This is the first in a series of posts describing what I see as the primary issues affecting the current user experience. As a mobile application developer I see the same problems appear again and again. I anticipate MEX will cover many new ideas for hardware, software products and services. It’s easy to get wrapped up in ideas and forget some fundamental issues. This short series of articles identifies some of the fundamental problems these new ideas should be trying to solve rather than ignore or even make worse.
Currently the main way of paying for 3rd party services is via Premium SMS. Typically the developer gets about 60% and the network operator keeps up to 40%. The payment, and that for any of the network operators’ own information services, ends up on the customer’s bill. While this is convenient, the 40% operator loading makes many of the products and services I have been involved with too expensive to be accepted by the end users. Many companies say, "Well, they will pay more because it’s via mobile". Unfortunately, most end users don’t see it that way. If it’s harder to do something on the phone and it costs more, they just won’t bother.
Those companies who go down the premium SMS route find it’s difficult, time-consuming and costly to set up this kind of payment across many countries as it involves agreements, setup and monthly payments, with many international network operators. The solution is usually to involve an intermediary who has already done this such as Sharewire, Clickatell or Ericsson IPX. However, this obviously incurs a further loss of revenue that is inevitably added onto the overall cost to the end-user.
Some other companies realise they can’t work with the high operator margins and go for a pre-pay, post-pay or pre-registration via some other system, usually online via web or WAP. Unfortunately this puts too many barriers in the way of the user and they are dissuaded from using the product or service.
Network operators are not encouraging outside payment services, preferring service providers to use existing network operator billing or premium SMS both for which they get a large revenue share. Network operators rarely encourage or cooperate with new 3rd party payment systems. Simpay failed. Mobipay, the Mobile Electronic Transactions (formed by Ericsson, NEC, Nokia, Panasonic, Siemens and Sony Ericsson) and MobeyForum (formed by some major banks) have, to date, been largely ineffective.
At the last Symbian Expo there was an enlightening presentation by Kieran Sheedy of CAP Gemini entitled "Value Innovation in the Mobile Marketplace: A Capgemini/INSEAD Study of How Mobile Operators and Mobile Customers Views on Value Compare … and what that Means for the Industry". The report describes how mobile operators are trying to secure their future in terms of advanced mobile services while all users really want is simpler services, transparent billing and improved coverage. Ignoring simpler services and improved network services for a moment, transparent billing is something most end users see as very important. Today, most users don’t know how much a MMS will be, how much the last data call came to or how much they will be charged if they roam abroad. These are basic services network operators should be providing before delving into complex added-value services. Those of us providing the complex added-value services should also be providing transparent pricing.
In summary, I believe existing and new solutions should…
Be affordable compared to non-mobile alternatives
Have transparent pricing
Easily allow providers to accept payments
Easily allow end users to pay
Think about mobile services and solutions that you know have been successful. If you can’t think of anything, simple ones are text messaging and downloadable ringtones. They pass the above criteria.
In my experience, even the most innovative products and solutions are likely to fail if they fall foul one or more any of the above criteria. Why? Why isn’t this also so in the non-mobile world? Well, using a product or service while mobile will always be harder than if it were done, for example, at home on a PC. Any inefficiency or ambiguity with payment, together with the added difficulty in using the product or service is enough to lose the customer.
This brings me to the ‘difficulty’ in using many products and services, that will be discussed in ‘Part 2: Simplicity’ of this series of articles.
This post was written by Simon Judge, Freelance Mobile Developer.