Billing on Mobile

…at least five evidently – and you’re right it’s not funny, especially if you are a mobile app developer trying to build and maintain apps for the growing smartphone market. Google recently revealed high levels of fragmentation in their Android platform and has now announced their own Nexus One handset that uses yet another version of the operating system.

After little more than one year Google have announced over 5 notable Android platforms, 3 of which they strongly recommend app developers support. With all the current hype around mobile apps this is a bit of a reality check for developers hoping to keep things simple and cost effective.

Their “platform version report” can be found on the device dashboard of the Android Developers website. It shows that app developers should at least support versions 1.5, 1.6 and 2.0.1 of Android to reach 96% of customers. To further complicate things the latest range of Android phones, such as the Google Nexus One or Sony Ericsson X10 feature higher resolution screens, which app developers will need to account for in addition to the other new capabilities in version 2.1 of the platform.

But could the Nexus One phone actually help reduce fragmentation rather than making it worse? By introducing their own reference phone Google are effectively raising the bar and giving sharp focus for future Android app development. Developers will naturally tend to release apps on the Nexus One first, which will force other Android handset manufacturers to keep current in order to maintain good compatibility and market share.

Even if the Nexus One solves Android fragmentation it still doesn’t overcome the cost of developing apps across all platforms including Apple, Symbian and Microsoft. Fragmentation is a major part of developing apps for mobile today and is something that needs to be factored into the costs of developing and maintaining any mobile application. For example, to just target the Apple and Google markets an app developer should be looking to build and maintain at least 6 variants (3 each for Google and Apple). Considering these escalating platform costs and the very low sales numbers from the app stores being reported by many developers it makes it crucial to have your market accurately targeted and your business model finely mapped out.

And this is not limited to Android. Although Apple appears to do a better job of upgrading their iPhone platform by retaining tight control over the hardware even they have fragmentation – app developers already need to consider the iPhone 2G, iPhone 3G and iPod Touch. Then there is the big list of bugs resolved in each version along with changes in fonts between 2.0 and 2.1. Apple updates have tended to be bigger and less frequent but innovation has been much slower as a result.

Although you may have a big urge to dive in and develop that trendy app, the wise developers are now looking to the web – both as a way to deliver services without developing apps and as a way to directly sell the apps onto open handsets (i.e. everything except Apple). The web uses standards that work across all handsets and don’t require lengthy approvals to get live – in fact you can be set up and selling in minutes in most countries – see Bango Payment for details. Mobile browsers are getting richer with more functionality as screens get bigger, touch interfaces evolve, Javascript and AJAX work and projects like Google Gears and Bondi are standardizing Javascript APIs for browser access to on-handset services traditionally only available to an application – and even then in different ways depending on handset.

Advancing browser technology on the PC has enabled fully featured “web applications” – there is even a new version of Microsoft Office coming that will run *IN* your browser. With the accelerating pace of mobile technology, it won’t be long before mobile apps will be web based by default.

Google uncaged the best mobile platform for innovation with Android and is now whipping it into the lead position with Nexus One.

There’s great news for O2’s 21 million strong customer base who can now all benefit from the industries fastest single-click Payforit payment experience – thanks to Bango. This includes the wide range of smartphones and significant number of Apple iPhone, Windows Phone and Palm Pre users connecting over O2’s internet gateways.

Customers with smartphones that pay via operator internet gateways using other billing solution can be presented with a poor experience – they may be declined, encounter problems or see additional screens prior to payment. All of which results in significantly lower sales conversion rates and loss of revenue.

By delivering full automatic billing authentication across all network connections on O2 as well as Vodafone, T-Mobile and Three in the UK, Bango consistently provides the best single-click payment experience on all handsets and networks, making it easy for customers to pay on their phone bill every time. Even customers browsing over a Wi-Fi connection are able to pay on their phone bill.

Providing customers with the quickest and easiest way to pay for your mobile content and services is essential for you to sell more and this is just one of the ways Bango gives you 25% more sales than any other mobile billing solution.

Selling your mobile app could not be simpler, you just send it over to your favourite App Store and it gets published to millions of eager consumers – it’s all part of the App Stores 30% revenue share. They take care of all the complex stuff such as secure app delivery and rights management etc.

Well, it appears that’s not the case and people with wooden legs, eye patches and hooks for hands are running riot over at the Apple AppStore. Breaking news already reveals two stories about mobile app piracy. First Mobile Entertainment reported that the creatively titled iPhone developer “Smells like Donkey” revealed its Tap-Fu game saw piracy levels above 80% in its first week of availability. ME then reports that “Fishlabs” revealed its new Rally Master Pro 3D game for the iPhone has been hit by a 95% piracy rate on its first day of availability. I’m sure these initial reports will trigger more over the coming days.

So who should you trust to sell your apps? Well if it is an open system like Android, BlackBerry, Palm, Symbian or Windows Mobile simply sell your apps and content yourself – it’s actually quite simple to take control and reap the benefits – it really is the best way to maximize your sales. By integrating just once with a mobile billing provider like Bango your customers can easily buy using their mobile phone bill, credit card or PayPal internationally.

You will get paid promptly and reliably. As you’re a grown-up, you don’t have to ask Apple’s permission to sell your product, you decide the price point, you see real-time sales and revenue figures. Oh, did I say you get paid promptly and reliably? Some billing methods like credit card will pay you 80% or more of what your customer pays. Even some enlightened network operators will pay you 80% at some price points (thank you, UK carriers). Even if you can only collect 60% of what your customer pays, you will get paid…..that’s right, promptly and reliably. Try it!

If rumours are true, then we can all expect to see more consumers in the USA browsing the web from their smartphone and making purchases soon. According to The Boy Genius Report from September AT&T will provide customers with a suitable data plan for their smartphone.

The high cost of data has long been known to reduce the number of consumers browsing the web from their phone. Reports have shown that people are reluctant to browse, buy or download because of the high data charges and the failure of operators to successfully promote and sell separate add-on data plans to their customers.

In contrast, AT&T has shown that customers with iPhones browse the web far more frequently and that part of the reason can be attributed to the included data plan – it removes the risk of running up high costs. By providing all smartphones with data, AT&T are opening up the full potential of the web to their smartphone customers – a good thing for all.

Some of the other operators are already starting to follow a similar path, further accelerating growth in web browsing from mobile phones. It removes consumer fear of excessive charges and encourages them to browse and buy more. Bango Payment is already optimized to deliver the highest sales conversion rates from smartphones to give you the maximum benefit from AT&T’s decision. Removing blockers to browsing also allows mobile advertising to grow quicker, generating additional revenues for operators and brands alike. Bango Analytics is the most accurate way to measure these mobile marketing campaigns, especially as consumers switch their smartphone connection between their operator network and wifi.

During peak shopping times on August 3rd, the entire PayPal billing system failed, blocking consumers from making purchases for over 4 hours. The significant duration of the outage and the fact that the last major outage was just over a month ago prompted their SVP Technology to issue a personal apology on their blog.

While Paypal has comparatively little usage for mobile transactions, Research In Motion’s Blackberry customers will not have been able to complete a purchase during these outages. A pity they cannot offer carrier payments - in fact billing reliability seems to be a challenge for most brands app stores, based on customer feedback about the Android apps store, the Ovi content store, and the RIM store. Even the iPhone app store only allows you to pay Apple using a credit card, and not simply pay direct to your mobile phone bill.

For Bango customers it was business as usual as millions of consumers continued to successfully pay for content while PayPal rushed to solve their problem. This is because Bango Payment does not depend on any single payment method, but rather provides a unified solution that delivers a range of billing methods - from operator WAP billing, premium SMS and credit card as well as PayPal. When Bango detects a billing method outage it automatically prevents it from being presented to consumers. This ensures your customers always get the best experience and that they can pay.

The popularity of Smartphones and high end  mobile devices, such as Blackberries,  the Apple iPhone, Nokia Series, means that Wi-Fi is appearing more frequently as a user connection method accross a range of handsets. In fact  Bango has recently released some stats showing that over 20% of people visiting web sites to purchase content using their mobile phones, are now connecting via Wi-Fi.

By tracking connection methods and conversion rates using its mobile analytics technology, Bango has seen that over the last year on average one in five connections is now via Wi-Fi or other non-operator network. Customers connecting in this way cannot be authenticated to pay using simple operator billing, and this becomes even more complex as customers now easily swap between connections at home, in the workplace and in a variety of public spaces, which results in an inconsistent payment experience that slashes conversion rates and kills marketing ROI.

But although Wi-Fi presents a major challenge to both content providers and mobile operators, it also delivers some great rewards. “These Bango statistics are both a warning and an opportunity for mobile businesses to ensure their mobile billing solution can secure the same high conversion rates from the growing number of Wi-Fi connected customers” warned Ray Anderson, CEO of Bango. By doing so mobile businesses can start to market and sell mobile services to them and capture revenue from this growing segment of their customer base.

For this reason Bango has been working closely with mobile operators and content providers to develop a unique mobile billing technology that allows customers connected over Wi-Fi, and other non-operator networks, to continue to benefit from fast, consistent, operator billing. With operator billing delivering the highest payment conversion rates for mobile content, now is the time to start capitalizing on the great Wi-Fi opportunity.

A full copy of Bango’s Wi-Fi market stats can be downloaded from www.bango.com/wifi

Not our words but this comes from Konny Zsigo of the Wireless Developer Agency.

“If you’re trying to make money selling consumer games and apps, it’s time to dump your iPhone strategy and march straight back to the cellular phone carriers and beg them to take you back.” Strong words!

I think quite a few developers are starting to learn this lesson themselves. Konny’s angle is that if you are a publisher and are paying for licenses, build quality products, QA them and then pay to market them, you need to make a return on your investment. The iPhone is a paradox; it’s both a blessing and a curse for the content industry.

Of course, there is an alternative to begging the mobile operators to take you back. Why not take control and market your digital content directly to mobile visitors. Build a mobile website and promote through your existing marketing channels but also consider mobile advertising and search.

Then charge for content by integrating with a WAP billing service. You can detect mobile visitors hitting your PC website and deliver them the mobile service with a mobile friendly billing system like Bango’s seamlessly integrated into the flow.

It makes sense to cross-promote in other channels so tell your PC visitors that you have a mobile service, promote in email campaigns, I’m sure you can think of lots of other places you touch your prospects and customers.

There’s no reason why you can’t be on the carrier deck AND have a direct-to-consumer mobile service. Many of the top entertainment brands do just that!

Probably not but some doubts are now circulating as to whether it makes sense to focus all your efforts on selling mobile content through app stores.

John Strand of Strand Consult, who’s been advising mobile operators on strategy for many years, is once again making us all sit up and question:

Is Apple’s App Store really such a large success as the media write, or is it simply one of the many solutions that are being overhyped?

Here’s what John Strand says:

“If you were to evaluate Apple’s App Store and the cash flow it generates, compared to the global market for premium mobile applications, our analyses show that the value of the premium mobile services market in Norway is larger than the total global value of the premium services being sold via Apple’s App Store. In Norway, the population of 4.3 million people spent 120 million Euro on premium mobile services.”

He has a point, don’t focus on developing apps for just one handset as you’ll be missing out on the wider market. Also is developing an app the right thing? There’s a great article over on Mobile Marketer: Choose wisely: Mobile application or Web site? which is definitely worth reading if you’re unsure which route to go down.

If you want to build a revenue stream from your digital content though then it’s important to cover as many handsets, on as many networks and countries as you can. That’s where Bango mobile billing can help you….

It comes as no surprise that Nokia will not have operator billing when it launches its Ovi App Store next month to a potential market of 50 million users on 25 devices (read the story in The Washington Post). Nokia had originally said that it would offer operator billing in nine countries including the US.

Why doesn’t this surprise us? Because at Bango, we know how hard it is to integrate directly with an operator and offer seamless mobile billing for content. Having a seamless billing experience will be really important for Ovi consumers and an opportunity to replace the rather poor experience of its Nokia Download Store with one that reflects the pre-eminent position Nokia has in the mobile marketplace.

It’s important not just to consumers who will appreciate the ease and speed of single click on phone bill payment but Nokia will benefit because the conversion rates are much higher. In our experience, a trusted brand should expect 30-70% of users to convert and Nokia should be a the top end of this range.

When it launches, the Ovi store will offer credit card payments. From our statistics, conversion rates are much lower at 10-20%. Its important for any app and content store to offer a variety of payment methods and provide on-bill payment as the default in countries where it’s available.



Don’t be fooled by the success of the iPhone App Store into thinking that there’s no point having operator billing. It would have been even more successful if it’d had AT&T billing wrapped into the store for its US consumers. T-Mobile must be thinking the same thing about the Android Marketplace!

There were some great questions posed by content providers wanting to understand the US mobile opportunity at the Bango webinar last week and we thought it would be great to share these with everyone. 

Questions - The US Opportunity webinar, 21 April (Watch a recording here)

Q: Does AT&T allow payment via credit card through Bango?
A: For any service where operator billing is activated, you cannot offer alternative billing methods. Where operator billing is not supported, you can. For example, audience restricted content, or where a customer is unable to make the payment on their phone bill.

Q: Does WAP payment avoid the carrier rev-share in the North American market?
A: When using operator billing, the operators participate by taking a revenue share. However the improvements in conversion rates, improved user experience and reduction of customer refunds obtained using WAP billing increases your success rate which in turn will increase your overall revenue.

Q: Would we require a dedicated Shortcode to enable us to use WAP billing in the US?
A: Billing is done without Premium SMS so you don’t require a dedicated shortcode for the Bango solution. Bango provides the shortcodes required for subscription renewal messages, or you can use your existing shortcodes if you prefer.

Q: I understand Credit card is a way around the adult restrictions, what percentage of credit card payments do you take compared to WAP billing? And what are the conversion rates like?
A: Credit card conversion rates vary depending on the country and type of content sold. Overall about 14% of transactions worldwide are by credit card. On a good service from a trusted brand we see a 10% - 20% conversion rate. Conversely on WAP billing a similar trusted brand will see a 30% - 70% conversion rate.
With regards to adult restrictions, you should as a minimum post an age restriction advisory notice and request user confirmation of age prior to presenting any audience restricted content when billing through a card.

Q: Can a content provider bill a consumer from one Mobile Originated (MO) message? Or does the content provider have to provide a confirmation (MT)?
A: The Bango service is via a mobile payment confirmation page in a WAP session rather than the old P-SMS model. As a result there is are no questions around billing on MO/MT messages, billing is all done through the mobile web (WAP) flow on screen.

Q: Is a mobile site necessary, or can your system be integrated in a proprietary J2ME app? Also Blackberry, iPhone, or Windows Mobile versions.
A: Yes a mobile site is necessary. For payment purposes the user does need to be directed to a mobile payment page for verification and transaction. From the application you will have to open a WAP session and connect to the Bango system.

Q: Does WAP billing work over WiFi, or only when they are using the carrier’s network?
A: Yes. If the user is not identified via the operator gateway as will happen when connecting via WiFi, the user can always pay by credit card or PayPal.

Q: Can I get access to your carrier coverage for other countries?
A: The mobile payment solution is available worldwide.  For the full list of our billing coverage please visit http://bango.com/products/payment/payment_network.aspx

Q: Is it possible to process donations through your system (where there is no actual download)?
A: Yes this is possible. The user is redirected back to any page you wish. Therefore the user can make a donation and then be presented with a thank you for your donation page. The US carriers support mobile charity payments through Mobile Giving Foundation http://www.mobilegiving.org/FAQ.aspx

Q: I didn’t understand why Verizon is not supported, being the major US carrier it looks like a serious issue, can you explain?
A: The Verizon network currently doesn’t support binary downloads and delivery of content is via MMS. On most Verizon handsets you cannot simply click to download. They also do not have WAP billing system. However, we do have many customers successfully selling content on Verizon using credit card payments.

Q: What are the fees apart from the $499/month?
A: To run a mobile content service, there are no other fixed fees other than your monthly package fee. For every transaction processed, Bango charges a small fee (a few per cent of the price paid). You can of course upgrade your service level or add Analytics capability which will incur an extra charge depending on your usage.

Q: Can we find out how many users(%) use smartphones, blackberries etc. in each operator?
A: We provide information via our Analytics service on the device information you see for your service. Log onto the Management tools and view the Analytics tab to see this information in precise detail for all device types.

Q: What changes do you foresee for WAP billing due to carriers’ focus on compliance?
A: Carriers are very supportive of WAP billing, which is measurably better than P-SMS billing for performance, consumer experience, refund issues and auditability. We work closely with the carriers and the MMA to make sure that there is a consistent approach to providing services via operator billing using the WAP model.

Q: On Alternative Payment, will the recurring experience be across all content providers or just for that one CP?
A: If a user pays by credit card with one CP, the details will be securely stored by our processor and this will enable one-click payment for all subsequent transactions with any CP if the user or service is not enabled for WAP billing via the operator.

Q: What is Bango doing to improve current market conditions, for example (some) carriers’ requirement to send confirmation MT after WAP billing?
A: We are on the MMA board and work closely with the carriers to feedback requirements from our customers to provide the best experience as possible. We are also working with our carrier partners to standardize the payment experience across networks as far as possible. Today there is little variation in the WAP standard (compared to PSMS) so it is comparatively easy to build and launch services.

Q: Does Bango support subscription based billing?
A: Yes, both subscriptions and pay per event models are supported. We have a very sophisticated subscription management system from which you can obtain detailed information about the status of your customers.

Q: In the credit card scenario, if we need to return a membership and passcode how do we return that to the device; presumably after risk tools have been applied?
A: After payment the Bango service redirects the user to a page managed by you. You can return any information you require on this page.

Q: We currently use OpenBit for online billing, but they only support Symbian platform and there is no US coverage. Is the Bango platform independent?
A: Yes, Bango processes payments on all types of mobile devices.

Q: What is your revenue share in a campaign, what part you got and the operators and how much would be my part?
A: Bango pays great rates on all billing methods. We retain a very small percentage from the transaction. Full details on the payout rates can be found here  http://bango.com/products/payment/payment_network.aspx

Q: What is the best way for doing mobile advertising, I have a service of horoscope .  I’m just finishing the page, and the service is up and running, what you recommend?
A: SEO and buying mobile advertising. See the list at: http://bango.com/partners/mobile-advertising/

Q: The payout rates you offer for carrier billing are very different across geographies (eg US vs EU) - what are the main reasons for that?
A: The difference is due to the revenue share that the operator charges. Some operators take a larger percentage than others. We pass as much revenue to you, but because of this the percentages will vary from operator to operator. The amount Bango retains for processing transactions is consistent across all billing methods, irrespective of the operator revenue share.

Q: Where do phones like the Samsung Sync and LG Fuze fall into the phone categories, i.e. Feature or Smartphone
A: We would classify these as Smartphones