September 18, 2014
Amazon has initiated carrier billing for mobile apps in order to bring more usage into its mobile business. This would enable a user to buy paid apps and make in-app purchases by simply getting the transaction amount charged directly to phone bill. Germany is the first country where the service would go live on Telefonica’s O2 mobile network. Amazon is working in collaboration with a UK carrier billing company called Bango.
The service is currently active for Amazon services on O2 network devices and the user gets charged in euros or in Coins, Amazon’s virtual currency. Amazon had already tied up with Bango back in 2011 in order to develop the service. Amazon is also trying to push sales of its Fire Phone. It would certainly promote an optimal environment with Fire Phone and carrier billing.
Bango is among a few companies that enable carrier billing services, the other prominent ones being Fortumo and Boku. Bango already works with Firefox’s Marketplace, Windows Phone Store, BlackBerry, Google Play and Facebook. Bango works with 120 different mobile operators to link their back-end billing systems to app stores and apps.
In emerging markets around the world, payment card penetration and bank account ownership is on a lower scale. Carrier billing acts as a significant alternative in such markets, especially in order to grow the app business. Carrier billing also gives the opportunity to work with a pre-pay subscription as well besides on-contract subscriptions. This enables one to simply make use of topped up phone credits and manage purchases well.
Two prominent advantages which carrier billing has is with respect to convenience and security. Carrier billing makes the buying process less complex by offering a frictionless credit line. No need of wondering which payment option to be used. On the security side, we see that there are only two stakeholders: the carrier network and the user itself. With no third party involvement, we can expect protection against data breaches and avoid cases like theft of credit card details.
Carrier billing is gaining momentum across markets, providing the most convenient form of mobile payments. As per Juniper research conducted in 2013, global revenue from carrier billing is expected to reach $13 billion by 2017. With about half of Android apps using in-app billing, many developers and sellers of digital goods are looking into carrier billing as the optimum solution.