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App store carrier billing specialist says it is ‘only’ processor of carrier billing transactions across all four major U.S. MNOs.
Bango, the app store carrier billing specialist, has acquired BilltoMobile, the U.S.-based carrier billing services of Danal, for $3.5 million initially in order to expand its position in the U.S. market.
A deferred payment of about $35,000 may become payable in cash in Q1 2017 depending on the performance of one revenue stream. In addition, Bango will pay certain fees in connection with the acquisition, which are expected to be $215,000 and relate to the migration of services from Danal.
BilltoMobile services processed approximately $80 million of end-user spend in 2015, which Bango noted made it the largest carrier billed payments processor in the U.S. by volume.
Indeed, Bango said the acquisition means it is now the only processor of carrier billing transactions across all four major U.S. mobile network operators. It noted that BilltoMobile is currently the only operator service integrated into all four MNOs, covering over 300 million connections. It processes carrier billing payments for app stores and major merchants including Google Play and Microsoft.
Carrier billing refers to the practice where consumers pay for digital goods and services, like content and apps, via their phone bill or prepay balance.
Bango added that mobile operators that have adopted the Bango Boost analytics technology – which forms part of the Bango Payment Platform – have seen an increase in revenue by “up to 70%”.
In a recent white paper, Ovum said it believes that carrier billing is a growing market, with a total transactional value of around $16.6 billion in 2015. The market is forecast to reach $25.3 billion in 2020, with a number of barriers and drivers in place.
The research company divides the carrier billing market into seven segments: OS app stores, indie stores, PRS/feature phones, browser-based, online PC games, bundling/off-store apps, and physical goods.
However, Ovum warned that carrier-driven payments including carrier billing will make up a decreasing share of global m-commerce revenue if the market barriers that currently constrain their growth persist.
“On their current course, carrier-driven payments will make up only 0.8% of m-commerce revenue by 2020. But if market stakeholders work in unison to lift these barriers, carrier-driven payments – to which carrier billing and mobile money services are the biggest contributors – could equal 11% of m-commerce revenue, or $142 billion, in five years,” Ovum said.
The company noted that while carrier-driven payments have secured a stake in the digital goods space via carrier billing, they have yet to make any significant impact in the physical goods space, “which represents the largest opportunity by far in the exploding market for e-commerce payments on mobile,” Ovum said.
