More Developments For Amazon’s In-App Payment System For Appstore, But More Work Needed

When we interviewed Ray Anderson, the CEO of mobile payments company Bango last month and asked him when we would see one of its key customers, Amazon, roll out its own mobile payment service, his cool answer was “in due course.” A report out today from Bloomberg points to the company getting warmer on the idea.

Bloomberg writes that app publishers have been trialling Amazon’s payment service for around the last month. The service covers both one-off purchases as well as subscriptions through apps. And, like Google and Apple, Amazon is taking a 30 percent commission on payments made using the platform.

This appears to be a development on the payments system that Amazon has previously said it was running in beta, and fills a hole in the company’s app offering: in-app payments are much-liked by developers who have increasingly been opting for freemium-style models on their apps, luring in users with no download fee, and then upselling them on extra goods and services once they’ve got them hooked. Amazon is missing out on that incremental revenue from in-app purchases at the moment.

That’s a market that IHS projects will make $5.6 billion in revenues worldwide by 2015.

The news comes at the same time that other online companies are increasing their role in paying for digital content: according to a story in Reuters, a Belgian company called Paycento is reportedly working on a service that lets users pay for content online by linking up Paycento’s billing service to their Facebook, Twitter or LinkedIn accounts — services that are now following many users as they browse online anyway.

Maria Ly, a co-founder of Skimble Inc., which makes physical fitness apps, told Bloomberg that her company has been trialling the service covering both three-month subscriptions (at $24.99) and single fitness programs (at $9.99). (Those high prices, BTW, point to something else worth pondering: are users more likely to pay more money when they’re lured in already to using an app?)

One other detail from the article: it appears that Skimble is trialling it specifically as a route to growing its business on the Kindle Fire. Amazon’s Appstore also offers apps for Android handsets.

Bango announced back in December 2011 that it had signed on Amazon as a customer. At the time it didn’t give any more detail, but we do know that Bango has built a pretty huge business out of offering carrier billing services to let content companies charge purchases directly to a consumer’s phone bill. It also provides a very lucrative service tracking and analyzing how users engage with and buy content (more on that here).

What’s interesting with Amazon and carrier billing is that for now the Fire tablet is Wifi-only and pretty much completely circumvents the carrier, so while Amazon might use carrier billing on its Appstore for Android handsets, it may have something else in mind for how the billing works on tablets. It may be that the in-app billing infrastructure simply links directly into Amazon’s existing billing back end.

There are still some big (and, for those of us outside the U.S., super frustrating) holes in Amazon’s Big Mobile Adventure. For starters, we still don’t have an ETA on when the Kindle Fire may be making its way to markets like Europe. And that Appstore is also still only a U.S. product, too.

There is also the matter of how Amazon sets pricing for paid apps. Up to now, Amazon has been using a two-level system for pricing, either 70 percent of the price they sell it for or 20 percent of the developer’s desired price, a kind of variability that it has been applying for years to other products like books but very much runs counter to the kind of pricing control that developers of games, for example, want to retain as part of their app businesses.

We are reaching out to both Amazon and Bango for comment on this report.

Kim-Mai Cutler contributed to this report.