Article published by Marina Proença, Head of Marketing at PlayKids, on LinkedIn Pulse.Read more
Article published by Luciana Carvalho, People Manager at Movile, on LinkedIn Pulse.Read more
Article published by Breno Masi, General Manager at PlayKids, on LinkedIn Pulse.Read more
Article published by our co-founder and Head of Global Expansion, Eduardo Henrique, on LinkedIn Pulse.Read more
When searching for the next big startup, the time has come to look beyond Silicon Valley!Read more
The mobile market opportunity is massive: more than 100 million people in Brazil are already online today, and there are nearly another 100 million more to go.Read more
A recent report noted that 39 percent of all mobile users in the U.S. had made a mobile payment in 2015. This is up from 14 percent in 2014 and by my estimations will in the 70 percent range by 2017.Read more
Brazil, which has seen incredible economic growth in the last decade, is a bit of a mobile contradiction—and that’s a huge opportunity for Google. On one hand, more people than ever have smartphones. On the other hand, Brazilians and Latin Americans aren’t culturally accustomed to making credit card purchases—especially on mobile devices. This means there’s a huge financial opportunity for Google to power mobile payments in the country and give users an easy way to pay for both virtual and physical goods on their smartphones. By making carrier billing a reality in Latin America, Google could bring mobile content to millions of new users and help advance the smartphone revolution—all while cashing in big time.Read more
Android’s openness has been a boon for device manufacturers as well as app developers and distributors all over the globe. The freedom to build easily and quickly for Android, primarily for low-cost smartphones, has allowed the platform to grow exponentially in regions like Asia. In China, Android devices made up 70 percent of all smart devices by late 2012, and Android is expected to continue growing over iOS in the region. It’s common for independent players to build their own app stores, where they have control over approvals and can implement their own monetization strategies, including carrier billing. For example, 91 Wireless is one of China’s biggest third-party distribution platforms, with over 10 billion apps downloaded to date. This isn’t necessarily the case in Brazil, where mobile payments aren’t as widely accepted yet.
The key for independent platforms to gain—and monetize—users is usually to implement some sort of carrier billing. Independent carrier billing lets developers distribute their apps efficiently and en masse through users’ phone plans of choice. Then, rather than paying for in-app purchases or services on a case-by-case basis, users can be charged all at once through their telecom providers, along with their regular phone bills. These partnerships between app distribution platforms and telecom carriers mean that apps can come pre-packaged on phones, therefore reaching more users in the first place.
More than a year ago, Google announced plans to bring Google Play and a variety of digital content, primarily books and music, to Brazil — and make carrier billing a widespread way for Brazilian mobile users to access this new content. Even though Google has rolled out carrier billing in a number of other foreign markets like Australia, Germany, Japan, Spain and the UK, it still hasn’t made the jump into Brazil or any part of Latin America. Right now, the majority of mobile users in Brazil — 79 percent –choose prepaid phone plans. While partnering with Google for carrier billing could initially cause a decrease in margins for carriers since mobile payments is still a growing area, I believe it would ultimately lead to a huge increase in the number of new transactions, and therefore boost overall revenue for the mobile market.
According to a recent study by Juniper Research, allowing carrier billing tends to lead to not only more transactions, but purchases of higher values as well. Implementing carrier billing also lets app stores reach a more diverse mobile audience, like those users that don’t have credit cards, by letting them choose a payment method they’re comfortable with. According to the Brazilian Association of Credit Card Companies, fewer than 50 percent of the 193 million Brazilians have a credit card. In sharp contrast, Brazil has 265 million mobile lines.
In addition to Brazil, this factor is also highly relevant to other Latin American countries. The credit card market is growing in the region, but not as rapidly as smartphone adoption. Even those who do have credit cards typically won’t use them to make virtual purchases — they’re just not culturally accustomed to that method of making payments, since the region was feature phone-only not too long ago. We’ve noticed this trend in Movile’s own users as well. We partner with and distribute games for over 50 game developers that all offer carrier billing as a payment method for purchasing virtual goods. Our largest game developer partner has seen that over 65 percent of transactions are made via carrier billing through our telecom partners, while 35 percent come from a variety of other payment methods. This is a pretty accurate depiction of the overall preferences in the region.
Not only are there more affordable smartphones entering the market in Latin America, but mobile Internet access is also going down in cost and becoming accessible in more and more locations that were once considered too remote. According to a recent GSMA study, the most affordable mobile data plans for smartphones in Latin America have dropped a staggering 52 percent in monthly costs over the last three years. And for many in the region, mobile devices are the first exposure they’ll have to the Internet at all, as computers have long been too expensive. The study predicts that this greater affordability will allow the 149 million people in Latin America’s lowest income bracket to access the mobile web for the first time.
Carrier billing is truly the best chance of reaching this expanding mobile user base and its newfound purchasing power. Apple has neither the open platform to allow for widespread carrier billing, nor the reach of thousands of different Android devices being built by independent manufacturers. Google has this unique opportunity to partner with carriers and offer millions of users mobile content via carrier billing, as low-end Android devices that support prepackaged content become the smartphones of choice throughout Latin America.
Eduardo Henrique is a co-founder of Movile, and currently leads the company’s U.S. operations.Close