in dunning management tool sends automated alerts to customers when payments fail.
Fraud Prevention & Chargeback Management
Streaming businesses are classified as high-risk, and this is primarily because of the risk of fraud, including card testing, account takeovers, and chargebacks. A good streaming media payment processor should use artificial intelligence to identify fraudulent transactions and stop them. The payment gateway should use 3D secure authentication and AVS.
High-Risk Merchant Support
As mentioned earlier in this guide, streaming platforms are considered high risk. This is because many of these platforms offer adult content. Many of such platforms often face problems in getting a merchant account. This is because of high chargebacks as well as compliance and regulatory concerns. Many banks avoid working with adult streaming merchants because of reputational reasons. Video streaming merchants should work with high-risk merchant account providers that fully comply with the regulatory requirements while providing merchant services.
Low Transaction Fees & Fast Payout
Streaming businesses generally have a low ticket size, and that is why it is important for the processor to provide services at affordable rates. Along with that, the payouts should also be fast. Choosing a payment service provider that offers services at low rates will increase your profit margin. With fast payouts, you will quickly gain access to cash flow for reinvestment.
Frequently Asked Questions (FAQs) Digital Streaming Merchant Accounts
What Are Merchant Accounts for Digital Streaming Platforms?
A merchant account for digital streaming platform is a specialized bank account that allows OTT platforms to accept credit card payments. Such accounts normally support subscription-based payments. Digital streaming platforms offer a variety of subscriptions that may vary in features like streaming quality, number of channels, number of screens, and number of users. Most payment processors consider digital streaming platforms high risk, and that is why only specialized PSPs support this business model.
How Does Streaming Media Payment Processing Differ from Regular E-Commerce Processing?
Streaming media payment processing and ecommerce processing are extremely different based on features and usage. While ecommerce merchant accounts are mostly used for one-time payments, on the other hand, a streaming media payment processing account is mostly used for recurring payments. Ecommerce gateways are mostly used to accept local transactions; however, streaming media payment processing accounts are used for global transactions.
What Should I Look for in a Streaming Media Payment Processor?
When selecting a streaming media payment processor, you should choose one with multiple years of experience and excellent customer reviews. Streaming media payment processors should offer features like API integrations for your WHMCS platform, PCI-DSS compliance, and comprehensive fraud filtering. If your streaming media includes adult or regulated content, then the provider must ensure age validation and compliance with related regulations.
Can I Get a TV Streaming Stick Merchant Account?
TV sticks are extremely popular these days. And if you are in the business of selling TV sticks, then you will need a TV stick merchant account. Yes, our processing partners provide merchant accounts to TV stick companies. These small devices work pretty much like a digital media center. By connecting the TV stick to a monitor via the HDMI port, one can immediately get access to a large variety of audio and video content. Our processing partners support IPTV and satellite TV-based devices.
Future of Streaming Media Payments
In the coming years, the reach of satellite television will shrink. Television operates on advertisement revenues, and as streaming media platforms are becoming popular, it is quite reasonable to say that soon television studios will have a hard time finding advertisers. Eventually, internet-based video streaming platforms will surpass traditional television.
We will see the acceptance of cryptocurrency payments on streaming websites. Blockchain technology will be used to identify and stop fraudulent transactions. Payouts will be instant because of the use of blockchain technology. Overall, merchants in the industry can expect strong growth in the coming years.