Micropayments

ocallagh

Has anyone got any experience with micropayments or mobile phone payments?

I'm working on an iphone application for a client and they plan to charge the customer for doing certain things on the app. The amount will be in the region of 20c to 50c.

I have thought of a few methods for doing this.

1) Prepaid credit.
The customer purchases prepaid credit on the client website using Realex and each time they perform a billable action within the app their account is debited.

2) Micropayments
Have an agreement with operator and customer to charge the 20c to the customer's mobile phone bill each time they perform a billable action.

3) Premium SMS
The app will generate an SMS to a premium number. I don't even know if this is possible within the iphone SDK and I know the premium SMS rates are huge.

Ideally option 2 would work best. The prepaid option is the simplest (and the most cost effective) however it has it's problems as the service cannot be interrupted by lack of credit, and also customers may not have business credit cards at their disposal. I know it sounds like a ring tone app or something, but it's actually targetted at a very small industry fixing a problem that has been there for years.

Has anyone got any suggestions on this?

oeb

ocallagh wrote: »

1) Prepaid credit.
The customer purchases prepaid credit on the client website using Realex and each time they perform a billable action within the app their account is debited.

This is the most common way of doing things. Allow them to purchase tokens or points or something.

ocallagh wrote: »

2) Micropayments
Have an agreement with operator and customer to charge the 20c to the customer's mobile phone bill each time they perform a billable action.

This would more than likely require a very large amount of work on the operators side, so unlikely unless you can make it worth their while.

ocallagh wrote: »

3) Premium SMS
The app will generate an SMS to a premium number. I don't even know if this is possible within the iphone SDK and I know the premium SMS rates are huge.

This method could be used with method one. IE send a premium sms and we will give you 20 points or whatever.

CuLT

20c to 50c? Ouch. Good luck to your client, micropayments that small are prohibitively expensive simply due to the overheads involved.

There's also the likelyhood that payments that small will simply be an irritant, and bleed customers to a similar free or ad-supported service.

I know it's hard as a developer, but if this is solving a problem as much as it is, it would be worth pitching a higher once off fee or a subscription based model to your client.

podgeen

Hi ocallagh,

Have you looked at the In App Purchase functionality introduced in iPhone OS 3.0?
I have not used it myself but I believe it should provide the functionality you are looking for. The payments will be processed through the users itunes account and you'll be paid monthly. There are no credit card fees but Apple will take a 30% cut.

The other option you have is to use a micro-payments virtual currency such as Social Gold or Spare Change. But this would require users to have an account with the virtual currency provider.

Dave

ocallagh

Thanks for the replies, completely agree mobile payments of less than 1 euro just ain't worth it really unless you have a high volume. I can get Realex down to 9c per transaction (with high volume) but need users to have credit cards... sigh. I'm amazed the likes of vodafone/o2 don't offer direct mobile payments through the bill as a standard service, they could charge a flat 20% fee or whatever - seems like a no brainer to me.

ocallagh

podgeen wrote: »

Hi ocallagh,

Have you looked at the In App Purchase functionality introduced in iPhone OS 3.0?
I have not used it myself but I believe it should provide the functionality you are looking for. The payments will be processed through the users itunes account and you'll be paid monthly. There are no credit card fees but Apple will take a 30% cut.

The other option you have is to use a micro-payments virtual currency such as Social Gold or Spare Change. But this would require users to have an account with the virtual currency provider.

Dave

Yep, I have looked into the App payments. Problem is the app will be roled out to alternative phones down the line, so the solution has to work with Symbian/Blackberry/Android etc. Had a look at a dozen websites that also offer services. They either offer a token based system as oeb mentioned, or others provide a premium number for the customer to sms/dial which debits their bill/credit however the charges are quite high.