(Courtesy Bango)
Billing and analytics provider Bango (Cambridge, England and New York, NY) estimates that in-app revenues this year accounted for 5% of all mobile app revenues, a number that will grow to 30% in 2011. That’s 600% growth! I spoke with Andy Bovingdon, Bango’s vice president of product marketing, about in-app wireless billing and why Bango thinks it’s booming.
In-app billing is billing from within the application you’re purchasing on your mobile device. It’s triggered when an application enables you to play or listen or view something (such as a game or download) on your device (such as your laptop or mobile phone) for a period of time or until you reach a certain threshold when you have to buy the full version.
“It’s click- and-pay, and it’s the future” says Bovingdon. “Other types of payment, such as that on Android devices, are complicated—it doesn’t work, it requires too many forms to fill out, too many screens that block the impulse to buy. We store your details online so click-and-pay works every time.”
Many companies facilitate mobile billing, but in-app billing is more like PayPal. “Text messages have been the dominant way of paying for music or game downloads via mobile phone,” says Bovingdon, “but they can get lost; they aren’t really designed for payments. The Bango model offers a single service-to-service connection for a payment, processed directly through your carrier. A content provider adds Bango into their website or service once and they can immediately sell to customers on a certain network through a single click-and-pay transaction. Users also have to set up their buying preferences only once before the Bango system can identify them by device, or password—however the user specifies—and whether they choose to pay via credit card, a service like PayPal, or even more simply, through their carrier’s phone bill.”
In-app billing requires access to the internet on your device, which means you must have a data plan on your mobile phone rather than just texting. But data plan prices are coming down, making it accessible to more users.
“Use of a browser makes authentication of the buyer simple and immediate,” says Bovingdon. “If you’re on a PC or on a website, and you want to buy an app, all you need to identify the user is the phone number, which enables a direct server-to-server payment. It’s the quickest and most direct method. Text messages are inconvenient. If you’re browsing the internet on your phone, and you find an app you want to purchase, you want to click a button, not revert to text. With in-app billing, the carrier instantly identifies the user and can bill the right person for the service. A server-based identity system at the heart of the Bango service means the authentication only needs to be done once. The second time, the system can identify you even if you’re on a strange system like WiFi at Starbucks.”
Bango’s forecast that for 600% growth of in-app charging in 2011 is based on end of year trends from leading developers in the games, music and broadcasting segments. Says Bovingdon, “I actually think 600% is conservative, considering the growth of mobile apps, and how the majority of applications were sold on on iPhones, making Apple dominant for the last year or two. Now that Android, Nokia, and Windows are growing their share of the mobile apps market, a forecast of 600% growth is probably low.”
