Boku launches in-app billing for Android

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BokuLaunched last year, Boku is a payment platform for Android phones that uses carrier billing to charge payments. Boku does not require users to own a bank account or credit card: users enter their mobile number into the payment gateway and then reply to a text message from their mobile operator, which in turn charges the payment to the user’s mobile phone bill instead.

Now, Boku has launched an in-app billing library which lets Android app builders monetize their own app by utilizing the Boku Payments SDK.

The iPhone platform has supported the idea of in-app purchases for over a year now, but until now there has not been an Android equivalent. As consumers are increasingly buying Android phones there is clearly a profit opportunity – PayPal just launched its Mobile Payments Library for the Android operating system. Boku differs from PayPal in that it bills straight to the user’s mobile phone account so users don’t need to sign up for a PayPal account, which you can only do if you have a bank account or credit card.

The flipside of carrier billing, unfortunately, is the high fees that mobile phone operators charge on any billing done by text message on behalf of a third party. This operator’s fee can be anything from 10% to 50%. This is a huge obstacle for app developers but Boku’s marketing chief Ron Hirson believes that the company will eventually remedy this issue – it is currently undergoing negotiations with mobile phone operators.

Boku’s SDK can process payments in over 60 countries, covering over 200 mobile operators worldwide. This, coupled with the fact that carrier billing provides app builders access to almost all mobile phone users across these networks should give it the critical mass it needs to build an essential payment system – but the high fees mobile phone operators will skim off the transaction value remain a huge hurdle.