Boku Inc. is about to make it easier for consumers to purchase virtual items that might help them better conquer laughing pigs with different kinds of birds on their mobile phones.
The San Francisco-based mobile-payments company has released a software-development kit that enables Google Inc. Android mobile-application makers to add what is calls “1-Tap” billing to enable consumers to charge in-game purchases to their monthly wireless bill.
Boku already provides its direct-to-mobile billing service to companies such as Aeria Games and Entertainment, Electronic Arts Inc. and Facebook.
Boku designed the mobile in-app payment option to give game developers access to consumers who lack credit and debit cards or those who want convenience when making quick, impulse purchases on their mobile phones, David Yoo, Boku senior vice president of strategy, tells PaymentsSource in an interview.
“Those are consumers they typically wouldn’t see” using an in-app checkout service, Yoo adds.
Game developers asked for this billing option because they needed more help gaining revenue on the Android platform, Yoo says.
Consumers who play games on Apple Inc.’s iPhone, iPad and iPod Touch devices generally have access to credit and debit cards and make purchases through their iTunes account, Yoo said.
“Android users are more fragmented” in regards to their available payment options, he added.
Boku’s backend software enables it to connect to a wireless carrier’s billing system. Consumers use just their mobile-phone numbers to initiate transactions at a merchant’s checkout screen.
In 1-Tap’s case, consumers tap a button on their mobile screen to confirm a purchase. Boku’s backend system authorizes the transaction if the user’s wireless company allows direct-to-mobile billing, Yoo says.
“They have boiled this down to no friction for the consumer” to do these type of transactions on the mobile phone, Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group LLC, tells PaymentsSource. “It doesn’t get easier than that.”
Boku’s cost to merchants is similar to what other companies charge in the space.
Historically, most digital content purchased through a mobile phone has relied on a method called premium short message service, or SMS. Vendors use such messages to deliver digital content, such a ring tones, to a mobile phone. The carriers, however, required the merchant to pay as much as 50% of each purchase as a transaction fee similar to interchange.
Companies similar to Boku such as Danal Inc.’s BilltoMobile and Zong Inc. moved away from that model to direct-to-mobile billing, whose transaction-billing rate falls between 10% to 20% of the sale.
Such rates are good for virtual goods and services that have a low-dollar value, Ablowitz says. “They are not well-positioned for physical goods,” he adds.
Boku has no immediate plans to makes its services available to purchase physical goods, Yoo says.
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