Why app developers, merchants and payments providers need to converge to grow and thrive

By Graham Jarvis, Lead Journalist – Business and Technology

From the outset the Covid-19 pandemic offered new digital and commercial opportunities to physical businesses to become e-commerce enterprises, to boost or maintain their sales during the world’s various lockdowns. Work from home orders required a dramatic and seismic shift in thinking, with many organisations achieving the ability to continue to operate through apps and e-commerce websites. Revenues for established big e-commerce brands, such as Amazon, also increased significantly.


Statista says the UK is one of the most advanced e-commerce markets in Europe. Before the crisis, the UK’s Office of National Statistics (ONS) reported the country’s e-commerce revenue equated to £693bn (USD


With Stay-At-Home and Work-from-Home orders, due to the various lockdowns, e-commerce accelerated in March 2020, as online shopping behaviours changed. Statista researcher, D. Tighe, found in his report, ‘Changes in online buying among UK consumers since COVID-19 2020-2021’ that 40% of shoppers said they had shopped more online, compared to before the pandemic. “By February 2021, however, this percentage had grown to approximately 75 percent. Similarly, offline shopping has decreased over the analysed period,” he writes.


In another report, his colleague, Stephanie Chevalier, in ‘Retail e-commerce sales worldwide from 2014 to


Opportunities for growth


Regardless of this, the growth in e-commerce creates new opportunities for app developers, merchants, and payments providers to use the growing amount of purchase data, garnered from payments. This data can be used to analyse user behaviour to uncover new opportunities to enable online ecosystems to thrive and grow. UK-based Bango (AIM: BGO), which offers unique purchase behaviour technology and is listed on The London Stock Exchange, says:


“By bringing businesses together and powering e-commerce with unique data-driven insights, it’s possible to deliver new business opportunities and new dimensions of growth for customers around the world. This means global merchants including Amazon, Google and Microsoft can work together with payment partners from Africa to the Americas, accelerating the growth of everyone.”


App developers are nevertheless governed by app stores, which Paul Larbey - CEO of Bango – says provide an integrated channel to consumers.. This integration, valuable though it is, comes at a high price though. App developers are often charged a 30% commission, and they do not directly control important aspects of their product offer, because the pricing, placement, payments methods and key data insights are controlled by the app store.


Out of app store billing


However, there is now increasing pressure for the out of app store billing. TechCrunch reveals in an article on 11th January 2022 that “the South Korean parliament passed the world’s first bill to prevent the global technology giants from forcing developers to use their in-app billing systems”, in late August 2021. In her own article for the magazine, ‘South Korea passes ‘Anti-Google law’ bill to curb Google, Apple in-app


payment commission’, Kate Park writes that the revised Telecommunication Business Act aims “to prohibit the global technology companies from wielding their dominance in the app payment market.”


She adds: “Google in March 2021 reduced its commission to 15% from an original 30% for all in-app purchases to appease app developers. But four months later, it announced that it will push back its new in-app billing system to March 2022.” Apple has followed suit by submitting compliance plans to allow developers to use third-party payment options in South Korea at a reduced fee. Apple and the Korea Communication Commission (KCC) are currently in talks about the service fee structures and the exact date of when the payment option will go into effect.


Meanwhile, the Epic Games lawsuit against Apple is adding more pressure too. This will determine whether and when out of app store billing is possible. For out of app store billing to become feasible, there will be a need for seamless payment integration with direct carrier billing (DCB) and with wallets that provide a one-click convenient payment method – relieving customers of the arduous task of having to re-enter personal and card payment details.


Existing outside of the app store means more autonomy. However, it also leaves the app developer navigating a fragmented payments market. Bango offers app developers a way to seamlessly integrate multiple payment methods in a way that allows them to retain control. Through Bango, app developers can choose which payment methods to integrate, make use of the transaction data in the Bango platform to better target their marketing and offer bespoke checkout experiences to their customers.


Larbey adds: “Market fragmentation keeps developers in the app stores, but the role Bango plays is to provide and meet the needs of the app developer in a form that gives the app developer more control, and as for merchants. Long term, app stores will continue to provide a valuable channel to consumers, alongside direct monetization using well established direct to consumer platforms like Bango.”


Payments complexity


Complexity comes from the many different payment providers and payment methods on the market such as credit cards, debit cards, BNPL, DCB, wallets, bundling, PayPal, etc. Regional differences exist too. Bango finds that there is heavier credit card adoption in the US and the UK, compared with Asia and Latin America. Yet in parts of Asia, cash is still the dominant payment method. Cash is no good though for online commerce. Direct carrier billing and wallets are therefore the way forward as illustrated by Amazon’s decision to add carrier billing across its entire retail and digital business in Japan. Given the deep penetration of mobile phones vs credit cards, these payment methods have the added advantage of giving e-commerce access to the unbanked portion of the population.


This wide array of payment methods and providers creates the need for multiple payment integrations. Done right, the payments data gathered from merchant and app developer transactions across payment methods can be used as a powerful targeted marketing tool. Bango does just that via its Bango Audiences. Just 5% of app users deliver 80% of app revenue and Bango Audiences enable merchants and app developers find this 5%. Better targeting means more paying customers, generating more payment insights via the Bango platform which gives more data and further improved targeting – the Bango virtuous circle.


Increasing activity


In a press release, dated 11th May 2021, Bango announced a new partnership with NTT, and Poon Khye Wei, Chief Operating Officer, NTT DATA Hong Kong said: “Our goal is to provide a comprehensive and extensive digital payment coverage for merchants across Asia and globally. By collaborating with Bango, we can offer their merchants an integrated solution of significant coverage of localised digital payments along with Bango platform specific features and solutions.”


Larbey explains why this partnership is significant: “We gain access to the wallet routes they have, helping us expand our footprint and coverage and grow our access to new customers. For NTT Data, they receive more activity because of access to the merchants in the Bango ecosystem, growing their end user spend. Additionally, their localised merchant customers then have access to the global consumer base plumbed into Bango.”


The benefits of an integrated rather than a fragmented ecosystem include giving merchants access to hundreds of payment routes across the globe via one connection. “This gives them access to hundreds of millions of users is one quick and easy integration and having to connect to each route individually would be time and capital intensive and makes some markets difficult to access,” he suggests.


Integration permits merchants to also gain a faster route to market by connecting to a platform that can use insights generated via, for example, Bango’s wholistic viewpoint to advise customers on ways they can grow and maximise their revenues. By bringing businesses together from the m-commerce and e-commerce ecosystem – including payments providers – Larbey says it’s possible to benefit from information from across the whole industry. The alternative is to have limited scope within one’s own market silo.


He explains: “We can see transaction data across many merchants and many payment providers. This means rather than one merchant only having access to insights based on their own transaction data, we can provide broad market insight across merchants, something they wouldn’t otherwise be able to obtain. These insights can be used to grow their customer numbers, generate increased customer spend, improve retention and customer return rates.”


Accelerate performance


The players within the Bango ecosystem will inevitably also be competitors. They include global merchants such as Amazon, Google and Microsoft who work together with payment partners from Europe, the US and from Africa to the Americas. By working together in co-opetition, they can accelerate the performance of everyone within the ecosystem.


Bango suggests the app developers, stores and payment providers who cross the threshold into the Bango ecosystem can converge, grow, and thrive. “In a fragmented payments landscape, Bango defragments and unifies the payments market, making it easier for merchants to offer their products and services to their customers everywhere,” Larbey argues.


App developers, merchants and payment providers need to converge to grow and thrive because over the next 5 years there will be more direct to consumer marketing, and this represents an increasingly vital opportunity for app developers. App stores will play a part in ongoing online sales growth. However, Bango also predicts that a fast-growing monetisation channel will develop, and it will go directly from app developers to consumers. App developers, merchants and payment providers may nevertheless need to still collaborate by converging to capture the growth opportunities that exist now and in the future.



Under pressure from big merchants and watchful regulators, the two mega app stores Apple and Google made concessions last year that gave merchants monetisation options outside of their stores. For example, in June 2020, the European Commission opened an anti-trust investigation to “assess whether Apple's rules for app developers on the distribution of apps via the App Store violate EU competition rules.”
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