Boku Blog

Archive for July, 2009

Consumer Safety Tips

July 23, 2009
iphone-lock1
    BOKU is a simple, fast and secure way to pay for digital goods and services online. Since you always need to have your mobile phone with you to complete the transaction, there are security benefits over credit cards and other forms of payment. That said, we recognize that an increase in the adoption of mobile payments will eventually lead to people and entities trying to take advantage. This is one of the reasons that I left PayPal to join BOKU. Here I can apply my experience with risk and fraud in internet payments to create a world class risk system for BOKU’s mobile payments platform and also help consumers across all mobile payments companies. I’ve put together a few tips to help customers in protecting their mobile phone from unauthorized payments.

1. Lock your phone

Most phones on the market these days have the ability to set a PIN code that must be entered in order to use the phone. It prevents people from not only using your phone to make calls and send messages but also protects the personal information you keep on your phone such as contact information for you and your friends and family, emails, photos and any other information you keep there. And, since you’re not required to enter the PIN in order to receive calls it’s a very small inconvenience in order to get lots of protection. This is a great feature to protect you from misuse in the event that your phone is lost or stolen, or even if you’re worried that someone in your household (like a child or roommate) might use your phone without your authorization. If you are not sure if your phone has this capability or how to enable it, check with your mobile service provider for assistance.

2. Consider purchase blocking

A particularly great feature for parents and something that everyone should be aware of is the ability to put a purchase block on your phone. This feature will prevent the phone from being used to make purchases for ring tones, games, etc. (things that are “extras” to your mobile contract). You won’t be able to use BOKU if you have a purchase block on your phone but it’s a cool feature to control spending, especially for children.

We want to make sure you’re happy with your BOKU purchases. So, if you don’t think you’ll ever want to use our service we can also put a BOKU block on your phone: just contact us at http://www.boku.com/help/support/. Note, however, that this type of block is for BOKU only so your phone could still be used for purchases on other similar payment services.

Also, while we prohibit certain types of products and services, like adult, from being offered on BOKU we thought you might also like to know that there are carriers who offer related services for blocking, such as Orange’s Safeguard program in the UK (http://www1.orange.co.uk/safety/mobile/152/155.html). Check with your carrier to see what’s available in your market.

3. Review SMS message content

If you have an email address, then you’ve likely had the experience of receiving spam: unsolicited or undesired emails that can be harmless but can also be a “phishing” scam, attempting to get you to log into a spoof web site in order to steal your passwords, asking you to reply and give up personal information, etc. Click http://www.onguardonline.gov/topics/phishing.aspx (or http://en.wikipedia.org/wiki/Phishing) for more information about phishing. You should be aware that it’s also possible that you may receive such messages via SMS with similar scams.

At BOKU,

  • We’ll never ask you to send personally identifiable information via SMS.
  • Messages will only come from one of our approved “short codes”. This means it will not look like a typical phone number in your region.
  • The only messages that our system accepts (and thus, the only things we’ll ask you to send us are) a single word or a word followed by a number (the specific word varies by market).

If you receive any messages that appear to be from BOKU but are not on this list, forward them to fraud@boku.com and DO NOT RESPOND.

4. Don’t get tricked

Your phone has the ability to be make purchases, just like your credit card. It’s exciting, but it also means you have to protect it from people trying to place unwanted charges on your bill.

You’ve likely heard about scams where people send a cashier’s check and then ask the recipient to cash it and send money to them, often via a money transfer service like Western Union. Sometimes this is done in conjunction with something you’ve sold and they send an overpayment (I’ll give you the $500 you wanted for the computer and then another $500 and you send me the computer and $500 in cash), sometimes they tell you that you can keep a percentage of the check and send only the balance, sometimes you’re told “you’ve won the lottery”, etc. Whatever the technique, the result is that you get “tricked” into doing something that will benefit the other party such as giving them money for something you’ll never get, giving them information they wanted, giving them access to your computer, etc. This is a fraud technique called “social engineering”: http://en.wikipedia.org/wiki/Social_engineering_(security).

In the mobile space, one form of social engineering can happen when someone convinces you to respond to a transaction confirmation, resulting in charges being placed on your bill. They may tell you something like “you’re going to get a message – just respond “Y” and then I’ll send you a picture of <your favorite star> naked.” (you won’t ever see that picture, by the way).  Facebook IQ tests are notorious for this.

Some simple pointers:

  • Don’t give out your phone number to people you don’t know, especially in a chat room. While the phone number in and of itself will not allow someone to charge your bill, it can be used to help in the “trickery” scheme.
  • All BOKU transactions are generated on the internet. If you weren’t on the internet and/or you didn’t ask for the message to be sent to you, DO NOT respond.

As always, if you have any questions or concerns you can reach us at http://www.boku.com/help/support/ or email fraud@boku.com.

Posted by martine | security

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MobileBeat 2009: The social media and content break-out

July 17, 2009

Good session today on social media and content.

Here are a few highlights:

  • Facebook is creating mobile apps in partnership with handset manufacturers and carriers, not just the iPhone because of country/geographic need. For example, the blackberry app is huge in Indonesia. Each one requires customization due to unique requirements.
  • Mark Pincus and Shirven Pishevar had some product suggestions for Henri Moissiniac from Facebook that include adding a “games” tab.
  • Zynga – 17 million daily uniques and ~60 million monthlies. If I heard it correctly, 50% of their app users are using FBConnect and those that do have higher engagement. They hacked the original FBConnect, prior to the mobile version’s release to enable FBConnect for their mobile apps.
  • Interesting Apple iTunes micro-transaction restriction only allows micro-transactions within paid apps. This means that “free-to-play” isn’t as possible on iPhone. Currently Zynga has to create multiple versions of the same app for different prices/features.
  • Great question came up of whether Apple would ever allow its billing platform to be accessed outside of the iTunes store. Facebook is more focused on this opportunity, and possibly better suited.
  • On the question of longevity, the panel unanimously agreed that this is far from a fad and will continue, unlike ringtones and wallpaper on mobile phones.
  • Offers on mobile aren’t working – Zynga tested and “threw them out”
  • Shervin sees games as pleasant distractions that are sought out enjoyment, like a Pixar movie.
  • Mark believes that people will only discover games if enticed by social relationships to try them out because of the busy nature of our lives
  • David Marcus – Frictionless nature of mobile payments work well for impulse purchases.
  • The #1 position in the iTunes app store is worth 30-40,000 downloads a day – Shervin
  • A lot of focus was given to Facebook and iPhone as the platforms of choice. Mark put this as, “Fishing where the fish are.”

Overall, the explosion of these mobile games leveraging social connections is bringing in gamers (new and old) and creating additional opportunities to monetize beyond the download. It’s an easy prediction that Apple will change the rule that in-app billing can only occur for paid apps; it’s just a matter of when. Where we’re going to move is to a connected gaming experience across devices leveraging the social network. Many of us who weren’t prior, will be playing synchronous and asynchronous games with friends and family as a way to blow off steam and “connect.”

Posted by Ron | online game sites, social networking

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Icebreaker integrates BOKU

July 16, 2009

In addition to being selected as one of 7 services as “Top Start-Up” by judges at MobileBeat2009, we also announced our integration with Icebreaker and their Crush or Flush mobile social network.

With BOKU, Icebreaker users are able to purchase “Coins,” a virtual currency, for use on the Crush or Flush™ mobile social network with their mobile phones, bringing the convenience of mobile payments to the mobile community. Additionally, BOKU enables Icebreaker to bill for coins in instances where WAP billing is not available.

Posted by Ron | integration, social networking

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VentureBeat: “Alternative payments: Will history repeat itself?”

July 14, 2009

This was originally a guest post written by Ron Hirson, SVP of product and marketing, on VentureBeat where he discusses the alternative payment methods for virtual goods and currencies on social networking and online game sites.

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    With the phenomenal growth in social networks, online games and virtual worlds, we’re seeing a shift in monetization away from traditional advertising and credit card commerce. Virtual goods and currencies across these platforms, as well as gaming models like free-to-play, are opening a whole new world of things to sell and ways to pay for them. Facebook alone is calculated to have had $500 million of virtual goods and currencies run across its platform as people buy everything from birthday cakes to godfather favor points, for their friends and themselves. In addition to the usual means of paying for these virtual goodies, we’re seeing a host of other methods: cross-sell exchanges (ex:, sign up for Netflix, get points/etc.), time barters (ex: Fill out a survey), and even new credit sources (ex: Charge to your mobile or home phone).So who are going to become the leading companies providing these new alternative payment methods? Here at BOKU, we’re building a new payments service focused on mobile, and we’ve been looking at past winners such as PayPal and BillMeLater to see what key lessons we can learn from their previous success. We talk about these key learnings below and then consider what has changed since then as a guide in predicting the next leading payment platforms.
    Key learnings:
    Be flexible. When PayPal launched, their original vision was to make money on the float created by allowing people to send money to each other safely over email (technically it started out over PalmPilots, but that’s another story). They shifted to focus on merchants on eBay and other P2P commerce sites and built out the operational capabilities to serve those merchants over time (and just a few days ago they announced their new Adaptive Payments API, opening up parts of their platform to developers). Some shifts in alternative payments are already happening as lead-gen sites (offers) are starting to add more and more direct payment methods and give them greater real estate (pixels).

    Ride a wave. PayPal’s had eBay auctions and the need for a trusted intermediary to handle the transfer of funds from buyer to seller. BillMeLater leveraged a mature ecommerce environment and offered a product that reached a segment of customers that either didn’t want to provide financially identifiable info or preferred to buy with credit. (As a disclaimer, BOKU’s CEO, Mark Britto, was an early investor in and board member of BillMeLater). Today virtual goods and currencies have a unique combination of low price-points and near-zero cost-of-goods-sold (COGS), enabling everything from a simple survey to a mobile payment as means to pay.

    Reduce friction. Once you have a PayPal account it’s easier to “checkout,” especially on a site you haven’t shopped at before, than entering in your credit card information. BillMeLater was able to tap into a cohort of customers for merchants who still are reluctant to give up financial information over the web. Amazon and other ecommerce sites saw a 5-7% lift in customers transacting after adding BillMeLaters payment service. Today, mobile payments are seeing huge revenue growth because they are more convenient than other payment methods online. This is because you either 1) have a phone but not a credit card or bank account (as is the case in emerging countries like India, where only 1 in 3 people has a bank account), or 2) it’s just easier to enter your phone number than credit card number, address, zip, CVV number.

    Go big. PayPal focused relentlessly on removing barriers to adoption- and they invested high (reportedly between $4-10) acquisition costs for each customer. They invested $100+ million to grow their market and reaped the rewards of network effect they created. Facebook has the clearest opportunity to be the next network of customers, though others are working on this as well.

    Invest in security early. PayPal reportedly had over 50% of its original 650 employees working on fraud prevention and customer support. It’s rumored that early fines and fraudulent activity have now brought their CS and fraud team to 2000+. Mobile payments, by design, require that you have your phone in order to complete a transaction and since it’s almost always in your possession (or more importantly, you realize as soon as it’s not), possess significantly less “stolen identity” fraud than in traditional payment methods such as credit cards. However, all alternative payment methods, including mobile, are going to have to invest in technology and people for fraud prevention as success will bring unwanted attention from the same people that have their sights on PayPal and BillMeLater.

    What’s Changed?

    Focus on merchants before consumers. Open platforms and ease of integration allow merchants (app developers and game publishers) to integrate payments services very easily. A simple iframe with few lines of code are all that are needed. Payments companies don’t have to go straight to consumer. PayPal kick-started their network effect by buying customers, initially for a $10 bonus for each one referred, and they’re now turning more deliberately towards merchants with the Adaptive API. BillMeLater had the benefit of appearing in the checkout flow and either did rev-shares or direct payments to merchants. By existing as an option in the checkout flow, payment companies can skip the higher direct-to-consumer acquisition fees, and focus on those who have intent to purchase instead of hoping to convert registrants to transacting customers.

    Payment variety. PayPal does offer the ability to pay with your credit card or bank account, while BillMeLater is essentially a credit application, but what we’re seeing with the alternative payments companies today, especially amongst the “offer” companies, is the aggregation of multiple payment methods. SuperRewards, Gambit, and Offerpal now offer credit cards, mobile phone payments, offers, PayPal, etc. and combinations of the above. The ease of integrating these companies means that the developers can focus on what they do best and still offer all types of payment methods to optimize revenue. But variety is leading to clutter and poor user experience and payment aggregators will focus in the coming quarters on cleaning up the interface to deal with the issues that come about from the paradox of choice.

    Ease of Integration. When PayPal for checkout arrived it was arguably the easiest of all the payment integration methods (versus PaymentTech, etc.). However, this now seems complex compared to the simple addition of an iframe and a few lines of code to confirm transactions. This ease of integration means that developers are adding, duplicating and swapping payment methods often. Some game developers have 4 of the top payment aggregators running at once and display them in tabs, for customers to switch between – increasing revenue dramatically. This ease of integration is double-edged. While it has been in our favor recently, we’re aware that this means if we aren’t delivering results, we will be swapped out.

    Global faster. Social Networks are global. Publishers of apps and games are global. They want domestic and global solutions at the same time. It’s become clear that advertising and credit cards aren’t the only solution to monetizing these services, and in some cases the new payment methods are better able to make money both in North America/Western Europe (the head) as well as emerging markets like SE Asia/Latin America (the tail). BOKU is live in 50 countries – we take a ‘head and tail’ approach to international reach. An app’s next fan base may just be in Thailand, Malaysia, or Turkey. PayPal got global reach later in their evolution mainly because, at its inception, ecommerce revenue was only coming from 8-10 places.

    What’s next?

    Based on what we’re hearing from working directly with online games and social applications and in partnering with payments aggregators, it’s clear the industry is shifting from the “revenue at all costs” phase to the “optimization and analytics” phase of monetization. Great apps and gaming companies that are already making $1-30 million are already hiring more web monetization and merchandising experts and user experience, reach and results are being rightfully questioned. Merchants will be looking closely at payments companies and their ability to provide long-term operational value. The rest of 2009 will clearly identify leaders, while others will fail to see 2010. We at BOKU are working hard to take these lessons to heart and do our best to become a standard in mobile payments.

Posted by admin | Mobile Payments, online game sites, social networking

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