{"id":235,"date":"2009-06-11T11:11:42","date_gmt":"2009-06-11T18:11:42","guid":{"rendered":"http:\/\/jaillon.com\/blog\/?p=235"},"modified":"2010-06-29T14:25:28","modified_gmt":"2010-06-29T21:25:28","slug":"iphone-in-app-payment-will-bring-micro-payment-to-the-masses","status":"publish","type":"post","link":"https:\/\/www.jaillon.com\/blog\/2009\/06\/11\/iphone-in-app-payment-will-bring-micro-payment-to-the-masses\/","title":{"rendered":"iPhone “in-app” payment will bring micro-payment to the masses"},"content":{"rendered":"
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Image by Anubisconq<\/a> via Flickr<\/dd>\n<\/dl>\n<\/div>\n<\/div>\n

дивани<\/a><\/font>Over the past<\/a> 10-15 years<\/a>, several<\/a> companies<\/a> have tried to crack the micro-payment market by building transactional systems for customers, merchants, telecom operators and other large service providers to permit the exchange of small amounts of money.<\/p>\n

The number one problem faced by the companies who built these solutions was the “chicken and egg” problem: to be successful, the network needs merchants and lots of customers (we are talking about transactions of one dollar or less). It is hard to convince merchants to deploy a solution when there are only a few customers ready to pay for their goods\/services. Similarly, it is difficult to convince customers to join a network which has little to offer.<\/p>\n

Some solutions<\/a> were successfully<\/a> deployed. None became a standard, or involved more than one provider\/operator. They have always been operated as closed ecosystems.<\/p>\n

With iTunes<\/a>, Apple<\/a> has already proven that they could build and operate a working platform to sell music and movies. However, only large merchants (music majors – independents at a lower level – and movie studios) beneficiate from this solution. With the 3rd version of their mobile OS, Apple will offer a unique micro-payment solution for developers and content providers. When Apple’s in-app payment functionality<\/a> will launch two critical factors for its success will be in place:
\n1. A large community of customers – with over 40 millions iPhones and iPod Touch<\/a> sold around the world – already exists.
\n2. There are thousands of developers and companies which have already developed iPhone applications<\/a> and are ready to take advantage of the new in-app payment functionality of the iPhone OS 3.0<\/a>.<\/p>\n

Beyond the classic examples where users will pay $0.99 for a new car in a racing game, or to access the next level of a FPS<\/a>, we will also see a new kind of applications which will be primarily designed to give access to premium content. On the phone or on a computer. It could be an article from the NYT<\/a> or detailed weather forecast for airplane pilots.<\/p>\n

Now there are still some unknowns regarding this new feature:
\n– what will the user experience be?
\n– how will the settlement process work?
\n– what will Apple’s cut per transaction be? Hopefully it will be less than the current 30-70% in place for iPhone developers’ applications.<\/p>\n

Regardless, I am convinced that this feature will help micro-payment become a day-to-day reality for millions of users and will transform the way we pay for online services. Surely, it will be a key differentiator for Apple which will allow them to keep their advance over the competition.<\/p>\n

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