January 8, 2014
One of the companies that has been quite busy in the payments industry over the last year or so is Fortumo. And there is a reason for it. It has the financial muscle backed by VC money. And why investors are interested in their story? Because carrier billing is emerging as a good proposition and Fortumo does well in that segment. One of the growth strategy of the company seen in recent past is to expand in emerging economies like India and Indonesia. Recently, the company had announced the launch of its mobile operator billing in Indonesia. Yesterday (Jan 7th, 2013), the company also announced a partnership with International business and payment platform Payelp GloBal.
Fortumo was launched in 2007, aiming to be the most developer friendly mobile payments provider. Mobi Solutions a specialist in SMS based service provider owned major stake in Fortumo when the service was launched. Back in February, 2013 Fortumo raised $10 Mn from Intel Capital and Greycroft Partners to foray into emerging markets.
Why this partnership?
Payelp Global is a worldwide provider of payment services to businesses and online retailers that processes more than 500,000 transactions per minute, offering payment and business development services to merchants in over 74 countries.
Mobile payments bring the biggest revenue to merchants from countries where few people have credit cards – Central & Eastern Europe, Latin America, Africa and Asia, said Rain Rannu, Fortumo’s CEO. Our common expertise in emerging markets with Payelp will help more merchants earn additional revenue through operator billing.
How does the partnership help Payelp?
Globally, Fortumo has presence in over 180 countries and has tie ups with over 300 carriers and 92,000 developers. Some of the popular app or game developers who use Fortumo’s direct carrier billing service include Pop Cap Games, Rovio (Angry Birds app maker), EA, Gameloft, Badoo, etc.
We are very happy to be working with Fortumo as they are a rapidly growing mobile payment service company that will help our merchants to expand into areas where mobile payments are growing at a rapid rate, said Payelp CEO Albert Donahue. In Canada, as well as in Eastern and Central Europe, mobile payments are on the rise. Fortumo has a strong presence in these growing markets, and we are looking forward to our partnership together, he added.
Fortumo has been pretty busy in the payments field over the past year:
On September 17, 2013 Fortumo officially announced its availability to do business in India. Fortumo has tie ups with all the major telecom providers and has access to over 530 Mn users in India. Speaking about the launch, Gerri Kodres, SVP Business Development and Carrier Relations at Fortumo stated India has historically been a tough market to crack for mobile payment providers due to outdated premium SMS technologies being widely used, making payment integration for mobile game and app developers complicated. Rather than relying on old technologies which were meant for selling ringtones and wallpapers, Fortumo connects to operators directly through direct carrier billing. In this scenario, users do not need to send any messages. This makes payments faster, in turn increasing conversion and revenue for developers.
Fortumo rolled out a new program called Fortumo Expand, and was launched on October 24, 2013. The launch of this program was to help Chinese app developers to make money overseas by selling their apps. Speaking about the reason behind this launch, Gewben Wu, Head of Fortumo Asia says, While helping top Western developers to monetize their users with mobile operator billing in China, we realized that it’s equally difficult for Chinese developers to achieve international success. Due to the language barrier, differences in culture and business practices, it is often difficult for Chinese developers to find the right partners in the West. As we are the only Western mobile payment provider with a local presence in China, our goal is to help local developers bridge this gap and expand their business in new markets. In China, Fortumo has tie ups with major telecom providers which include China Unicom, China Mobile and China Telecom.
The Indonesian digital goods market is estimated to reach $244 Mn in 2013. Of this, lower than 10% of payments are made with credit cards. Indonesia has an estimated 57 Mn smartphone owners, a number which has doubled since 2012 according to businesswire. Fortumo, announced the launch of its mobile operator billing in Indonesia on 10th December 2013, to tap into this market.
What does the launch mean for users in Indonesia?
Fortumo works with thousands of platform owners & top app developers like Rovio (Angry Birds), Electronic Arts, Microsoft, Barnes & Noble, Box TV, Gameloft etc.
Launching in Indonesia means that over 200 Mn additional smartphone users can now purchase content from these developers via mobile operator billing.