As a developer myself, one issue with the Android market has always been the payment methods…or rather, the lack thereof. Aside from Google Checkout and carrier billing for some companies within the US, there really aren’t a whole lot of options to consider, especially when dealing with the Android Market Developer Distribution Agreement.

Well, as with all things in the world of technology, a company seems to have found a bit of a loophole in regards to carrier billing for developers, or more specifically, integrating it into their applications and games. This has a lot of implications, including a big one: countries without access to paid apps and games on the Android market could still purchase them through free demos released by the developer.

The Loophole

The Android Developer Distribution Agreement does not specifically mention anything about in-app purchasing nor does it explicitly prohibit it. Enter Zong, a company that specializes in in-app purchases. Because they do not actually deal with selling the application or game, only the enabling of purchasing  of content through the application or game using carrier billing, it may have found a loophole in the user agreement.

The Android Developer Distribution Agreement has this to say about “Payment Processors”:

[They are] are a “party authorized by Google to provide payment processing services that enable Developers with optional Payment Accounts to charge Device users for Products distributed via the Market.”

Will Google allow this? Even the CEO of Zong is not completely sure what will happen.

I think someone has to push the limits here to see what happens. – David Marcus, CEO of Zong

It remains to be seen how exactly Google will react to this. Should Google look the other way or embrace this? It may open the door to a flood of developers for Android, a lot of which will come from the iPhone market.

How Zong Works

According the David Marcus, Zong institutes a one-click payment solution that is integrated into the application or game and is fairly easy to implement using their SDK. The process is easy: Zong verifies the phone number from which the purchase is made from and then the charge is automatically put onto the user’s wireless phone bill.

Since they basically act as a third party gateway and not an actual payment processor, it may very well bypass the stipulations in the Android Developers Distribution Agreement regarding payment processors.

zong android carrier billing

Add on the fact that the agreement does not actually prohibit in-app purchases, and this could provide developers with a legitimate way to offer in game/app purchases. There is one possible drawback though and that is what carriers tend to charge for carrier billing. Google charges developers a flat 30% which is taken out at time of purchase. Carriers can take 40%-50% per purchase depending on who the carrier is.

Developers will have to decide if having a much larger customer base is worth the extra money that would go to the carriers. Zong already supports 179 carriers in 40+ countries including all the top tier 1 and tier 2 carriers in the United States.

We feel that Android in the long run will be 40 to 50 percent of the handset market in the high GDP countries. Over the next 5 to 10 years, it will become a reality. – David Marcus, CEO of Zong, regarding Android’s growth.

Changing Times

Zong is not the only company working to find ways around Google’s hold on the payment system. Bango, Boku and Scoreloop all offer other forms of in-app purchasing that many iPhone developers are already taking advantage of. Scoreloop’s virtual currency system, for example, allows developers to implement a system where the user can buy additional perks such as more levels or special equipment in-game. A lot of major iPhone developers such as ngmoco and Tapulous have avoided porting to Android due to the payment issues, but if Zong’s plan succeeds, we may see this change very quickly.

The times are changing and unfortunately, aside from the rumored Paypal addition to market payments, Google has been falling behind when it comes to addressing developers needs with the Android market, specifically in regards to paid application access. This would be a convenient solution for Google, until they decide to get on the ball and seriously address the lack of support for paid applications.

For now Zong’s payment program is in private beta status, which you can easily sign up for if you are interested in participating. You can check out the demo video below to see how it all works inside an application (or in this case a game).

Source: MoCoNews