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Presentation by Ray Anderson, CEO of Bango, at the Virtual Goods Forum on 24th June. Topics covered: Transferring value into the Virtual World - Mobile and PC payment options * Benefiting from vrtual success - getting real money from virtual goods * Trafficking, Terror and Drugs - Money Laundering through Virtual Goods
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© 2010 Bango plcwww.bango.com
Virtual Goods as aProxy for Money orReal Goods
Ray Anderson, Bango CEO
24th June 2010
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Mobile operator relationships
Awards
Customers include
Bango provides the technology that enables commerce with mobile users.
Founded 1999
New York and Cambridge (UK)
London Stock Exchange (BGO.L)
1000+ customers
Billions of transactions:
- 70m users- All countries
Who is Bango?
Bango PaymentHigh efficiency collection of payments from mobile phone users anywhere in the world
Bango AnalyticsPrecise measurement of mobile user activity, marketing campaign effectiveness and revenue from mobile sites.
Company Products
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Bango for websites selling content:
PaymentConfirmed
MarketingCampaign
Bango collects payment by selecting “best biller” based on user, user
history, content type & other factors
Maximize number of payments
Bango unique technology and relationships have been
developed to maximize number and value of successful payments
Viral, App orBookmark
(1) User browses to mobile site / app
(2) Bango collects payment
for content
(3) Content Provider provides
download page
Bango BillRank™
AggregatorsResell Premium SMS billing
Operator BillingDirect connect to operator
Alternatesto expand coverage
Competitive Advantages:
- Biller Independent (select best)- Operator Relationships- User histories across many CP- End user experience- Comprehensive reporting- Cross border transactions
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The Amsterdam Experience
• Cannabis Leaf Logo for €5
4562
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Cash Preference
Security
Legal Restrictions
Anonymity
Payment Method Drivers
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But … Operator Billing
Bango sendsContentProvider c.60%
MobileOperator
keepsc.35%
Bango 5%
Bango system generatespayment by phone
user on billing system.
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$US 1.00 in various virtual currencies
• 10 Facebook Credits • 125-170 WOW Gold (World of Warcraft) • 80 Microsoft Points • 10 Project Entropia Dollars (Entropia Universe) • 6 Q coins (QQ.com) • 250 Linden Dollars (Second Life) • 1.5mil Star Wars Galaxies Credits • 6 Habbo Coins (Habbo Hotel) • 10 Twollars (Twitter) • 100 Nintendo points • 1,000 IMVU credits • 80 hi5 coins • 5 Farm Cash (FarmVille) • 5.71 WildCoins (WildTangent WildGames) • 2,000 Therebucks• 100 Whyville Pearls • 2.5mil ISK (EVE Online) • 0.75 Mahalo Dollars • 4 Zealies (Dogster) • 10 Ven (Hub Culture) * Values are approximate.
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Paypal Model
1 Customer makes purchase.
2 PayPal determines likelihood of sufficient funds in customer’s bank account.
3 If OK, Paypal sends money to merchant’s Paypal account, minus a fee.
4 Paypal sends transaction data to third-party processor.
5 Processor requests payment from card-issuing bank (or customer’s bank account).
6 Card-issuing bank transfers payment to processor.
7 Processor transfers payment to Paypal, minus a fee.
Diagram based on wired magazine
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Credit Card Model
1 Merchant runs customer’s card through card reader, for which it pays a fee.
2 Reader sends sales data to merchant’s bank.
3 Merchant’s bank requests approval from the card-issuing bank.
4 Card-issuing bank grants approval.
5 Merchant’s bank sends approval to Reader.
6 Merchant approves sale.
7 Merchant sends record of transactions to its bank for processing.
8 Merchant’s bank requests payment from card-issuing bank.
9 Card-issuing bank transfers funds, minus a fee.
10 Merchant’s bank deposits payment in account, minus a fee.
Diagram based on wired magazine
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Store Vouchers
• Harrods Gift Card
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iTunes Model
Apple’s online store cuts credit card fees and friction by bundling a customer’s purchases over time and processing them as one transaction.
1 Customer orders and downloads purchase from iTunes.
2 iTunes aggregates orders over a period of time, then requests payment from card-issuing bank.
3 Card-issuing bank transfers payment, minus a fee.
Diagram based on wired magazine
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Linden Labs / Second Life
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Bango Value
• $10 Bango Value – redeemed for $10 Content / Game / App
• $10 converted to Cash at 70% (Operator normally takes 30%)
• Possible to buy pre-pay Bango Value for $7.50
• Profit from Trading
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“Currency Exchange”
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“Currency Exchange”
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Protections
• AML
• KYC
• Fraud
• Bullying
• Remorse
But …
Cellular approach… Outpayment Delay…
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Conclusions
• Proxying is live today
• Highly competitive with “real money”
• Can more easily be used for rewards
• Great fit with Mobile