FTC to Host Mobile Cramming Roundtable; Protecting Consumers in the Mobile Marketplace; Project No. P134803 #564482-00003

Submission Number:
564482-00003
Commenter:
Michael De Jongh
Organization:
MACH
State:
Outside the United States
Initiative Name:
FTC to Host Mobile Cramming Roundtable; Protecting Consumers in the Mobile Marketplace; Project No. P134803

In order to maximise revenues, app stores and merchants need to make the billing process as simple as possible – because the more complicated the payment process is for consumers, the less inclined they will be to see their purchase through. Until recently apps developers have been hindered by the lack of a solution to effectively monetise their products across all mobile platforms. Consumers are looking for a reliable and quick user experience, while operators and developers want greater price flexibility and an assurance against revenue leakage. But premium SMS and credit card payments can be cumbersome, fiddly and potentially insecure or lacking in transparency. Both have failed to provide a smooth monetisation path for developers, apps stores or content providers. By integrating directly with a mobile network operator’s billing and charging environment, direct operator billing provides various benefits associated with the monetisation of mobile apps. These include ease of payment for subscribers, enhanced customer satisfaction from immediate purchase responses, better security involving authentication in real-time, improved purchase conversion rates and very low customer support costs for merchants. Direct operator billing creates a more reliable settlement process, flexible pricing and support for a range of business models for app developers and publishers regardless of post or pre-paid subscriber services. Direct operator billing is seen as an increasingly vital part of growing the apps market. 85% of industry professionals surveyed by MACH at Apps World 2012 felt that DOB was key to increasing revenues, while a third of respondents, including apps developers and merchants, believe that deploying the frictionless payment process is likely to bolster their revenues by at least 25%. In line with this growth, regulatory bodies and micropayment schemes are playing an increasing role in preventing cramming and other micropayment frauds. For example, Payforit is the UK mobile micropayment scheme, created and supported by all of the UK mobile network operators. It enables consumers to use their mobile phone account or prepaid balance to transact securely and safely when purchasing content or services online. Safety and trust in the Payforit scheme is maintained by a process that accredits MNOs and then allows them to contract with a small number of payment intermediary companies. These intermediaries, known as Accredited Payment Intermediaries (APIs), provide the MNO-defined payment experience for consumers. Importantly, APIs also separate the role of the merchant (who is responsible for sale of their products to consumers and after sale support) from the transaction, in a model that is in line with other internet-based ecommerce services.