In-Application Payment from Mobile Apps

129 Pages·2013·1.26 MB·English

In-Application Payment from Mobile Apps
A study of In-App Payment
Jøran Christiansen Haines
Alexander Hanssen
Master of Science in Informatics
Submission date: May 2013
Supervisor: Torbjørn Skramstad, IDI
Co-supervisor: Lillian Røstad, IDI
Norwegian University of Science and Technology
Department of Computer and Information Science

1 Preface
This thesis was written by Alexander Hanssen and Jøran Haines. For the
last two years we have been studying Informatics - Systems engineering and
human-machine interaction, after previously studying at the University of
Nordland together. The master thesis was written as a part of a ongoing
collaboration project between IDI at NTNU and Telenor, and it marks the
end of our 5 year long studies.
We would like to thank our supervisors, Erik Berg from Telenor and
Lillian Røstad.
Finally we would like to thank our families and friends for the support
and help throughout our studies and writing our thesis.
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Contents
1 Preface 1
2 Abstract 9
3 Sammendrag 10
4 Introduction 11
4.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.3 Research questions . . . . . . . . . . . . . . . . . . . . . . . . 14
4.4 Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5 Current in-app payment service providers 17
5.1 Apple . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.2 Google . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.3 PayPal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.4 Windows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.5 Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6 The business aspect 23
6.1 What type of application fits which type of business model? . 24
6.2 A deeper look into Freemium as a business model . . . . . . . 25
7 Application development 27
7.1 Android . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.2 PayPal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.3 Google . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.4 iOS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8 Comparison model 41
8.1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.1.1 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.1.2 Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.1.3 Business models . . . . . . . . . . . . . . . . . . . . . . 42
8.1.4 Distribution . . . . . . . . . . . . . . . . . . . . . . . . 42
8.1.5 Market size . . . . . . . . . . . . . . . . . . . . . . . . 42
8.2 Technical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.2.1 Registration . . . . . . . . . . . . . . . . . . . . . . . . 43
8.2.2 Development . . . . . . . . . . . . . . . . . . . . . . . 43
8.2.3 Testing . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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8.2.4 Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.2.5 Ease of use . . . . . . . . . . . . . . . . . . . . . . . . 43
8.2.6 Documentation . . . . . . . . . . . . . . . . . . . . . . 43
8.2.7 Supported technology . . . . . . . . . . . . . . . . . . . 44
8.2.8 Support and community . . . . . . . . . . . . . . . . . 44
8.2.9 Security . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9 Evaluation of the service providers 45
9.1 Evaluation of Apple . . . . . . . . . . . . . . . . . . . . . . . . 45
9.1.1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . 45
9.1.2 Technical . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.2 Evaluation of Google . . . . . . . . . . . . . . . . . . . . . . . 53
9.2.1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.2.2 Technical . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.3 Evaulation of PayPal . . . . . . . . . . . . . . . . . . . . . . . 63
9.3.1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.3.2 Technical . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.4 Evaluation of Windows . . . . . . . . . . . . . . . . . . . . . . 70
9.4.1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.4.2 Technical . . . . . . . . . . . . . . . . . . . . . . . . . 73
10 Comparison 75
10.1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.1.1 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.1.2 Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.1.3 Business models . . . . . . . . . . . . . . . . . . . . . . 80
10.1.4 Distribution . . . . . . . . . . . . . . . . . . . . . . . . 81
10.1.5 Market size . . . . . . . . . . . . . . . . . . . . . . . . 82
10.2 Technical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
10.2.1 Registration . . . . . . . . . . . . . . . . . . . . . . . . 84
10.2.2 Development . . . . . . . . . . . . . . . . . . . . . . . 84
10.2.3 Testing . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
10.2.4 Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 87
10.2.5 Ease of use . . . . . . . . . . . . . . . . . . . . . . . . 88
10.2.6 Documentation . . . . . . . . . . . . . . . . . . . . . . 89
10.2.7 Supported technology . . . . . . . . . . . . . . . . . . . 89
10.2.8 Support and community . . . . . . . . . . . . . . . . . 90
10.2.9 Security . . . . . . . . . . . . . . . . . . . . . . . . . . 90
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11 User survey 95
11.1 Defining the survey . . . . . . . . . . . . . . . . . . . . . . . . 95
11.2 Data collection . . . . . . . . . . . . . . . . . . . . . . . . . . 97
11.3 Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
12 In-app purchases in the future 111
13 Conclusion 113
13.1 Future work . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
A User Survey 123
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List of Tables
1 Apple profit after 1200 in-app sales. . . . . . . . . . . . . . . . 45
2 Google profit after 1200 in-app sales . . . . . . . . . . . . . . . 53
3 Norwegian fees for PayPal . . . . . . . . . . . . . . . . . . . . 63
4 International fees for PayPal . . . . . . . . . . . . . . . . . . . 63
5 PayPal profit after 1200 in-app sales . . . . . . . . . . . . . . 64
6 What kind of functionality the MPL and MECL support . . . 65
7 Windows profit after 1200 in-app sales . . . . . . . . . . . . . 71
8 The different fees for the providers . . . . . . . . . . . . . . . 75
9 Business models supported by the different service providers . 80
10 Available apps, amount of downloads and users for each provider 83
11 Development rating for the service providers . . . . . . . . . . 86
12 The languages which are supported by each service provider . 90
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List of Figures
1 Main menu of our application on the Android platform. . . . . 28
2 The ability to choose between different categories in a drop-
down menu . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3 The question and 4 alternatives in the game. . . . . . . . . . . 30
4 The score screen after an ended round. . . . . . . . . . . . . . 31
5 OurstorewithPayPalpurchasebuttonsandthepurchasecon-
firmation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6 The in-app product presented in the Google Play Store. . . . . 34
7 The pop-up box that is displayed after selecting a question
pack to purchase. . . . . . . . . . . . . . . . . . . . . . . . . . 38
8 A graph showing how many sales are needed to make a profit . 77
9 Profit after 1 month of sales . . . . . . . . . . . . . . . . . . . 78
10 Profit after 6 months of sales . . . . . . . . . . . . . . . . . . . 78
11 Profit after 12 months of sales . . . . . . . . . . . . . . . . . . 79
12 Profit after 75 000 applications sold . . . . . . . . . . . . . . . 80
13 Malware by platform, 2011-2012 [1] . . . . . . . . . . . . . . . 91
14 Mobile threats by platform, 2011-2012 [2] . . . . . . . . . . . . 92
15 Question 2: ”How many years of experience do you have with
programming?” . . . . . . . . . . . . . . . . . . . . . . . . . . 98
16 Question 3: ”Which of these platforms have you developed for?” 99
17 Question 4: ”Which platform do you prefer to develop for?” . 99
18 The people who have developed for each platform, and which
one they preferred . . . . . . . . . . . . . . . . . . . . . . . . . 100
19 Question 5: ”Which of the following business models have you
implemented in your app?” . . . . . . . . . . . . . . . . . . . . 100
20 Question 5: ”Which of the following is your preferred business
model in mobile apps?” . . . . . . . . . . . . . . . . . . . . . . 101
21 The table which shows how important each property/feature
is to the participants . . . . . . . . . . . . . . . . . . . . . . . 103
22 How important good guides and documentation are for the
different programmers . . . . . . . . . . . . . . . . . . . . . . 104
23 The table which shows how important each property/feature
is to the participants, questions more focused on in-app purchase105
24 The chart which displays the important properties for the de-
velopers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
25 The chart which displays the important properties for the de-
velopers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
26 How highly prioritized good guides and documentation are for
the different programmers . . . . . . . . . . . . . . . . . . . . 108
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27 How highly prioritized security properties are for the different
programmers . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
28 How highly prioritized potential profits are for the different
programmers . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
29 How highly prioritized no fees are for the different programmers109
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