Sunday, February 21, 2010

This May Explain RIM’s Difficulties With App World Carrier Billing…

zebbo-price-list Zebbo let us know that they have managed to hammer out deals with the main carriers in the US, Canada, & UK along with many other international countries for carrier billing. Carrier billing means that when you pay for an app it will automatically be deducted from your monthly bill. RIM has been mentioning before DevCon that they plan to add carrier billing to the BlackBerry App World as an alternative to PayPal.

I headed over to Zebbo’s website to get an idea of the commissions carriers and Zebbo would take out of a carrier billing deal and it really blew my mind. I had heard before that carriers charged about 60-70% of the sale while they were slowly going down to more reasonable commission levels.

From Zebbo’s price list it looks like carriers are charging anywhere from 35-45% of the retail price per transaction. For example, on a $1.99 sale Zebbo is charging $0.91 commission. Right now RIM only takes 20% of the sale price to cover fees and incidentals but there is no way it would be able to cover carrier billing.

I never understood the draw of carrier billing but it might be another way for developers to convert free users into customers.

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