Roger Fingas
Apple is now reportedly offering carrier billing as a way of paying for iTunes purchases, beginning with the German branch of wireless carrier O2.
Some O2 subscribers can now enter their phone number into Mac, iOS, or Windows iTunes payment information instead of a credit or debit card, TechCrunch noted on Tuesday. Subsequent payments for services like Apple Music, the iTunes Store, or the App Store will be added to a prepaid or contract phone bill.
In a statement, O2 owner Telefonica confirmed that the option is "gradually" being rolled out to subscribers, and should be available to all German O2 customers by the start of November.
Sources told TechCrunch that Apple was recently talking with a company called Bango about carrier billing services. Bango has reportedly partnered with every other major app store except for Apple's, and collaborated with Telefonica for years.
When Apple first launched the iPhone, it deliberately turned away from carrier billing, which was an industry standard at the time. That allowed the company to keep more control, including a larger share of revenue.
Implementing the option could make Apple's online services more appealing in countries where cash payments are more common, Germany among them. There's no indication of where iTunes carrier billing might come next, though Telefonica has some 340 million subscribers spread across markets such as Spain, the U.K., and Brazil.
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5 Comments
Thanks for being the only article which understands that Germans are unusually adverse to card payments.
This a potentially huge revenue stream for carriers. Roughly 30B from the App Store, and more from Apple Music. Assuming 1% process fees ( some countries higher, some lower ), that is at least 300M spread for all carriers. It would be Visa and MasterCard losing out, Apple doesn't really lose anything here. Although I do hope Apple have their own Carrier billing system in place rather then relying on "Bango" third party.
What I'd like to see is an option to remove my card from the iTunes Store/App Store/iBookstore altogether so I can instead use the more secure Apple Pay when making a purchase. If that means a purchase on a Mac means I need to make the payment via my iPhone, so be it, that would effectively be a two-step authentication… but I'd rather see Macs get the NFC Secure Element soon.
What I'd like to see is an option to remove my card from the iTunes Store/App Store/iBookstore altogether so I can instead use the more secure Apple Pay when making a purchase. If that means a purchase on a Mac means I need to make the payment via my iPhone, so be it, that would effectively be a two-step authentication… but I'd rather see Macs get the NFC Secure Element soon.
Definitely agree with this. I would much rather use Apple Pay, when it's released in Canada, to pay for Store purchases. I'm not really a fan of having to use my credit card for all online Apple Store purchases. Integrating Apple Pay into their own systems seems like the logical next move.
This a potentially huge revenue stream for carriers. Roughly 30B from the App Store, and more from Apple Music. Assuming 1% process fees ( some countries higher, some lower ), that is at least 300M spread for all carriers.
Disagree. US carriers already tried this, failed miserably and lost interest. First, they allowed billing for all of those shady SMS joke services and it became a major customer and legal issue. They were horrible at handling customer complaints about this kind of fraud, blaming the customer. Unlike a credit card where there's legal protections, you're mostly on your own here.
Then don't know how to handle credit. Cell phone lines are given to anybody who doesn't have poor credit. The regulated late fees (something around 3%) on a cell phone bill fail to represent the risk of purchase credit which needs to be at least 10%, and they can't raise them in many cases because they aren't a bank. Finally, the valuable customer, one with money, already has a credit card and doesn't want to bother with this stuff.
Carrier billing only makes sense in developing nations, which have no financial infrastructure other than prepaid cell phones, and Germany, where people are unusually card adverse.
What I'd like to see is an option to remove my card from the iTunes Store/App Store/iBookstore altogether so I can instead use the more secure Apple Pay when making a purchase.
Won't work. Apple has to store your credit card info because they aggregate purchases. They also keep it around for recurring billing, like iCloud and Music. No security gain.