Great piece from an old colleague…i got on http://www.iafrikan.com/2014/04/07/is-airtime-the-solution-to-kenyan-apps-payment-issues/
One of the largest obstacles in making money off mobile apps or in app purchases has been the lack of an easy payment solution for both the user and developer.
Credit cards have not taken off, and people generally wouldn’t trust a local apps company enough to link their debit cards. MPESA is cumbersome, with all the steps required to complete a transaction, and (at the time of writing) Safaricom wouldn’t open it up for people to integrate into.
There is however, one solution I am curious as to why it hasn’t been explored further: airtime.
Airtime has been a way of making payments for ringtones on mobile for close to a decade now and would be a great way to enable people make in app purchases.
Samsung, Nokia, Google, Blackberry, all major players in the device and mobile OS space have been in Nairobi carrying out hackathons and trying to get developers to build for their ecosystems. None of them has tried to tackle the question of enabling payment.
Of course, Safaricom is known for its rather grabby hands on any commerce transacted on its network. Often, on the lower end, the final payment to a Premium Rate Service Rate provider or its client is 25% of what was billed on the customer.
With the large players’ help – Nokia, Samsung, Google – it would be possible to negotiate a better deal for app developers akin to the 70/30 split that apple offers through the app store. Not only that, publisher such as Nation could sell mobile – Android and iOS – m- and e-papers that would have a daily or monthly subscription fee, and that would not require entering of credit card and debit card details. All I’d have to do is download the app from my app store and voila. I’d get a charge on my airtime whenever I launched the app and there was a new paper.
It has been done with great success. Companies such as Cellulant grew on selling ringtones and collecting payment by airtime. So why aren’t more people utilizing this?
This article originally appeared on Joel Macharia’s blog.