Social games have become increasingly popular online as the user demographic has expanded and social networks like Facebook have added built-in gaming options. Virtual goods with real price tags are a key component of these games, a market that Think Equity forecasts to double to $1 billion in revenues next year. Mobile payments vendor Obopay today announced a mobile payments platform to help merchants cash in on this gaming movement, allowing users to make seamless in-game purchases.
Using an existing credit or debit card and mobile phone number, the Obopay service lets users link the two together and automatically pay for virtual goods rendered in the game. Instead of logging in with their credit card, players use their mobile number and a set PIN, all without navigating away from the page – the point at which merchants typically lose that customer. Michael Ting, senior director at Obopay, said the service provides better revenue opportunities than carrier billing alternatives that require merchants to give up part of their revenue to the payment provider.
“Oftentimes the carrier plus the service provider will take up to 50% of the transaction amount as a fee, whereas what we are doing is a much more economic way for merchants to accept payments, since we’re not using carrier networks to interact with the user,” Ting said.
Obopay also works with network operators, including AT&T and Verizon Wireless for other mobile payment services, as well as counts Nokia as a large financial backer. The vendor is focusing a good portion of its efforts on the developing market where peer-to-peer payments and money transfers are a lucrative market amongst the unbanked. “It is a very big opportunity in the emerging markets, which is why Nokia is a critical partner to us,” Ting said. “In the US, there are a number of payment options, but we do think mobile payments are close to a tipping point.”