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. These days almost all kinds of media are available on OTT platforms (Over-the-Top). This includes video, music, sports, and even education.
The shift from traditional cable TV to internet based streaming services is majorly because of factors like cheaper internet, better mobile access, faster gsm networks and rise of independent content creators. All these factors have worked as a catalyst 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. Along with that, it can be a cumbersome task to handle prorated billing, discounts, upgrades, and downgrades. All of these complexities demand 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 extensive guide which talks about everything related to streaming media payment gateways. We are confident that after carefully 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 merchant account that allows video streaming companies to accept credit and debit card payments. For subscriptions, pay-per-view, and VOD services. The payment gateway supports a variety of payment methods such as 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 check out page on the OTT screen. The user submits the credit card information or any alternative payment method information and clicks on 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 the subscription billing facility, you can manage the auto renewals easily. 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 must utilize artificial intelligence-based tools to identify fraudulent transactions and stop them. The payment gateway should use 3D secure authentication as well as AVS.
High-Risk Merchant Support: As mentioned earlier in this guide, streaming platforms are considered high risk, and . 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 risk reasons. Videos 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 Times: 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 a fast payout, you will have access to cash flow quickly for reinvestment.
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 hard times finding advertisers. Eventually, internet-based video streaming platforms will become the number one alternative to televisions.
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 will have a very good time for the next many years.
