One more deal in the bag for Bango, the UK-based startup that enables carrier billing services for mobile users: it has signed an agreement with Samsung for the handset giant to preload its services on to all Samsung devices running the Samsung Galaxy Apps store — letting consumers charge games, e-books, music and videos directly to their mobile phone bills or deduct them from their prepaid allowances.
The deal could help Samsung in two ways: it will give Samsung handset users (Galaxy Apps was rebranded earlier this year and it covers much more than just the company’s Galaxy line of smartphones) a way of paying for apps by directly charging to their mobile phone bills, or by deducting from their monthly credit; and, Samsung hopes, that convenience will potentially entice people to use Samsung’s own app store instead of Google’s or the many others that compete for their attention (or as I like to call it, app-tention).
It is a plum deal for Bango, too: the company, listed in the UK, has been up over 8% today on the news.
The reason it’s good for Bango is that carrier billing services typically operate on very thin margins for the billing provider, and those margins are the billing providers’ main source of revenue. That effectively means that to make a decent business on carrier billing, you need to be not only a popular purchasing format, but as ubiquitous as possible, and cutting a deal with the world’s largest handset maker is definitely one way of reaching that point.
Bango, which also recently announced that it would raise up to $6 million to fund its expansion plans, also powers carrier billing services for Amazon, BlackBerry, Facebook, Firefox, Google Play, Windows Phone and various individual app publishers like EA and CNN.
The really noticeable absence in that list is Apple — long rumored to be planning a carrier billing service for its App Store but yet to roll anything out.
While carrier billing is used in mature markets like the U.S. and Europe (indeed, Amazon’s rolling out its first carrier billing implementation in Germany), the big goal is to get these services up and running in emerging markets.
That’s because in these areas there is significantly lower payment card penetration; so the huge wave of consumers in countries like Brazil, Russia, India and elsewhere that are now turning to smartphones as their primary means of accessing the internet effectively need a different way to pay for content. Typically they have instead used premium SMS services but these have more steps and end up more expensive for users.
For those handset makers and app store operators who have been trying to grow their business in these emerging markets, carrier billing represents one way of getting those consumers to spend more.
Bango has deals to enable charges to carriers in 130 markets, and it says that the Samsung rollout is starting immediately across a “wide range of countries.”