Telkom South Africa Launches Carrier Billing for Google Play

Bango and Telkom South Africa, have partnered to launch carrier billing in Google Play, a first for Africa. Telkom SA is using the Bango payment platform to provide the service to its Android customers, giving them access to a universal payment method to fully enjoy the app store experience.

Carrier billing is not new, but many view carrier billing as a convenient and efficient way to enable mobile content purchases.

Google Play carrier billing, on the Verizon Wireless network, for example. allows customers to purchase up to $100 in digital goods (virtual online games, music, e-books) from the Google Play store, using an Android device.

The purchases are charged to a customer’s Verizon Wireless bill. It is touted as an easy, convenient, secure method for purchasing digital goods on a device without having to provide an online merchant with credit card information.

There is a big potential market, as Google’s Android platform currently represents 89 percent of the smartphone market in Africa, according to IDC).

Telkom customers using Android smartphones and tablets can now purchase their apps, games, music and other digital content using one-click carrier billing, charging the cost to their phone bill or deducting the charge from airtime, without the need for a credit card or to register personal details.

Customers with limited or no access to other payment methods now can use carrier billing to buy from the Google Play store, Bango says.

Where carrier billing is introduced to fast-growing emerging markets such as in Africa, Bango routinely sees increases in digital content sales of 300 percent to 400 percent.

Where consumers are only presented with a “credit or debit card only” payment option, conversion rates can be as low as 0.5 percent  in developing markets, and rarely exceed 40 percent  even in developed markets where card penetration is high.

The average conversion rate for carrier billing in app stores using the Bango payment platform during 2014 was 82.4 percent, Bango says.

Traditionally, carrier billing has been a business issue for would-be merchants, as the carriers kept 25 percent to 40 percent of the gross revenues.

That obviously is changing, as it is hard to see a business model for most app providers if an app store claims 25 percent of gross, and then a carrier takes another 25 percent of gross revenue.

That is one reason why micropayments generally are unrealistic using carrier billing. With revenue sharing rates so high, purchase amounts generally are in dollars, not cents. In the U.S. market, that tends to imply $10 to $20 purchase prices.

Of course, there are precedents. Linear video content providers generally are paid about 40 percent of retail gross revenue when a distributor sells a subscription.

But high prices are a deterrent to consumption in any market. So it is likely carriers are being more flexible these days.

In the past, consumer protection issues also have been a concern, where carrier billing is available.  
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