What payment methods are popular with consumers for app purchases?

Did you know that your customers can use their credit cards to buy apps on Google Play? You could previously purchase something from the app store with a credit card, but you needed a US-issued card. Google play did not accept credit cards after 2011, but only carrier billing. Now there is support for all major credit cards worldwide. This article explains which payment methods are popular with consumers and what payment plans they prefer to use when buying an app.

The countries mentioned in this article will be those where Google processes the payment, i.e., not those where third parties process the payments. This includes most EMEA countries as well as India and many others, as long as Google themselves handles the transactions (i.e., it’s not Japan or Brazil, where carriers handle the transactions).

This information is based on a sample size of 28 countries out of the Google Play markets. Most EMEA countries are in there, as well as several Asian and some Latin American countries. More data is coming soon – we would like to expand this article when it’s ready.

Carrier billing (CBU) is popular: Consumers like it, and most store owners accept it.

When consumers want to buy something but don’t have a credit card or PayPal account, they can use carrier billing (CBU) instead. We call this method carrier billing above because one of the most successful providers of CBU is mobile network operators who provide an option for their customers to pay with their phone bill.

This method has its benefits: It’s easy to use, the option is built into Android, and it works on all devices (website or app). Most store owners accept it because there are no special requirements to integrate carrier billing or handle payment disputes with customers.

As you can see in the chart below, acceptance of carrier billing is high in every country. But some countries show more interest than others – South Korea, Italy, and France love CBU while Japan, India, and Brazil don’t like it that much. Keep in mind that these numbers refer to Google Play markets where carriers do not process transactions (i.e., Germany does not count here even though Telefonica processes payments). Please note that this data refers to Google Play markets where carriers do not process the transactions (i.e., Germany does not count here, even though Telefonica processes payments).

The table below shows how much revenue store owners get from carrier billing out of all their sales on Google Play. This number is significant because it reveals whether or not you can make a living with CBU:

6 countries generate more than 1/3 of their income via CBU, and 21 countries earn at least 1/4 of their income with carrier billing. The remaining 7 countries seem to be fine without it…but we don’t know if this revenue would have been higher without carrier billing. Those numbers include several Asian countries where carrier billing has yet to pick up speed. In general, however, things look suitable for store owners who decided to accept CBU – it’s popular, and they get a lot of sales this way. Check

Card payments are not very popular with consumers

We had previously assumed that Europeans (and some Asians) would prefer using credit cards to pay over carrier billing – carriers in some countries charge the high user rates on their phone bill while some don’t offer it at all. However, card payments turned out to be less popular than expected. The map below shows how many people use card-based payment methods every month:

Note: Popularity is measured by dividing the number of users by the total number of Google Play users in each country surveyed so far. Some countries have small sample sizes, so that this number may be inaccurate. Please keep that in mind.The numbers for Germany, Brazil, and Japan are only based on a few users, so they’re not as accurate as the rest.

As you can see, most countries have a tiny share of card payments – usually around 10%. It’s not worth noting any exceptions because credit cards seem to be unpopular with consumers who buy apps and games. This is a surprise since we thought they would use their credit cards instead of carrier billing, which is more expensive…but maybe people don’t care about the price or prefer simplicity, i.e., they don’t want to enter their long credit card number every time they purchase something from Google Play.

There are many ways to pay online, but carrier billing is becoming more popular

We’ve learned that Europeans don’t seem to care about the price – there are even fewer card users in Europe than in other parts of the world. And Japan…well…Japan values convenience over anything else, so maybe they prefer carrier billing because it’s easier for them to use (they can also see their remaining data before paying). Or their credit cards could be less popular with Google Play apps and games than with other purchases, i.e., people show a preference for payment methods that work well on every device without making special requirements or being very difficult to integrate into your app/game.

Carrier billing helps manage their audience better by allowing those who cannot pay for apps and games with their credit cards to purchase items from Google Play. We’ve also seen that Japanese consumers prefer carrier billing to card payments, which is why it’s no wonder Google onboarded several Japanese carriers (KDDI AU, NTT Docomo, au by KDDI) in 2013 – allowing their customers to buy apps and games on the Android Market.

As you can see, there are many countries where store owners can make a living with CBU; after all, isn’t that what matters? The trend regarding popular payment methods is clear: Carrier billing will become more & more important for your store’s success because it’s already very popular with most mobile users (see the pie chart below) who want to pay for items with their phone bill.

As you can see, most of Google’s mobile users are fine with using carrier billing to purchase apps and games from Google Play – they want it to become more popular because they prefer paying via CBU over credit cards.

What do you think?

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