Billing on Mobile

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

Yesterday Research In Motion launched its BlackBerry App World, in response to Apple’s App Store and expects approximately 1,000 applications to be posted on the store this week, including applications from the New York Times, Shazam, Bloomberg, Gameloft, Lonely Planet and MTV.

But with strong price competition amongst the Apple App Store’s 25,000 apps, doubts are being raised over whether developers can make money out of apps for these stores. Is the RIM app store likely to suffer the same fate?

According to MocoNews, the average cost of building an iPhone app is around $30,000, which is a small sum for a large media brand but is, of course, a more significant investment for a small development shop. Charmin, the toilet paper brand, sponsored the “SitOrSquat” app . It said the effort worthwhile even though the app has been downloaded only 1,600 times (between the iPhone and BlackBerry).

Mobile consultant and analyst Chetan Sharma sums up the hits-driven nature of the business this way: “One good application will get a boost on one day, and then it dies down the next. Then what do you do? It’s not a sustainable model for a company.”

We’d be interested in your ideas on app stores, are they the business model for the future? Do you think you’ll be making money from your bright idea?

By our Technology Correspondent - Dickie Siskin.

1 April 2009: Following the recent frenzy caused by recent announcements of LTE network technology and App Store, the mobile industry continues to push the technology boundaries with an announcement that looks set to revolutionise the mobile payments industry.

A new form of fast and reliable mobile payments has been launched today by SMS Aggregators. Known technically as PSMS, the new Pigeon Send Money Service uses the innate response of advanced homing pigeons to get the payment from the user’s phone back to the operator much faster than previous methods.

“The system is very simple to use,” explained Mike Thrush from the MPA (Mobile Pigeon Association). “The user selects the content on their mobile phone and then chooses how to pay. When they select PSMS, they simply locate the nearest pigeon and put the money in the conveniently located strap attached to the left leg. Once released, the pigeon will fly direct to Newbury, Hatfield, Slough or Paddington depending on the colour of the strap. At each mobile operator headquarters there are teams of collectors who empty the money twice a day.”

A Vodaflown spokesman, Al Grebe said: “We have installed thousands of new roosting spots at Newbury to make sure we can cope with demand. Each day our collectors take the money from each pigeon and assign it to the correct MSISDN (Mobile Subscriber Individual Sparrow Debit Number). During the trials they have collected a few eggs as well, so there is a real bonus to this.”

Under the new scheme called FlockToit, there will be very strict rules about how the pigeon must present itself to the consumer and it is not yet clear if they will have to display information about terms and conditions or bird-seed charges. “We are looking into printing this information straight onto the feathers using the latest non-toxic inkjet technology.” said FlockToit spokesman Steve Pipits from Oriole in Paddington.

Andrew Bird from mFlocks, one of the first AFIs (Accredited FlockToit Intermediaries) said: “This is a great step forward in P-Commerce as our customers have been demanding higher reliability than the old systems we used to use.” He added that the development continues on this exciting new initiative: “We are looking to use the other leg to carry the payment for data charges, as it is best to separate these from content charges.”

There have been a few teething troubles during trials, but a spokesman from Jay Mobile, Robin Dent told us: “We have lost a few birds due to over zealous hunters and these pigeons become known as uncollectables.” Stephen, a hunter living in the country near Newbury said in defence of the shooting fraternity that: “It’s very hard to tell a P-SMS from an ordinary pigeon; perhaps they should try rabbits instead.”

If you haven’t guessed already, you’ve been April Fooled!

Some recent stats from Bango show that only 5 countries in the Top 10 for browsing are also in the Top 10 for payments - USA, UK, Spain, Portugal and South Africa. 

Here are the reasons why one country may be a much better candidate for selling mobile content than another:

• Disposable income – the more disposable income people have the more they will spend on content.
• Ease of paying for content – can users easily pay on their mobile bill with one-click payment?
• There are cheap, flat-rate data plans that make browsing the mobile web affordable.

Being successful is not just about identifying the hot markets to focus on.  Here are some thoughts on what you also need to:

• Price according to the market – a $5 game in the US may only be affordable at half the price in a country like South Africa
• Get your content in front of your targeted audience using affordable mobile marketing programs.  This could be on-portal advertsing, search marketing through Yahoo! or Google, mobile advertising on third-party sites and SMS campaigns.

You don’t need all of these factors to have a market worth targeting. A classic example is South Africa, where the majority of the population don’t have large disposable incomes, but are avid mobile browsers and content consumers. For them, the only way they can get onto the internet is using their phones and they love it.

Do you have any other factors that you think influence a market? Let us know. Bango is always here to help if you need any advice.

App Stores for mobile phones do seem to be flavor of the month, judging by the announcements at Mobile World Congress this month.

Along came Apple and launched a highly successful iPhone App Store and now nearly all the major handset vendors - Nokia, RIM, Google to name a few - have or are jumping on the bandwagon.

This glut of mobile app stores is likely to confuse the market. I’m a developer, which store should I optimize my app for?

Whereas a mobile shop in the mobile internet removes a lot of the complexity of getting apps working across different platforms, devices and operating systems.

This is brilliantly summed up by Vic Gundoria, VP of Engineering at Google:

“You can build an application that spans devices if you use a modern browser. We’re seeing the emergence of a platform that spans devices. We don’t need to name it, it’s called the web.”

But Google don’t exactly walk the talk as they too have an app store for their handset but then I guess people will be expect that.

The other benefit of the web approach is you can integrate a range of payment methods into your mobile shop - on phone bill, credit/debit card and PayPal - and people always have a way to pay no matter where they are in the world.

Nearly all the app stores I’ve seen just support one payment method, limiting their market potential. You could call it financial suicide.