Premium SMS failure rate points to need for WAP billing

Failure rates on Premium SMS point to WAP billing

Failure rates on Premium SMS point
to need for WAP billing

If you are looking for a mobile billing solution and think that Premium SMS is the obvious choice for selling your mobile content then it’s probably worth taking a closer look at what other options you have. There are two things to bear in mind:

What’s the user experience going to be? A poor experience will reflect badly on your service.

What’s the payment success rate or put another way, how many of my transactions are likely to fail?

The WAP payment flow is an evolution of the P-SMS user experience, offering users a no-surprises, transparent experience much like the browse and buy experience you get on the PC internet. Users can clearly see what they are buying, how much it costs and what the T&Cs are.

All of the UK operators now endorse the Payforit WAP flow as they believe it offers consumers a superior experience than Premium SMS. US operators - Sprint, AT&T Mobility, Virgin Mobile and soon T-Mobile - also offer WAP billing as do most operators in Europe.

The failure rate with WAP billing is around 8% in the UK - 7% of which is users with insufficient funds according to Bango data. In our experience just 1% of transactions fail because of problems processing payments.

When you compare this with Premium SMS failure rates of 16% (recently quoted by a European network operator) you can quickly see how poor Premium SMS is compared to WAP billing. Remove the 7% for insufflient funds and on average 9% of transactions fail, compared with 1% for WAP billing.

For anyone selling mobile services, Premium SMS means 9% of customers are fulfilled but not billed. That’s right, they get your content for free! With WAP billing, you only deliver the content once Bango has collected the money, plus you get more successful transactions.

Premium SMS volumes have been on the gradual decline in the last year (down 23% from April to July 2008 according to one European network operator). This is partly caused by loss of consumer confidence, the rise in complaints seen by PhonepayPlus and partly because some offending services have been shut down.

Is it any surprises that more and more new mobile services use WAP billing rather than Premium SMS to charge for content? What are your experiences with WAP billing? We’d love to hear them.

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