The company behind the popular mobile-phone game Angry Birds is adding a payment option using a model that has gained traction in recent months with U.S.-based wireless operators.
Rovio Mobile Ltd. of Finland has developed a in-game payments system Angry Birds players may access to purchase more mobile applications from the company, which bills the purchases to the user’s monthly phone bill.
The system, called Bad Piggy Bank, is available through the Google Inc. Android version of the game and is limited to customers of Elisa Oyj, a Finland-based mobile operator. Rovio plans to expand the system’s availability to other carriers next year. The company did not respond to multiple PaymentsSource requests for comment.
The wireless carrier billing system is nothing new. In October, AT&T Inc. signed partnerships with three mobile-payment companies that enable its wireless customers to charge online purchases for digital content such as games and music directly to their mobile-phone bills.
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 as 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.
Mobile-payment companies have moved away from this model to direct-to-mobile billing, whose transaction-billing rate falls between 10% and 20% of the sale.
The rate is not where it needs to be, but more merchants are willing to accept it, one mobile-company executive tells PaymentsSource.
However, such rates will prevent the direct-to-mobile billing model from becoming mainstream, Todd Ablowitz, president of Double Diamond Group, a Centennial, Colo.-based consulting firm, tells PaymentsSource.
“I’m very skeptical that [billing model] is going to have a huge amount of success,” Ablowitz says.
Another flaw to the system is how long it would take Rovio to receive funds from the transaction, he adds. “[The mobile-payment company] doesn’t see any money until after the carrier gets paid.”
Despite the flaws, companies and investors involved with direct-to-mobile billing view the model as a payments trend, Ablowitz adds.
Consumers also appear to favor the option over using PayPal, suggests new research from consulting company Strategy Analytics, which in November surveyed 1,000 U.S. consumers online and 1,500 other from the United Kingdom.
In the U.S., some 38% of respondents favored direct-to-mobile billing, while some 40% preferred it in the United Kingdom. Respondents in both the U.S. (31%) and UK (26%) preferred PayPal to using a credit or debit card.
It should come as no surprise that Rovio is attempting gain more revenue through Angry Birds’ popularity, Ablowitz says. “Companies are exploring payments as a way to monetize” how many consumers use or view particular websites, or in this case, games, he adds.
Ablowitz cites Facebook Credits as a prime example.
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