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Why Netflix Is Introducing More Payment Options Internationally


Oct. 14 2016, Updated 6:04 p.m. ET

Netflix’s payment systems

Netflix (NFLX) acknowledged during its fiscal 2Q16 earnings call that as it expands rapidly into international territories, payment systems in these territories aren’t developed equally. For example, in markets such as the Netherlands, payment platforms were very well developed. But in developing countries such as Vietnam and Cambodia, Netflix accepted payments only through international credit cards.

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The company reiterated at the Goldman Sachs Communacopia conference that it was looking to add more “local payment options” internationally. According to a Wall Street Journal report from late last month, in an interview with Neil Hunt, Netflix’s chief product officer, Hunt said that in international markets, the company had observed an uptick in people signing up for Netflix through its mobile app (application) and not through the website.

As a result, the company was adding mobile payment platforms by partnering with Apple’s (AAPL) iTunes and Alphabet’s (GOOG) Google Play. The company has also started offering gift cards to make it easier for people to subscribe to Netflix. It’s been partnering with local telecom (telecommunication) players such as Orange (ORAN) in France to make use of its billing infrastructure.

Netflix doesn’t believe payment systems in various countries will be a problem in the long term. The company had international streaming memberships of 36.1 million at the end of fiscal 2Q16, as you can see in the above graph.

Early this year, Netflix’s chief financial officer David Wells brought up the topic of bitcoin payments at the Citi Internet, Media & Telecommunications Conference. He said, “It sure would be nice to have bitcoin in terms of a global currency that you could use globally.”

Why did Netflix mention bitcoin?

According to Netflix, viewers can pay for Netflix subscriptions through gift cards or prepaid cards in countries or territories where there’s no credit or debit access. The reason Netflix mentioned bitcoin was because having various methods of payment makes Netflix susceptible to payment fraud, different rules and regulations across various countries, and the problem of making payment systems compatible with various banking structures.


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