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Do Customers and Carriers Even Want It?
I was still wondering why more carriers weren’t enabling billing integration with app stores when it occurred to me that they might have figured out that either customers said they didn’t want it or carriers didn’t want to deal with potential fallout from it. Ricci said that evidence suggests consumers want carrier billing as an additional option. “We know from our conversations with service providers and folks in the technology branded app stores that consumers will spend more when they have more choice and more timing options around payments,” Ricci said.
That makes sense – customers don’t necessarily know that they want carrier billing, they just want as many options as possible. So what about carriers? Do they fear billshock, overloaded call centers, and invoices jammed with cryptic line items no one, including contact center reps, can understand?
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1.7 million consumers bought iPhone 4s in its first three days of sale, worth more than $9 billion over the next five years. |
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unwind a complex content and settlement transaction and properly credit the end customer.
Still, if Apple doesn’t bother, why should a carrier? It’s not like Apple is taking a beating because people can’t dispute app charges. Ricci says it’s pretty simple: Apple doesn’t put a customer service 800 number on the iTunes store for handling billing issues. There is one on every carrier bill. Plus, carriers already receive calls about apps because customers assume that if it’s on their cell phone, it’s somehow the carrier’s problem to fix, even when it absolutely isn’t.
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“This is the crux of the issue,” Ricci says. “One of the major problems with Premium SMS is that you’re limited to how much you can communicate about the service in a line item on the invoice… When you go back to the consumer interaction with these charges, once they have transacted them, what happens if the consumer wants to dispute them? That’s a big challenge today,” she says.
Ricci adds that most technology brand app stores—the iTunes store in particular—do a poor job of handling or even enabling billing disputes. “If you download something from iTunes and you don’t like it or think it was wrongly charged, there’s virtually no way to dispute that charge and get your money back.” A major issue for carriers in providing integrated billing for apps is dealing with an increase in disputes, the cost associated with it, and the sheer complexity of setting up audit trails and financial mechanisms that can
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Why Not SMS?
Some apps are the carrier’s responsibility and end up on carrier bills. Those are on-deck apps and premium text-based services that are billed through short code mechanisms.
This is one interface carriers have opened up to allow for third-party billing of content-based services directly to wireless bills. But this channel is stigmatized thanks to scams and schlocky offerings, and is very limiting for customers. “Even before these technology branded app stores launched I remember players talking about premium SMS as a billing mechanism is a dying process and…it’s too clunky,” says Ricci. “It’s limited to one process—buy something, get a fixed price for it, and the descriptor ends up on your invoice. They (technology branded app store providers) want more billing process options. Those options may take the form of subscriptions, transaction events that happen within a gaming session, and price variations, none of which can be supported effectively through the short code billing channel.
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