BY JONAH NWOKPOKU
Africa’s payment card, Verve has said that it has developed a solution that will help mobile application developers to monetize their products and services without going through the telecommunication companies.
This solution called Verve Payment Wallet is designed to be integrated into mobile apps at conception stage and will provide a payment gateway through which app users and subscribers can pay using the money in their bank accounts.
Verve said it is partnering with global phone maker, Nokia and software maker, Microsoft to introduce this solution on apps on windows phones. At the moment about seventeen mobile applications which have been selected for Alpha DevCon, an app contest, are already available on windows phones, using this payment gateway.
It could be recalled that mobile app developers have been having difficulties placing premium on their apps because the telcos who provided the only option for a payment gateway gave stringent conditions which made their craft an unprofitable venture at the end of the day.
For instance, some of the telecommunication companies insisted on taking 60 percent of the app’s revenue leaving 40 percent to be shared between app store owners and the app developers.
To even enter into any such partnership with the telcos required that the app developer obtain a Value Added Service licence which costs up to N500, 000. This is far beyond the reach of most of the developers, many of whom are just startups.
But will this Verve Payment Wallet, which is obviously the first of its kind in the mobile app ecosystem in Africa as far as payment is concerned, save developers the trouble of going through mobile network billing system and thus make the App economy (apponomy) begin to contribute its rightful quota to Nigeria’s gross domestic product?
Verve’s Osiriame Momodu who spoke to Financial Vanguard about the solution said the Verve Payment Wallet ideally solves the payment problem for app developers.
He said since the solution will enable them to integrate an effective payment system into their apps, that is all they need to scale their monetization hurdle.
He said, “This has become imperative since the contribution that mobile application can make to the economy is enormous. The potential is huge. It is driving the economies of some developed countries. At the moment, it is also growing here based on just downloads. But with this solution for monetization, it is capable of making Nigeria a leader in African mobile apponomy.”
He explained that, “The mobile network operators which have credit billing system would have been a good option for app developers to monetize their services but because of the 60/40 percent sharing formula; the developers are not keen on exploring that option.
But this billing system does not need them to integrate with any telecommunication network operator.
However from inception, the app developer needs to integrate its payment system with this Verve Payment Wallet and any user of verve card can easily make payment for whatever services the app is meant to facilitate.
And the charges are not as high as that of the telecommunication companies. It is just 2.5 percent compared to 60 percent charged by the telecoms companies.”
This maybe the beginning of a defining moment for the mobile app landscape in Nigeria, nay Africa because of the economic motivation that venturing into mobile app development can bring.
The implication is that this could result in a boom in mobile application ecosystem that will move the apponomy from the current paltry $4bn it is capable of generating at the moment to at least $20 billion in the next five years.
However challenges remain, despite some level of succor this may bring to app developers, the solution’s reach beyond the formal sector is very limited since only the banked customers can benefit at the moment, excluding the huge potential of the unbanked population, who also have access to mobile phones.
Also, the fact that the payment solution is still restricted to Verve excluding the vibrant market of the MasterCard and Visa also constitutes a shortcoming.
More so, it is will be worthy of note that the availability of the benefitting apps in other mobile Operating Systems like Android and IOS and efforts to address some of the aforementioned challenges will also expand the market and broaden access and profitability for the industry.