Ericsson launches own in-app payment service

Swedish vendor Ericsson has launched an in-application payment service targeted at operators that want to allow consumers to complete purchases without having to leave a game or application. Consumers will be able to buy goods and services with just one click, whilst remaining in the app.

The service is based on Ericsson’s IPX service platform which is integrated by over 120 operators. It requires no credit card, allowing users to charge purchases straight to their bill, with the company saying that simplifying the payment service to the consumer should result in increasing numbers opting to purchase goods or services from their phones.

Research firm Ovum projects that revenues from paid mobile apps will top $3.7bn in 2011 and expects this to increase to $7.7bn in 2016.

“People are spending increasing amounts of time and money on applications,” said Adam Kerr, head of Ericsson’s M Commerce business. “But in order to reach these kinds of numbers it has to be easy for the consumer.”

The in-app payment service allows retailers to flexibly offer a range of payment models, such as allowing consumers to try before they buy as well as rental and subscription models.

The model can be applied to game levels, maps, and digital content such as music, books and other in-application assets, said Ericsson.

Jean-Noel Georges, global program director for ICT – smart cards group at consultancy Frost & Sullivan, explained that Ericsson’s launch is not the first time that an in-application payment service has been released. Google revealed similar solutions for the game and entertainment market in January 2011 and in-app purchases have been available via Apple’s App Store since October 2009, and since September 2010 from the BlackBerry Application World.

“But for the first time, and based on a strategic platform approach, Ericsson is providing a range of payment solutions for better end-user consumer experience across several countries,” said Georges.

“According to the company, rental subscription, try-before-you-buy, embedded application, in-game economies and other business models are supported. The limit between virtual and physical world is much more complex. This is why physical shops are also promoting physical goods across the digital world. And as a reverse process, virtual goods as weapon for game or access to the next game level could be purchased by using “real” money across this platform.”

“And to be able to capture all kind of possible revenues, virtual money is also available for really small amounts such as cents transaction.”

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