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Zong calls for lower operator revenue shares


LIVE FROM GSMA MOBILE MONEY SUMMIT 2011: Mobile payment network enabler Zong today stressed the need for operators to reduce their revenue share from transactions if the m-commerce industry is to fulfil its potential of grabbing a significant portion of the US$500 billion e-commerce market.

Zong’s products enable remote mobile payments via direct operator billing. Competitive solutions to Zong’s offering include Android Market and Apple’s App Store, which both take a 30 percent share of transactional revenue. Meanwhile operator billing for premium SMS content has traditionally seen carriers take a 35 percent+ cut of revenue, while the sale of digital goods has seen operators take a 15-20 percent cut.

However, Zong’s Nick Macilveen, VP of carrier partnerships and industry relations, believes this share needs to reduce further. “At 5 percent, most merchants accept American Express for incremental revenue, and would do so for mobile payments,” he said. “With a few modifications to the existing mobile payment system, we can increase our addressable market tenfold to encompass mcommerce.” Macilveen stated that costs need to be comparable to credit cards (less than 5 percent): “Operator revenue shares need to be competitive with other payment methods to grow the market into new verticals.”

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