Say you are a member of the close-knit community of approximately 40 million people who play Angry Birds each month. You are therefore one of 40 million people who understand the intuitive nature of a) in-app billing and b) how easy it should be for operators to capture the billing market.
Billing, not so long ago a boring, stagnant place, has become a battlefield for telcos themselves. The war itself is the Mobile Payments war.
Gaming on mobiles is in the forefront of this new fight and developers and publishers are siding with the operators. According to Chief Revenue Officer of Fortumo Martin Koppel, “mobile payments convert on average 7-9 times better than credit card payments”. In many countries where gaming is huge and growing, everyone has a mobile phone, not everyone has a credit card – so “the carrier payment process is by far the easiest”.
Different economic backgrounds and levels of credit card ownership aside, payment options are more or less comfortable and intuitive depending on what you are doing. Playing a game on a mobile lends itself to paying via the phone. If you are sitting in front of a computer, entering a credit card is more familiar. How natural something feels affects the conversion, or continuation, rate. Carrier billing is now available to 3 billion customers.
The popularity of games such Angry Birds will strongly influence the way that customers naturally pay for services. The game was downloaded more than one million times within the first 24 hours of release, and did twice that during its first weekend. Rovio, the developer, receives approximately $1 million a month in advertising revenue. This is not surprising if you consider that it is played for 3.3 million hours per day – an advertisers’ dream.
Gaming should not be underestimated. Telcos’ should use the simplicity of the model to continue to push carrier billing into customers’ psyche. If they can do that, partnering with the developers and publishers who understand their customers, they may be far enough ahead to stand the test that is coming from Apple, in one form or another.
Next: the anatomy of the payments process – so much more than money.