There is a familiar ritual at Boku that takes place before the start of every month. The network operations center in Mumbai begins coordinating with technical staff in the US and Europe to run through its checklist: System response times? Good. Transaction error rates? Good. Hardware utilization? Good. This routine continues until every major component across Boku’s primary and secondary data centre is confirmed to be in good shape. While nobody expects a failover to happen, the second site is there just in case it did and if there was ever a time to be extra cautious, this would be it: the first 24 hours of a new month, immediately after the clock strikes midnight… in Japan.
Meanwhile 7,000km away, Hiroshi is at home playing Monster Strike on his iPhone. Whilst it is past his usual bedtime, Hiroshi like so many other Japanese gamers has chosen to stay up late because come midnight, mobile games like Monster Strike will be releasing several highly-coveted characters, weapons, and armors to the public – sometimes at a discount but almost always with limited availability. And as soon as those special items are released, a tidal wave of payment requests come flooding in fast and furious. What does that look like? On the first day of the month, Japan alone will push through 10 times the number of payments than the rest of the world combined and more than half of these payments will be initiated within the first 15 minutes.
It’s not unusual to expect payment volumes to spike on famous shopping days like Black Friday and Cyber Monday in the US or Chinese New Year and Singles Day in China, but few know or understand why Japanese game publishers choose the start of every month to sell or promote their best in-game items. The answer has to do with carrier billing. Japanese mobile operators restart their billing cycle at the start of each month giving each of their subscribers a fresh new bill to load mobile charges onto. Given the intense competition for game revenues, publishers will try and entice as many gamers to use their new credit line to buy items from their game and not someone else’s game.
The origin of this phenomenon dates back to 1998 when NTT Docomo first introduced internet access for their mobile phones. With mobile internet access came early forms of premium content such as ringtones, wallpapers, and mobile games all of which were exclusively purchased using carrier billing. But demand for mobile games in Japan was unlike anywhere else in the world. Game publishers like GREE and DeNA earned staggering amounts of money selling game content on Japanese mobile phones – nearly all of it, charged to the consumers’ phone bill. But because mobile operators limited the amount of charges that can placed on a subscriber’s monthly phone bill, competition to sell as much premium content as possible before consumers hit their monthly limit became fierce. This gave birth to the midnight promotions.
Today, these midnight promotions continue to prevail but have moved well beyond the old WAP (Wireless Application Protocol) games played on feature phones and are now aimed at the latest mobile games played on smartphones. This is where carrier billing remains a popular payment option on both iOS AppStore and Google Play, especially in Japan where credit card penetration is stuck at 16% and PayPal remains largely absent. With growth showing no signs of slowing, Boku is committed to keeping its platform well ahead of demand, investing in more network bandwidth, faster database performance, and better application efficiency. Recent load tests show Boku’s platform processing in excess of 600 transactions per second without any noticeable degradation of performance and while this may appear sufficient today, the team has already begun work on doubling that performance. After all, if more scale leads to lower costs and lower costs lead to more volume, it is an investment that will ultimately pay off for carriers, merchants, and consumers alike.
Fortnite Battle Royale, published by Epic Games, was just recently released for iOS to great fanfare; it was previously only available on PC and console. The release has been a tremendous hit with more than 40 million users across all platforms and mobile revenue surpassing $15 million in the first three weeks. Fornite Battle Royale is outperforming other leading titles like Candy Crush Saga, Clash of Clans and Pokemon Go. This remarkable success has led to a noticeable increase in Boku’s carrier billing volume from Xbox, PS4, and iOS.
While there have been plenty of hit freemium games on mobile, they are rare on console. The console gaming industry has historically been fueled by the sale of physical discs through retail stores and, more recently, a growing number of full-priced downloads. Yet this shift to digital downloads has been slow due to the frequent discounting by physical retailers and the popularity of buying and selling used discs.
But what happens when console games can be downloaded for free? Discs pass into oblivion. Fortnite Battle Royale can be downloaded to your PlayStation and Xbox for free which means the only people buying the physical discs are those with slow Internet connections. So, while the focus has mostly been on Fortnite Battle Royale’s expansion from console to mobile, perhaps the more interesting observation is the expansion of the freemium model from mobile to console.
Boku’s data reveals that this transition has been picking up speed. Overall carrier billing volume on console is steadily increasing as gamers shift their spending (for digital downloads, in-game purchases, and live services) from offline to online. In fact, every time Electronic Arts (which reportedly earned $1.68 billion from in-game purchases last year) releases the latest version of the ever popular FIFA game, Boku sees a predictable spike in carrier billed payment volume from both Xbox and PlayStation.
Fortnite Battle Royale may finally signal the beginning of the end of the physical game disc. If that is the case, the ease with which gamers can make in-game purchases and pay for subscriptions will be critical to the growth of console gaming revenues. The good news is that mobile gaming has already shown how access to simple, ubiquitous payment methods like carrier billing is achievable and critical to success.
In response to this trend, Boku is expanding carrier billing availability on console to more markets while improving in-game purchasing experiences and refining subscription capabilities. That means:
making it easier to securely charge your mobile account from your game controller for a better user experience
handling a wider variety of subscription pricing schemes to improve user acquisition
implementing smarter rebilling and billing recovery features to reduce churn
In the meantime, whether you have a PC, PlayStation, Xbox, or an iOS device, try downloading Fortnite Battle Royale. It’s free!
Today Boku has extended their agreement with Microsoft to bring carrier billing to all Windows 10 devices on Orange France, including Windows Phones, Surface tablets, PC’s and laptops. As part of the expanded integration with Boku, Windows 10 customers on Orange France will be able to use their mobile phone number to save their mobile account as their preferred payment method when making any purchase in the Windows Store.
This is the first time carrier billing will be offered as a payment option for the Windows Store in France and will be available across a full range of devices including Windows Phones, Surface Tablets and any PC or laptop running Windows 10.
France is one of the top global markets for Windows 10 adoption, which currently has over 400 Million downloads globally. Orange boasts over 29 Million subscribers, nearly 40% marketshare, in France.
Today Boku is announcing the expansion of carrier billing for Spotify music lovers in Switzerland via Swisscom. This partnership will help 6.5 Million Swisscom Subscribers to access carrier billing as a payment option for Spotify Premium, creating recurring payments quickly and easily using only their mobile number.
Today, Boku announced a significant expansion of our relationship with Microsoft in two key European markets, the UK and Italy, adding carrier billing as a payment option for Windows Store purchases made on Windows 10 devices.
Now, O2 subscribers in the UK and Wind subscribers in Italy can purchase apps, software, movies, music, games and more on any Windows 10 device including mobile phones, tablets, PCs, and laptops using only their phone number.
This expansion comes quick on the heels of our deal with Microsoft in other key developed markets – the US, Germany and Switzerland – proof that carrier billing is the alternative payment of choice in developed and emerging markets alike.
The new Windows Store is available in 242 markets worldwide, and this is the first time carrier billing will be offered as a payment option for Windows 10 devices in the UK and Italy. Windows 10 is also seeing steady growth globally, having already been installed on more than 350 million devices.
Today Boku is announcing the expansion of carrier billing for streaming music lovers with key carrier partnerships in Germany. Now every major carrier in Germany is allowing their subscribers to gain access to Spotify Premium and set up recurring payments using only their mobile number. With this deal, Spotify now offers customers in Germany a carrier billing option for digital their music purchases.
Today Boku is announcing the expansion of carrier billing for streaming music lovers with key carrier partnership in Ireland. Starting 1st July 2016, Boku’s new partnership with Three will enable the subscribers to gain access to one of Ireland’s most popular streaming music services: Deezer. In addition to having the option of making Deezer purchases using only their mobile phone number, Three customers in Ireland can subscribe for a free trial of Deezer Premium Plus.
As some of you may have seen, this morning DaoPay announced its acquisition of our landline-based “pay by call” service (formerly mopay Call – created by mopay, acquired by Boku in 2014). This agreement allows Boku to transition our landline offering to a trusted partner while we continue to expand our industry-leading mobile carrier billing service.
By working with DaoPay, we have ensured that our merchants’ technical migration is a simple, frictionless reconfiguration. The DaoPay API also brings with it a number of advantages above and beyond our current landline offering including:
Fully flexible tariffs in most countries
Advanced reporting and analysis
Patented dial-through logic (no PIN announcement)
Online overview of past invoices and payment status
Consumer loyalty programme
To read the full announcement press release, go here. If you have any questions for Boku, please feel free to reach out to [email protected]
Today, Boku announced a new direct carrier billing partnership with 3 Hong Kong, one of Hong Kong’s leading mobile carriers and part of the 3 global network which provides mobile services to customers across Australia, Austria, Denmark, Macau, Indonesia, Ireland, Italy, Sweden, and the United Kingdom.
This new partnership continues Boku’s rapid expansion in Asia, which has included the opening of new offices in Asia over the past year to serve our growing list of merchant and carrier partners throughout the region. Hong Kong is a particularly attractive market for carrier billing, according to recent Nielsen research. As of early 2014, smartphone penetration in Hong Kong stood at over 87%, with more than 31% of the population owning more than one phone, and 28% of all mobile users participating in some form of m-commerce in the previous month.
Through the new partnership with Boku, 3 Hong Kong subscribers will be able to make purchases on their mobile devices using their mobile phone numbers. At checkout, users choose an item they want to purchase, enter their mobile numbers, and confirm the purchase via text. Their items are then billed to their mobile accounts.
This new partnership with 3 Hong Kong opens millions of new mobile consumers to our industry-leading roster of premium global merchant partners, including Facebook, Sony, Spotify, Electronic Arts, Valve, Wargaming, and many more.
When we announced that Boku’s new e-Money initiative in Europe, we received a flood of inbound questions. What does this license mean for Boku? For the mobile payments industry? What new doors does the license open? How can merchants leverage e-Money?
To answer all of those questions and more, we sat down with James Patmore, Managing Director of EMEA for Boku, to create a video series speaking directly to the questions from merchants and carriers alike. We’ve included the first of these videos below.
James covers a number of topics, some of which are outlined below.
Bringing direct operator billing to physical goods
Some challenges with financial regulations
Benefits of operators outsourcing e-Money related challenges