One of the big pushes RIM has been trying to make for App World is alternative payment methods beyond PayPal. RIM just made a very painful step in that direction by changing the revenue split App World shares with developers. As of May 17, 2010 RIM will only be paying developers 70% of sales instead of the previous 80% of sales. That is the same revenue split as Apple gives iPhone developers but it sucks that developers need to take a hit in revenue. RIM claims they have to raise their cut to 30% so they can “Support the expansion into new markets and allow for additional billing models.”
I totally understand why RIM needs to introduce regular credit card payments but I have no idea why they are introducing carrier billing. The fees RIM pays for regular credit card payments would be about 1-4% and if you figure in fraud and the whole transaction support team maybe it would cost RIM 10% for regular credit card payments. On the other hand the company RIM is planning on using for carrier billing, Bango, has some HORRIBLE transaction rates for carrier billing. Let me give you some examples:
- AT&T takes 40% of the sale in fees
- T-Mobile takes 42.5% of the sale in fees
- Sprint takes 45% of the sale in fees
So why would RIM want to introduce carrier billing??? Carriers want an unreasonable portion of the sale just to put it on your bill. Maybe RIM could alternatively let developers choose if they want to accept carrier billing and charge them higher fees only for those transactions?
Still I have to wonder if there is not another reason for RIM raising the transaction fees. Maybe App World is losing money?