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AT&T trials direct mobile billing partnerships

Thu 28 Oct 2010 1:46pm GMT / 9:46am EDT / 6:46am PDT
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US communications company AT&T has begun a trial scheme of direct to mobile billing partnerships with leading mobile billing companies, echoing a similar move by rival carrier Verizon Wireless earlier this year.

One of the major implementations of mobile billing is for social game microtransactions, allowing in-game purchases to be charged to a mobile bill once a confirmation SMS has been replied to by the mobile owner.

It's not a particularly new system, but until now the rates charged by carriers have been crippling to the payment companies and the apps they've been pitching to. The engagement of the carriers with the system - accompanied by a drop in charges from up to fifty per cent down to a figure in the teens - shows that the method could well be gaining ground in the increasingly valuable sector.

Whilst the main thrust of the move is to bring down costs associated with the method to make it more attractive for developers, direct mobile billing also offers a spur-of-the-moment payment alternative for those without credit cards or PayPal accounts.

However, these methods will still be cheaper to use, with PayPal having announced a new microtransaction fee model yesterday which charges only five per cent plus five cents for each transaction processed. Most credit card companies also charge a single digit percentage.

"We're not trying to cannibalise credit cards or an other payment options, it's incremental," said BilltoMobile CEO Jim Greenwell. "There's no registration, no friction. Just input the phone number and get a text message confirmation. That's as safe as you can get if you're doing an impulse purchase."

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