By Aaron Hayes, Product Manager, Mobile Billing & Payments
A successful mobile application and content business requires a shrewd combination of compelling marketing proposition, packaging, outstanding quality of service, simplicity of use, consistently good quality applications and ease of payment. While these factors alone may not guarantee the success of your mobile content and application business, they do contribute significantly towards it.
Gartner forecasts mobile app revenue growth between 2010 and 2015 to be around 1,200%. This impressive growth combines direct spending and associated advertising revenue to create a global market valued at just over US$52Bn by 2015.[i] With advertising representing only ~10% of the total, this indicates that the revenue opportunity for paid downloads and ‘in-app’ purchases requires all the more focus.
Direct operator billing, a payment method which integrates directly with a mobile network operators’ billing and charging environment, provides various benefits associated with the monetization of mobile applications. These include: providing simplicity and ease of payment for consumers; enhanced customer satisfaction from immediate purchase responses; better security, involving authentication in real-time and payment authorization regardless of whether a user is post-paid or pre-paid; improved purchase conversion rates; and very low customer support costs for merchants. Direct operator billing is also an ideal method for managing in-app purchases. In-App transactions present an environment in which fast, accurate, high-volume micro-payments are required to be processed.
Direct Operator Billing represents a convenient and secure alternative payment method, requiring neither the use of charge cards nor any sort of online pre-registration. This type of payment method is interesting not just because of its ease and security, but also because it can be used by a variety of customers who fall into the demographic of not having a Bank account or Credit card. This massively increases opportunities for mobile content monetization, and also extends the use of the mobile phone bill or prepaid balance in new ways, including transactions that do not involve conventional mobile services at all.
The rapid expansion of available mobile handsets, applications and services requires a payment and settlement solution that is more sophisticated, more intuitive and more secure than legacy billing technologies such as Premium SMS, WAP Billing and Credit Card payment mechanisms. Providing a more sophisticated, more intuitive and more secure payment mechanism is what direct operator billing is all about.
[i] Forecast: Mobile Application Stores, Worldwide, 2008-2015 – pub 18 May 2011, ID:G00212661