Choose speciality channel:   Choose sector channel:     Search the site

How to Guide


Mobile Marketing Week. How micropayments can generate revenue

Mobile Marketing Week. How micropayments can generate revenue

Demand for micropayments is increasing fast as social networking and dating sites wake up to the benefits of taking small subscriptions via secure SMS or voice billing services.

But with the organisations receiving only 66 pence in every £1 for micropayments due to network charges, compared with 96 pence for credit card transactions, there is a very real danger that the market for micropayments for a range of online goods and services could be severely constrained argues Colin White, UK CEO, Oxygen8 Communications.

Whilst providers of online goods and services continue to buck the economic downturn, it is clear that a significant proportion of potential online revenue is being lost due to the near reliance on credit cards for payment.

A number of micropayment solutions have been introduced in recent years, but a lack of global integration and the complexity of attempting to manage different mechanisms across different countries and networks have deterred the vast majority of organisations from supporting any payment option other than credit cards.

But, as a growing number of organisations are now discovering, the arrival of viable, global micropayments technology is opening up a whole new revenue stream.

A global micropayment service using SMS or voice billing as available across each continent provides organisations with a fantastic opportunity to achieve new revenue streams, and not just with products aimed at the younger demographic unlikely to hold a credit card.

There are very real opportunities to also offer micropayment facilities for additional services such as in hotels – reducing the need for late night reception staff to process payments, for example.

Evidence is growing that the adoption of micropayments opens up a massive untapped market – with no upfront investment. However, one of the key concerns for many organisations assessing the pros and cons of micropayments is the network tariff.

And for good reason: whilst organisations receive 96% of  credit card based transactions, high network charges mean only 66% of the payment is received from a micropayment.

For any organisation with a low margin product or service offering, this approach could theoretically make micropayments unfeasible. However, early adopters of this payment method have demonstrated that consumers are actually happy to pay more to leverage the flexibility and ease of use of micropayments for the time being.

By offering the customer the option of making a micropayment but charging a little more (grossing up), the organisation can maintain its margin without cannibalising the existing customer base.

With the right integration into the core product/service software, it is a simple process to offer two prices – one for credit card transactions and one for micropayments – enabling the customer to make the choice.

Key to user adoption of micropayments is the delivery of a completely seamless, flexible service irrespective of country or network. Micropayments must also be easy to use, secure and support a wide range of payment values – from the €1 ringtone download upwards. 

Delivering this consistent service globally is a major challenge for many providers of micropayment solutions. The payment market is highly regulated – for obvious reasons. Organisations must comply not only with local, state and national regulations but also meet the demands of each network supplier in each country.

Furthermore, payment technologies need to be integrated with back-end customer service and web content management systems to deliver a complete, auditable solution.

To achieve this successfully and rapidly requires significant expertise and experience of different global markets. It demands strong integration skills and the ability to rapidly respond to organisational requirements to roll out into new markets to address customer opportunities.

With the right technology, infrastructure and experience, micropayments technology can actually be deployed within days, with little or no upfront investment, allowing organisations to trial the technology in specific markets to assess its potential.

Those organisations that have opted to trial micropayments have all opted to extend the service across new geographies as a result of a significant increase in revenue. 

Customer feedback reveals that the process is simple to understand and extremely transparent; whilst there is strong anecdotal evidence that organisations are achieving higher conversion rates via micropayments than credit card payments.

A major shift is on the way: micropayments not only offer unprecedented ease of use for the consumer, overcoming the resistance to buy online via credit card, but also provide the opportunity to leverage the billions of mobile owning individuals globally to add revenue consistently and easily for a range of online goods and services.

By agreeing to operate on smaller margins, it is likely that the networks could precipitate a massive adoption of micropayments that would generate significant additional revenue. Without that change in policy, the real micropayment opportunity could remain untapped.

coupon for viagra coupon for viagra coupons viagra
coupon for free viagra site prescriptions coupons
how much is the abortion pill where can i get an abortion pill
doxycycline intrapleural injection doxycycline intrapleural injection doxycycline intrapleural injection
amoxicillin 500mg capsules how often amoxicillin 500mg capsules how often amoxicillin 500mg capsules how often
late abortion aborted babies
coupons prescriptions prescription savings card
prescription savings card go cialis discounts coupons
cialis price store discount cialis coupon generic cialis source
renova renovation vejle
pletal 50 pletal 50 mg pletal y anestesia
lilly coupons for cialis free prescription cards
microlite pill when to start microlite pill when to start

Check out 12ahead, our brand new platform covering the latest in cutting-edge digital marketing and creative technology from around the globe.

12ahead identifies emerging trends and helps you to understand how they can apply to modern-day companies.

We believe 12ahead can put you and your business 12 months ahead of the competition. Sign up for a free trial today.