Spring 2013

With guest articles written by Bango news The skinny on operator billing In this issue:

000% increase” is an eye-catching statistic, and one pay conveniently with their mobile phone account or who simply have Operator billing - the future of that even took us at Bango by surprise. Yet this is indeed no other method of payment for online purchases. mobile payments is already here . . . . . 2 the dramatic increase in sales of digital content made in ‘‘1 Yet adding operator billing does not, on its own, achieve the full some markets when the ability to make operator-billed purchases is potential of mobile payments. Many users are connecting their The giant Wi-Fi challenge ...... 2 opened-up. It’s an eye-watering figure, but simply shows that very devices to Wi-Fi networks, widely available at home, work and in a few users in large parts of Asia, Africa and Latin America are able or growing number of venues. At a fixed cost, or provided by the venue, The smartphone market is willing to use cards to make online payments. And it would be false Wi-Fi is a good option if you are consuming data-rich media on your to assume that per capita wealth is the simple indicator of propensity no longer a two horse race ...... 2 device (read “The giant Wi-Fi challenge” in this newsletter). to pay. In high per capita markets of the Middle East, or Germany and Japan, up But Wi-Fi connections present a challenge to the popular charge- Increasing operator billing to 90% of payments will to-bill payment option. How does the content provider or store know success with Bango ...... 3 be charged to the which mobile network to charge the payment to? After all, the user has phone bill when not connected through an identifiable operator network connection. Connecting with the app stores ...... 3 the option is One way is to ask the user to identify themselves and their network by offered. adding information to their phone or tablet screen. But this disrupts Carrier billing through a simple, clean checkout flow, introducing additional steps and We have become BlackBerry World ...... 3 increasing the overall “friction” of what should be a simply presented familiar with an “select and pay” user interface. equally surprising Using mobile analytics to jump in sales Handling payments for Wi-Fi connected device users is where the Bango drive success ...... 4 of around 200% Payments Platform introduces clever pre-authentication techniques. when operator This technology ensures that a billable customer identity can be used to billing is introduced offer a one-click payment confirmation, just as if the user was connected alongside card to their operator’s network. Ensuring that on-device payment is payments in markets efficiently presented and processed for users who hop between different that are early adopters connection networks means the increase in digital content sales can of connected devices. jump beyond 200% to 300% or more. The advantage of running a Post-introduction, there cross-merchant payments platform is that payments processed recently appears to be negligible for one store can provide vital authentication data that can be used to churn – only a very small process payments for another store. number of users who have We believe that this capability will become increasingly fundamental paid with a card switch to a successful payments infrastructure. Using Bango Analytics to to their phone bill once it analyze how people connect and use their devices, we see that for becomes available. What some countries nearly 90% of payments are processed when the user operator billing is doing is is off-network. tapping-in to a significant base of customers – the vast Operator billing will turbo-charge sales of digital content, and when majority, according to the data enhanced through the Bango Platform it becomes a potent force for – who own a device but prefer to mobile monetization. Telefónica and Bango partner to expand mobile payments

Guest article written by Jose Valles, Head of BlueVia, Telefónica app stores, supporting operator billing and other payment methods through a single, common platform. The advantage to the customer lueVia is the global developer platform from Telefónica that is a seamless payment flow with no requirement to enter personal helps developers take apps, web services and ideas to market. information or leave the payment session. BBlueVia focuses on offering a simple way to charge customers directly on their phone bill with minimal friction for all parties We are happy to announce our partnership with Bango, which is involved in the payment flow for digital content services. We offer our a great step towards making life easier for customers and helping partners a single direct to bill payment API, with no need to integrate developers monetize their products, Jose Valles, Head of BlueVia, with multiple countries across the Telefónica Operating Businesses said on the subject of the Bango partnership: “At the heart of – BlueVia handles the complexities of billing integration in a single every great service is first class customer experience and both API. The ability to pay for digital goods and services via a mobile Bango and BlueVia share the vision that mobile payments phone bill is a key way for content owners and developers to fully must be seamless and low friction for the customer. Through monetize their products. This is especially the case in developing this partnership, we are delivering a mobile billing ecosystem markets, such as Latin America, where penetration of bank accounts that empowers the app store and content owners to achieve and credit cards is very low. Trials of direct to bill in Telefónica mass scale in their business through global reach and a operating businesses have proven its ability to drive sales. payment method far broader than credit cards”.

Providing alternative payment choices can only benefit app stores, Great for consumers of digital products and services, upside and content owners and their customers, by integrating operator billing growth opportunity for merchants of digital content, amazing for into websites, web apps and applications ensures that however developers who benefit from more payment options, we think Direct 2 the customer wants to pay they are covered. To the developers, it Bill mobile payments are pretty exciting! means that they have a secure way of allowing users to pay for digital products and for the customer, they have a payment brand they can trust. This is why we are working with payment partners like Bango and app store providers to enable seamless operator billing.

A key goal of the partnership between Bango and BlueVia is to accelerate the availability of a standardized and open payment platform for all app stores and content providers and to dramatically improve the customer experience. The platform will be available to all Source: Bango Operator billing - the future of The smartphone mobile payments is already here market is no

Guest article written by James Wester, Editor, Mobile Payments Today There are obviously still issues with operator billing that will need to be addressed as it grows. Consumer protections, security and longer a two education are all necessary to ensure that it continues to flourish as a means of electronic payment. But those issues will be addressed horse race in time because, at its core, operator billing is smart, seamless and dependable. t the start of 2012, everything focused on two major In both developed and emerging markets, operator billing will continue smartphone platforms – Apple iOS and Google Android. s a tech writer covering mobile payments I get a lot of to show a growing number of consumers just how a mobile payment During the year Apple launched the iPhone 5, two iterations questions about the space, due in large part to the hype that scheme should really work. It may still have to compete for attention A of their iPad with retina display and the iPad Mini. Meanwhile, A seems to surround it. One of the more frequent questions I with other mobile payment methods, but when dealing with financial Google helped power Samsung’s huge success along with new get is some variation of “When will mobile payments really catch services, smart, seamless and dependable beat sexy every time. devices from HTC, Sony, LG and their own Nexus branded phones on?”. My answer is always the same: mobile payments have caught and tablets. But as we enter 2013, everything is set to change… on. What’s more, they’ve been around for quite some time. Apple continues on their relentless path of refined evolution, taking For many people, especially those who consider themselves relatively care not to change the formula too much. Their platform remains tech-savvy because they carry the latest smartphone and download traditionally icon based, and surprisingly for such a media centric the hottest apps, that answer comes as a bit of a surprise. After all, device, it continues to fall below HD quality (720 lines). efforts from Google, PayPal and Weve have been slow to develop. Google meanwhile transitions Android from Jelly Bean to Key But it’s true: consumers already have a fully-functioning mobile Lime Pie. Their hardware partners continue to innovate, with the payment method, albeit one that is, frankly, a little unsexy. It’s operator latest smartphones sporting full 1920x1080 resolution displays. billing and it’s unsexy because it works so reliably and so well for There are also signs of consolidation as major brands focus on a so many people. And even if it lacks sex appeal compared to other, smaller number of core handsets, with the Samsung Galaxy Camera more hype-worthy mobile payment initiatives, it’s growing by leaps perhaps being one of a few interesting exceptions. and bounds. The main change as we enter 2013 however is the huge growth Operator billing is providing a crucial link for millions of consumers in alternatives to Apple iOS and Google Android, many of which around the world to online commerce, entertainment and financial come with substantial industry backing. First up is Mozilla Firefox inclusion. It lets people who may not have ready access to credit or OS, or Boot to Gecko as it used to be known. This web-centric bank accounts, or prefer not to use them, participate in an increasingly mobile OS is being targeted as an affordable smartphone with the mobile economy. For many young consumers, for instance, operator backing of major operators such as Telefónica. Next we have Tizen, billing is the only option they have to connect to popular social media the Linux Foundation project sponsored by Intel that has Samsung and gaming sites. And that’s why so many social media and gaming committing to release numerous devices in multiple regions – from sites like Facebook and Google Play are partnering with operator affordable models, right up to flagship smartphones. billing providers to provide it as a payment option. The Linux leader Canonical not only announced Ubuntu for Android More importantly, operator billing is altering the way consumers – a Linux layer for existing Android phones, but they also announced worldwide live, shop and save. For consumers in developing Ubuntu for Smartphones – a complete mobile OS to be launched economies, lack of access to credit cards or bank accounts isn’t next year in partnership with operators and handset manufacturers. a matter of convenience; it’s a matter of survival. And in those For those of you that remember the interesting Meego mobile developing economies the cellphone is providing access to basic and operating system developed by Intel and Nokia, there is also Sailfish necessary financial services. To those consumers in markets where from Jolla, a group of ex-Nokia Meego developers. banks aren’t on every corner, and a trip to the ATM can take a day, the ability to access financial services through a simple feature phone In addition to all these new mobile platforms there are a number by leveraging a operator relationship means both security and the of refreshed, more established platforms, such as Windows Phone opportunity to participate in the larger economy. That’s good for them 8 from Microsoft and the new BlackBerry 10 from BlackBerry. and good for their economies. Nokia recently announced its first profits for some time, which they attributed in part to the sales of Lumia Windows Phone devices. The Microsoft platform certainly goes a long way to improve upon the old icon interface so familiar on Apple smartphones. Windows Phone 8 was launched towards the end of 2012 while version 7.8 will refresh The giant Wi-Fi challenge current phones later this year. BlackBerry 10 is winning very positive reviews immediately after its end of January launch date. This new here are certain universal truths in the mobile age. One of • Globally, 33% of total mobile data traffic was offloaded onto the BlackBerry platform has taken its time to come to market – all part those truths is that our data usage, already at historically high fixed network through Wi-Fi or femtocell in 2012 of their plan to deliver a smartphone for the next ten years. Lastly, levels, will continue to rise. rumours of Amazon and Facebook phones continue to do the T There is a thriving industry for technology to manage this “offloading” rounds and only time will tell if there is any substance behind them. The smartphone revolution, the emergence of mobile apps, next or “handover”, but little to address the central mobile payment generation networks from the operators, all have contributed to our challenge, which is this: If we pass the user off the operator network, All these new platforms appetite for more and faster data. The Cisco Visual Networking Index how can we continue to identify them, in order to bill them? give operators flexibility, keeps a track on such things. They recently reported: allowing them to innovate and This is no small challenge. Operators are increasingly looking to leverage differentiate in all markets. They • Global mobile data traffic grew 70% in 2012 operator billing in order to stem the tide of revenue that’s flowing towards present a significant opportunity Google, Apple and others. To do so, they must offer a frictionless • Last year’s mobile data traffic was nearly twelve times the size of to generate charge-to-bill revenue payment experience that’s at least equal to the credit card based the entire global internet in 2000 from the content purchased checkout offered by the big app stores. The big advantage they have is through these platforms, but • Mobile video traffic exceeded 50% of overall traffic for the first time in identification of the user, but they risk ceding this advantage if there’s more platforms does mean more in 2012 a parallel process to offload users onto someone else’s Wi-Fi network. integration and deployment • Average smartphone usage grew 81% in 2012 Bango powers payment and analytics on the mobile web, providing complexity. This is where the users with a massively smooth payment experience. Bango’s unique Bango Platform becomes crucial. • Smartphones represented only 18 of total global handsets in use in proposition is the ability to identify users and develop a billing-grade Bango provides a single point of 2012. Translation – The rise in smartphone usage is nowhere near identity, even when the user is connected via Wi-Fi. integration across the fast growing its peak number of mobile platforms, Customers who plug into Bango include Facebook, BlackBerry Faced with this runaway train, the response of the mobile delivering advanced mobile World, Windows Phone Store and others. As a result, networks has been varied. Of course many are billing and measurement Bango has built a pervasive presence across building out fourth-generation (4G) networks. capabilities. Bango is the mobile web, creating a platform effect This could be termed the conventional currently integrated with for partners, identifying hundreds of millions approach: Build new infrastructure at huge Google Play, BlackBerry of users and maximizing the number of one- cost, with the expectation that the consumer will World, Windows Phone click payments. In early 2013, Bango has a total eventually fund the investment. The problem is that Store, Opera, and reach in excess of one billion mobile users, and has operators are finding it difficult to pass on the real costs Facebook, with more developed more than 200 million user identities. of data usage to their consumer base. Most smartphone users on the way soon. By are on fixed-price data tariffs, with relatively high download Mobile operators look to Bango to connect them to the world’s partnering with Bango, limits, and our appetite to pay more is extremely limited, in the largest app stores, and to provide that vital one-click payment operators (like Telefónica) knowledge that we could always call another network and grab experience, even to users connected on Wi-Fi. Bango has built have ensured flexibility to one of their “great deals” for new subscribers. This is a major direct billing connections into more than 90 mobile operators around innovate, accelerated time battle that will play out over the coming years, but there’s a second, the world, and continues to grow rapidly. By working with Bango, mobile to market and the cost more guerrilla approach: Bounce the user on to a Wi-Fi network where operators access the only mobile payment proposition that’s effective on controls required to succeed possible, which brings us to another of Cisco’s findings: an app store scale, and appropriate to today’s Wi-Fi world. in 2013. Increasing operator billing success with Bango

nce, to make an online purchase, the few people who allows the customer a choice of ways to pay. Bango’s value is a cloud- Here’s how: owned a computer would have to link it to a recognized based platform, where the ways that customers prefer to pay are - Bango gives more users of internet devices a way-to-pay Obank account, register on websites, and enter a verifiable captured, optimized and stored, so that every merchant-customer delivery address for the item to be couriered to. Now, everyone can payment exchange is efficiently, reliably and safely delivered for - Bango opens-up more payment methods for customers to use buy online using devices specially designed for reading, playing, both parties. - Bango generates more one-click payments, with no requirement viewing, listening, socializing and much more. The platform connects any internet store, or content publisher, to to register Today, there are over 4 billion connected devices that give access to billing services and the billions of people that can use those billing - Bango enables users to pay in the same way across all devices a wider choice of content and services than has ever been available services. In between sits the Bango Platform which continuously and all ways of connecting before. These devices are purpose-built to enable the purchase and works out the best way for each transaction to be processed. In consumption of music, movies, books, magazines, games and vast doing so, the platform optimizes the payment experience delivered to For our operator partners, the Bango promise is to increase the numbers of specialized apps. millions of users in ways that individual merchants and billers cannot success of operator-billed payments across new content and channel do on their own. partners. We are the world leader in bringing operator billing to “app In the Bango vision, the barriers between buyer and seller are stores” and optimizing mobile payments across all devices. With the eliminated. The connected user no longer has to commit to a For Bango and our customers, payment ubiquity means greater global network of operator partners connected through the Bango preferred seller or service provider, they can shop wherever they choice, more sales and more customers for every online business. Platform, our goal is to put payments in the hands of mobile device want, whenever they want. The Bango promise is that content owners will make more sales to users everywhere. more customers through Bango than by any other method. Bango makes it easy to pay, yet Bango doesn’t do payments. Bango Connecting with the app stores

espite the on-going challenges in the global economy, the app ii) Between 50% and 80% of smartphone users browse and economy continues to be healthy and vigorous. Consumers’ download content off-net, typically through a fixed cost or free Dappetite for an internet experience from smartphones, tablets Wi-Fi connection. Providing a simple operator billing experience and other connected devices seems to be insatiable, as ownership for Wi-Fi connected users is therefore critical to making operator of these devices proliferates. Data from multiple sources indicates billing a success that AAPU (average apps per user) is growing, and the number of However you, the network operator, formulate your commercial consumers connected to app ecosystems is growing as well. relationships with major app store providers, leveraging the existing Large-scale app ecosystems built around a particular device platform technical connectivity operated by Bango delivers performance, cost, continue to appear, with the recent parallel emergence of more vertical and time-to-market advantages. Time-to-market, of course, means time stores, aligned to a particular user experience or context for use. Some to revenue, and as we say throughout this newsletter, the app economy stores are multi-modal, which is to say they will configure themselves to starts to work when it starts to generate revenue. reflect a work mode versus a home mode or travel mode, for example.

What all these stores have in common is a commercial process for developers to sell content. Content can be priced in local currencies, and offered to the customer on a pay to use basis, as a recurring charge subscription, and increasingly using more innovative payment models such as pay-per-use, or free to download with charging for specific features embedded “in-app”.

With so many content channels available to consumers through so many more devices, the opportunities for commercial content are greater than ever. What has changed are the ways in which content can be commercialized in the era of the mobile internet. In particular:

- More customers have a way to pay for apps than ever before, using their mobile phone bill

- Low value payments are available to mobile users, which opens-up more charging options to content owners – like pay-per-play

- The simplicity of on-device payment gives a boost to in-app charging models, where secure one-click payment is essential

Bango is experiencing widespread interest in our mobile payments platform, to generate the best payment experiences for app store customers. The app economy only makes sense if developers and publishers can make money from their content and innovations. The challenges are i) how to get operator billing implemented across a wide range of app store models, and ii) how to ensure that all subscribers can choose to pay on their phone bills.

i) To get operator billing implemented across 6-10 major app stores (OEM stores, software platform or operator system stores, major online retailers etc) would take an operator around 2.5 years in total. Through Bango, multiple stores can be delivered in just a few months

Carrier billing through BlackBerry World

Guest article written by Chris Halabecki, Strategic Business Carrier billing services have proven to drive significant value for the Development Manager, BlackBerry whole mobile ecosystem, including carriers, developers, content providers, and customers. Aggregated data indicates that customers’ lackBerry has worked with Bango and our carrier partners to propensity to purchase apps on BlackBerry World increases when implement carrier billing as a payment option in the BlackBerry carrier billing is offered, with an average of 75% of gross sales World storefront with more than 50 carriers worldwide. B transacted through the carrier and average carrier revenues derived In addition to enabling customers with the ability to purchase digital from apps increased between 100%-300% after launch. content and apps from the BlackBerry World storefront and charge this BlackBerry World is now available in 170 markets and territories to their carrier bill, carrier billing is also integrated with the BlackBerry worldwide offering more than 100,000 BlackBerry smartphone apps Payment Service, which enables developers and content providers to and over 70,000 apps for the recently launched BlackBerry 10 platform. offer in-app purchases (such as additional levels in a game), as well as supporting one-off and recurring (subscription-based) purchases, For a complete listing of carriers offering integrated billing on BlackBerry without interrupting the customer’s app experience. World please visit: developer.blackberry.com/devzone/appworld Using mobile analytics to drive success Gain key customer insights with Bango Do you have full visibility into what your mobile users are doing? The ability to correctly identify mobile device users is imperative to accurate measurement. Bango Analytics delivers the foundation for nsight into user behavior provides valuable information for you to Analytics: success through detailed accurate data using a unique anonymous make important content, marketing and desi gn decisions. From user ID. Optimum customer insights can only be gained by covering helping optimize messaging and navigation, to delivering the best • Understand unique visitors to your mobile properties I a number of challenging tasks, such as identifying unique users results for partners distributing through your mobile sites, mobile connecting over Wi-Fi, and matching them to the same user connecting • Identify users to your mobile properties connecting analytics plays a vital role, delivering customer insights from your via an operator network. Triangulating unique identification data can over Wi-Fi mobile websites, in store propositions and preloads. only be assured by gaining information from third parties including • Identify users outside of your subscriber base for Mobile analytics enables you to understand unique visitors, devices browser manufacturers, device makers and operators for accurate engagement used and user behavior on your mobile sites, plus app downloads / identity of individuals. purchases for your in store propositions and preloads. Engagement • Understand how visitors interact with your mobile Feeding the virtuous circle of improvement, mobile analytics with prospective customers is also made possible via your mobile sites and which pages and sections are most enables you to test, measure, understand and improve your mobile website using analytics. By identifying subscribers on different popular channels to deliver results. Take a look at how Telefónica UK have networks you can offer them a personalized experience encouraging done just that by using Bango Analytics – read the case study at • Get a clear picture of purchases and downloads of apps them to switch to your network. On the flip side you can also ensure bango.com/casestudies it’s a platform that promotes loyalty from existing customers. • Identify the most popular handsets visiting your mobile properties to deliver an optimized user experience • Monitor traffic visiting your mobile properties in real-time to optimize visitor paths and activities as they happen • Track user engagement levels including depth, duration and frequency of visit

Billing and payment About Bango

for online content: n the era of mobile technology, collecting payments has emerged for partners, identifying hundreds of millions of users and maximizing Realising the mobile as a central and complex challenge. Bango powers payment and the number of one-click payments. Global leaders plug into Bango: Ianalytics on the mobile web, providing users with a massively customers include Facebook, BlackBerry World, Windows Phone smooth payment experience. Store, Amazon and major mobile brands including CNN, Cartoon operator opportunity Network and EA Mobile. Bango’s pervasive presence across the web creates a platform effect his white paper, published by Innovation Observatory, Tand sponsored by Bango and Aepona, looks at how mobile operators can earn revenues from the billing and payments processes for mobile and online content. Contact us Including a thorough examination of the digital mobile payment value To discuss how you can boost your revenues Martin Harris, SVP Strategic Accounts chain and the position of operators within it, the paper outlines some from major app stores, brands and channels by Call +44 779 617 5555 of the factors operators must integrating with the Bango Payments Platform or +44 1223 269 579 consider in order to defend and contact: or email [email protected] improve their share of this rapidly growing market.

Download your free copy from bango.com/whitepaper

USA UK Bango, 20 West 22nd Street, Bango, 5 Westbrook Centre, Suite 906, New York, NY 10010 Cambridge, CB4 1YG Tel: +1 866 528 6897 Tel: +44 1223 472 777 Fax: +1 646 475 2231 Fax: +44 1223 472 778 [email protected] [email protected] bango.com