Today, mobile payments company Boku is launching direct carrier billing agreements with two of the largest mobile carriers in France— Bouygues Telecom and SFR, offering over 32 million French customers the ability to pay for virtual goods and services using only their existing wireless service account.
Historically, mobile payments companies face the challenge of lofty carrier rates. Wireless carriers have charged roughly 30% to 40% to process transactions made via mobile phone accounts, making it very difficult for mobile payment companies like Boku to scale beyond virtual goods. These transactions costs are passed down to developers using Boku, which are then passed to the consumer. To avoid these costs, Boku has been negotiating direct relationships with carriers as a way of possibly avoiding these costs. While the company declined to reveal the financial terms of the agreements, Boku says the France rates are similar to those negotiated in the U.S. and Germany.
These deals give Boku nearly 100% coverage of the French mobile market, which is nearly 50 million mobile subscribers total. Bouygues Telecom and SFR are actually launching a new service, called Internet + Mobile, allowing consumers to purchase goods online and use Boku to pay with their mobile phone number. Boku says the purchase process only requires two-clicks and gives online merchants access to a full range of price points of up to 10 Euros.
Direct carrier relationships only serve to reinforce the strength of and demand for mobile payments for companies like Boku and competitor Zong. And Zong was actually acquired by eBay earlier this year, for $240 million. Companies have also been eyeing Boku and the company has reportedly become a possible acquisition target for both Google and Apple.