In online commerce, it’s usually a good idea to make the checkout or pay process as simple and easy as possible. It reduces abandonment rates and can increase repeat purchases. Amazon is a perfect example of how easy the checkout process can be and it’s been a great benefit for them.
Mobile payments have also been a big issue. There are several issues in the mobile payment arena, one of which is how to make it easy for customers to buy and pay for content on their phone. According to US/German carrier billing company Mopay, there is some positive progress being made in this area. Mopay helps people pay for content or services on their phones and charge it to their carrier bills. Other companies like PayOne and BilltoMobile are also working to gain market share and grow this business.
This form of payment, while not new, is not widely used or known but the convenience is a real benefit for all parties involved. The ability to easily pay increases conversions for offers. As more legitimate offers are available and companies allow this form of payment, growth should occur.
The service is not without problems though and the FTC and FCC have been closely watching the industry to protect consumers from “cramming”, which is the unauthorized, misleading or deceptive placement of a charge on a consumers bill. As we’ve seen before, there are always those willing to do wrong to increase revenues. These types of problems have impeded growth and kept the market fragmented. Hopefully wider acceptance and better transparency will lead to broader distribution and acceptance on more platforms.
In recent data shared with Techcrunch, Mopay analyzed 4 million transactions from 2008 to 2011 and show a four-fold increase in traffic and an increase in value.
Large companies like Google (paying for Android apps) and Facebook offer this type of payment and others seem to be lining up to possibly offer it. This is good news for anyone who wants to easily pay for content or services on their phone without much hassle. It’s also very good news for providers of content, games, etc who would benefit from low friction transactions for people to subscribe or buy on their phone. Again, easy payment options are key to many sales, especially on phones.
Mobile gaming has been an early winner in carrier billing. It’s the largest market, making up over half of sales and is growing at approximately 30% per year. Social games are trending up both in numbers and in revenue per user which is up 40% to over $5 per month.
Also, mobile security, ticketing and phone products such as ringtones as well as mobile dating are all top segments in carrier billing. Premium spending or higher ticket transactions occurs in premium content like special interest social networking services and charity payments.
In countries where the service is available, people use it and once people start using it most of them continue. Some countries seem to like carrier billing more than others. For example, in Italy there are a lot of single users who return 25% of the time. In Brazil 70% of users return. This could be due to the fact that Brazil has a lower use rate of credit cards but a high rate of mobile penetration.
As a marketer, this is something to keep an eye on. Anytime a simple solution to a problem is available, it makes sense to take advantage of it.