For mobile payments and analytics provider Bango.net Ltd., a recent shot in the arm from investors represents a chance to expand into emerging markets and help offset the company's costs for preparing for the next generation of BlackBerry phones.
Cambridge, U.K.-based Bango raised £6.5 million (U.S. $10.2 million) by selling 3.2 million shares on the London Stock Exchange. The publicly-traded company connects digital merchants like app and game developers to the billing platforms of mobile network operators worldwide with its one-click mobile pay technology.
Bango will use the funds to expand operations for its targeted billing options in India, Brazil and other parts of Latin America and Asia, the company announced last week.
Such expansion could help the company recover from recent losses — at the end of its fiscal 2012, it reported a loss of $3.8 million in the prior nine months (Bango realigned its fiscal calendar in March 2012 to match the calendar year). Its losses stemmed from investments Bango made to assure it was ready to provide services for the BlackBerry Q10, says Richard Leyland, Bango's head of marketing and communications.
"BlackBerry uses Bango for 100% of its [carrier-billed] payments platforms, and we had to be ready on day one for customers to be able to use the system on the new phones in the same way," Leyland says.
BlackBerry Q10 has launched in the UK and Canada, and is expected in the U.S. market in March.
When Bango established its exclusive carrier-billing deal with BlackBerry two years ago, it was added on top of PayPal’s partnership with BlackBerry to handle payments, Leyland says.
In 2009, PayPal established a partnership to be the exclusive payments provider for the soon-to-be-established Blackberry App World (now just Blackberry World).
"It’s still technically possible to pay on BlackBerry using PayPal, but to do so the user needs to proactively back out of operator billing and choose an alternative payment," Leyland says. "Operator billing, exclusively provided by Bango, is the default payment mechanism."
The PayPal option may come into play more in developed markets, but in the emerging markets, Bango is likely to be the option of choice, as it is used on Facebook, BlackBerry World, Windows Marketplace, Amazon.com, Opera, Google, Telefonica and others.
In November 2012, Facebook added Bango's carrier-billing service when allowing Orange telco customers in France to make online purchases through Facebook. Early last year, the Norwegian company Opera included Bango as part of its new payment exchange to provide mobile payments to consumers using any type of mobile phone.
BlackBerry is expanding its use of payments, supporting payments in less expensive phone models. Mobile banking technology and network provider Monitise Plc announced Feb. 11 it was launching the first mobile pay service for BlackBerry Messenger in a commercial pilot in Indonesia.
Such a development could bode well for Bango, which is looking to emerging markets that will provide cheaper versions of smartphones as a way to boost services, Leyland says.
"We are expecting a lot of future smartphone sales in developing areas, which is why we have developed strategic relationships with carriers who have indicated they have much cheaper devices coming," Leyland adds.
Bango secured one such relationship last month with Telefonica Digital to offer direct-to-bill payments for mobile app stores and content providers in 22 countries.
In addition to its direct-carrier billing option, Bango supports one-click mobile pay through PayPal accounts, or credit or debit card accounts, Leyland says.
"We work to provide the simplest mobile payment method for any user at any particular time, but we lead with operator billing because the client and consumer find it the best method for purchasing digital content," Leyland says.
Bango also provides smartphone data reporting and metrics for app stores, mobile operators or software publishers and developers.
Bango says its services now reach 1 billion mobile phone users, and has 200 milllion enrolled users.
Companies providing carrier billing seek markets that may lack smartphones because their service works through any phones, says Adil Moussa, payments strategic marketing analyst at Omaha, Neb.-based Adil Consulting.
"There is a need for direct-billing services because some people don't have the time to mess around with online payments or downloading apps," Moussa says. "With direct billing, you basically get a text message alerting you of a service being added to your bill."
However, some direct-billing providers have suffered from poor financial footing because of customer service costs, Moussa says.
"Many consumers don't understand the pricing attached to it and they end up calling customer service to better understand the fees or ask questions about what they signed up for," Moussa says.
Bango has been fortunate in that its customer service costs have been minimal, Leyland says.
The merchant of record would deal with any questions or complaints related to purchases made through the Bango platform, Leyland says. Bango is not listed as the merchant of record with many of its clients, he says.
Bango is the merchant of record on all transactions taking place through Facebook or BlackBerry, but the percentage of refunds to sales is "negligible," Leyland says.
"You can gauge our customer service costs through the fact that we have only one person handling complaints and customer issues," Leyland adds. "I can assure you that means our customer service costs are not very much."