Microsoft, unveiling a raft of product annoucements at its Build conference this week, is also making some advances further afield. Today, Bango, the UK-based mobile payments and analytics company that works with companies like Facebook, Amazon, Blackberry and Google so that app purchases can be billed directly to users’ phone bills, is announcing the first implementation of its service with Microsoft, on the Windows Phone Store. Specifically, Microsoft is turning it on in Indonesia, the largest mobile phone market in South East Asia with over 50 million users. The plan is to expand it to further markets in the near future.
Bango and Microsoft have had a framework agreement in place for a while now but this is actually the first commercial deployment based on that. “Today’s launch with Windows Phone Store is strategically important as it marks our first integration with Microsoft,” Ray Anderson, CEO of Bango, noted in a statement.
It’s also telling that the first deal has been made in Indonesia. Not only does the country boast the most mobile users in the region, but it’s an example of how mobile companies are targeting emerging markets for new services.
As smartphone adoption slows down in more mature markets, it’s countries where there is still fast growth, and more chance of winning over new users, that are the focus. It’s one reason why Apple has finally turned on its online store in Russia. India’s place as a fast-rising number-three in terms of mobile users, after China and the U.S., also underscores this trend. For Microsoft, which is a distant third to Android and Apple for adoption of its smartphone platform, going to markets where there are still consumers to be won over is a smart strategy, and one that its close partner Nokia is also pursuing.
Bango, for its part, has been focusing a lot of its efforts on targeting carrier billing deals in emerging markets — other examples of its efforts in this area include a deal to power payments for Firefox Mobile’s app store (also targeting emerging markets); a deal with Telefonica (covering Latin America); and a $10.2 million fundraise specifically to fund emerging market expansion.
This is not just because of the aforementioned still-fast growth of smartphone user numbers, but because many of these markets also have low penetration for credit, debit and other payment cards. As a result, having a facility to bill app purchases directly to your prepaid mobile phone account is not only more convenient, but might actually be opted for more frequently than in markets where users already have accounts with iTunes, Amazon and the rest based on their credit card accounts.
Bango says that app stores that have carrier billing services implemented tend to have much higher conversion rates for paid services. In markets where there are credit cards in abundance, conversion rates are 300-400% higher for carrier billing services than for other services; in markets where card penetration is low, it claims that carrier billing conversions are 1,000% higher.
The Indonesia deal involved a third party as well, the carrier Indosat — meaning that it’s only applying to users on that network. The thinking for Indosat goes that this will either drive more users to that network, and get users to spend more money; and for Microsoft and Bango that one deal will get Indosat’s competitors also willing to negotiate. Microsoft is using other technology providers to integrate for billing with other carriers, too: for example, XL Axiata is using a mobile payments solution from Amdocs to power Windows Phone store billing.
“Mobile operator billing gives consumers a convenient payment option with significantly higher conversion rates than credit cards, greatly benefiting Windows Phone 8 customers and developers,” says Todd Brix, GM, Windows Phone Store, Microsoft, in a statement. “We’re happy to see companies like Bango and Indosat working together to expand monetization opportunities for developers and provide seamless purchasing experiences for Windows Phone users.”
Given that this is carrier billing that we are talking about, getting a carrier on-side for these services to link in with their back-ends is central to moving ahead with these services. Bango refuses to comment on where it currently stands with Amazon — a partnership that was announced ages ago, but has yet to be commercially rolled out anywhere. The answer may lie in how those carrier deals are shaping up — or not, as the case may be.