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Fortumo Founder and CEO Rain Rannu says offering local payment options could help Android apps make more money

February 3
9:55 AM 2014

While Android commands 81% of the global smartphone market share by the end of last year, the average Android app makes five times less money for every download compared to an iOS app, Fortumo Founder and Chief Executive Officer Rain Rannu wrote in his guest post at VentureBeat. Fortumo is a mobile payments firm that powers in-app payments for over 100,000 developers.

User demographics are often the most frequently-repeated reason as the cause for this disparity. The iPhone is seen as the top-end device in every country worldwide, which only those relatively well-off can afford. Android, meanwhile, has offerings from the high-end to low end-end. The logical assumption would be that someone who owns a more expensive Android smartphone would fork out more than the person who owns the low-end kind, Rannu wrote.

However, Rannu said the situation is much more complicated than just demographics. Fortumo's own transaction data covering paying users in different apps and territories on Android points that there isn't much difference in the average revenue per paying user or ARPPU.

In the US, the monthly ARPPU is $7.76 per month, Brazil records $4.7 monthly ARPPU, India has a $2.1 monthly ARPPU while Russia has a $10.5 monthly ARPPU. Although the average paying user in Brazil only forks out half compared to that of the user in the US, the average income difference between both countries is nearly five times that in favor of the latter. In India, the average income difference is about 30 times.

Perhaps the more "prosaic reason," according to Rannu, is that users in these countries cannot pay with a credit card since they don't own one. Major app stores like Google Play only accept credit card payments.

The number of credit card owners compared to the number of smartphone owners in these countries seems to prove this theory. In India, there are 19 million credit cards but 60 million smartphones. Brazil has 97 million smartphones but only has 66.6 million credit cards. Russia has 95 million smartphones but only 28 million credit cards. Rannu wrote that it is "very likely" that if the store supports more payment options, more users would pay.

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