Founded and headquartered in Tartu, Estonia, mobile payment solution provider Fortumo now also has offices in the U.S., U.K and China. Established half a year ago, Fortumo’s Beijing office, with four staff, has made deals with China Mobile and China Unicom on in-app billing, and is about to reach similar partnership with China Telecom.
It’s not easy dealing with the three state-owned Chinese telcos. One of the reasons that they’d get on board with Fortumo, apart from the payments technologies, is the latter can bring them content to profit off, according to Gewben Wu, head of Fortumo Asia.
Fortumo partners with more than 300 carriers around the world on in-app payments. After you click on a Buy button for a virtual item in an app, Fortumo would identify the SIM card in your mobile device and charge it with carrier billing. If it is a connected device with no SIM card in, you will be asked to type in your mobile phone number and confirm by replying a text message sent to your phone.
As over 300 out of 500 telcos around the world are Fortumo’s partners, the convenience it brings app developers, especially small teams or individuals, is they don’t need to work on adapting to payment standards in different markets. Fortumo works everywhere as users pay carriers regularly in almost every country or region.
Fortumo also operates an app store that would bring apps to countries where the company has presence.
Chinese telcos saw increasing decline in text messages and calling revenues, thanks to the ubiquity of mobile communication apps such as WeChat — you may recall that China Mobile held a grudge against WeChat and wanted to charge it in some way, while data plan revenues can hardly compensate for the losses at the moment. Fortumo offers the three telcos’ app markets content from its partners so that the three can take revenue shares through in-app paid items. Typically the three take 30% to 50% of the sales. Fortumo, Mr. Wu disclosed, takes a mid-single-digit percentage.
Reaching deals with telecom operators is necessary for Fortumo to do business in China. But the real business opportunities lie in introducing apps from other countries to China and exporting the Chinese ones.
For developers outside China, there are variety of difficulties in taking payments from Chinese users; for instance, only a small number of Chinese users own credit cards; Google Wallet isn’t available in China for purchasing Android apps or in-app items. There isn’t a ubiquitous one-click payment solution in China.
A majority of payments made for online games in China, according to Wu, are through carrier billing. Fortumo could be the easiest way for Android apps from other countries or regions to receive payments. Fortumo also partners with local Android app stores or other app platforms, such as 360 Appstore, 91 and Wandoujia to help outsiders reach local audiences. Rovio, the mobile game developers of Angry Birds is a typical case Fortumo would show you how they’d help a successful app collect money in China.
It’s in the same way that Chinese developers can take advantage of Fortumo for expanding to other markets. Chinese game development companies, such as CocoaChina (Chukong in Chinese), Gamewave and Boyaa, are supported by Fortumo to have a presence and take payments outside China. Mr. Wu introduced that those Chinese games perform well in Southeast Asia and South-American countries like Brazil.
Besides Android apps, Fortumo is exploring business opportunities elsewhere in the mobile Internet market. It is working with Chinese mobile phone manufacturers such as Huawei, GiNOEE, ZTE to pre-install apps in their smartphones and, hopefully, share revenues from virtual sales. With Fortumo, it doesn’t matter where phones produced by them will ship to.
Mr. Wu thinks one great thing with Fortumo is, to every category of players in the mobile Internet market, it’s not a competitor but a partner that can help them reach more audiences and receive payments with no need to do anything else. But he doesn’t see people purchase goods for large amounts of money with carrier billing like they do online shopping on Taobao or other e-commerce sites. He thinks that’s why most small games adopt Fortumo to receive payments as seldom virtual item is for big money.
But who knows? If Fortumo could work out with almost all carriers around the world, why cannot anyone work with as many online banks as possible around the world to ease payments problems in online/mobile shopping? Or it would be Fortumo itself to shift direction if carrier billing became a minor payment method.