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Safaricom to launch carrier billing in partnership with Fortumo

App purchase Fortumo

You can now buy apps and online digital content using your Safaricom credit. US-based mobile payments firm Fortumo announced the partnership that will allow 18 million Safaricom customers make in-app purchases. Mobile payment for digital content is one of the bottlenecks of e-commerce in Sub-Saharan Africa. Carrie billing will encourage entrepreneurs to venture into paid apps and content.

Gerri Kodres, Chief Business Officer of Fortumo, says digital content merchants struggle to generate revenue due to low credit card penetration.

“Emerging markets like Kenya have become the biggest drivers of smartphone growth globally as cheap smartphones are becoming available to millions of people in growing economies,” says Kodres.

The company is betting on the rapid growth of the smartphone market in the region to counter the limited use of credit cards. With slightly over 200,000 credit cards in circulation in Kenya, international online purchases has been low despite the growing demand for digital content.  Fortumo provides carrier billing services in 83 markets including South Africa and Nigeria.

In Nigeria, Fortumo says it has tweaked its product to allow mobile payments for feature phones to allow over 35 million customers make mobile payments.

“Sub-Saharan African is also expected to become interesting for global app stores like Google Play and Microsoft Store who (due to low amount of credit cards in the region) are likely to rely heavily on carrier billing,” says the company.

Mobile games developer, Wesley Kirinya, says a simpler and better way of selling content will help developers monetize their apps.

“The biggest hurdle we face, is charging smaller amounts like Sh20 for apps. The current method of using premium SMS discourages app developers,” says Kirinya of Leti Games.

According to Kirinya, premium SMS service providers and telcos take up to 80 percent of what developers charge, and take long to remit the sales to merchants.

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“Platforms such as Google Play and Apple store offer better terms for developers, and the reach is global,” Kirinya adds.

Microsoft partnered with Safaricom last year to provide Mobile Operator Billing which saw customers purchase Windows Phone apps directly using their phone credit.

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