December 23, 2010 at 10:32 am

App Developers, Teens Rejoice: Android Marketplace Takes Phone Bill Payments

Google announced on Thursday that its Android Marketplace, where app developers sell and offer free apps to users of Android smartphones, will now accept payment by charging a customer’s AT&T or T-Mobile phone bill, in addition to allowing them to pay with credit cards.

It was already easy enough to buy mobile apps using a credit card before this development, but as Google mentions, charging phone bills is potentially a more “frictionless” way to let people purchase mobile applications for their phones.

“We strongly believe carrier billing is a great way to make it easy for users to purchase and pay for applications,” wrote Google head of the Open Handset Alliance Eric Chu. “In addition to the availability of AT&T and T-Mobile U.S. carrier billing, we’ll continue to partner with more carriers to offer carrier billing options for their subscribers.”

In the case of kids, teens, and other people who tend not to have credit cards, the ability to charge apps to one’s phone bill represents a significant opportunity for purchasing music and music apps on an Android phone where none existed before. The same potentially applies to workers whose companies pick up their mobile tabs.

The effect of this will be to increase Android app sales to at least some extent, purely by giving customers another payment option, which is good news for anyone who is trying to sell music, apps, subscriptions, and so on to Android users. Nokia’s Ovi app store, while it lags considerably due to a variety of factors, has seem a degree of success to date, which some credit to its ability to charge users’ phone bills; now, Google will be able to do the same.

For the mobile carriers, this also represents a win, because whoever owns the payment relationship with a customer is in the perfect position to sell them more stuff — data plan upgrades, laptop tethering, and the like. Google’s decision to allow carriers to maintain that payment relationship with the customer, while Apple’s iTunes app store accepts payment through iTunes only, makes Android a slightly more attractive platform from a carrier perspective, which should lead to more Android phones in consumers’ hands.

That said, Android has a ways to go, app-wise. Even as its platform has dethroned the Apple iPhone in terms of overall market penetration, Apple users still download far more apps than Android users do, and get to choose from a much larger selection.

(via intomobile)