Mobile messaging service provider, WIN, has woken up and smelt the coffee.
Have a read of this press release I just received:
Charities could be set to benefit from a campaign to erase commission charges on mobile text message donations. Currently, any mobile user who donates to charity via text message can see up to 30 per cent of their donation lost in network and third party delivery charges.
WIN plc, a leading provider of interactive mobile entertainment and information services, is looking to lead the campaign by announcing today that it will take no commission from any charity shortcode transaction that it handles via its distribution platform.
Graham Rivers, CEO of WIN plc, said: “Charities need to get the full amount without the middlemen – and we are one of them – taking a cut. WIN would like industry players, aggregators, and mobile operators to join us and help this become a reality.
“The UK Government has been known to waive the VAT on text donations to charity. A concerted move by all players to ensure charities get the full gift will also create more confidence in consumers and hopefully lead to a greater number of donations being made via text message. We need to create a win-win situation for the public and the charities.â€Â
If you’re a charity, this is brilliant news.
If you’re a mobile messaging provider, should you be matching this move?
What, though, happens with the percentage of revenue eaten up by the mobile operator? I’m not clear if the operator is going to waive their portion — that’s the largest part of the 30% that’s lost.
I think it’s a good move for the charity sector.
But I think it’s rather late.
It’s ridiculously late, actually.
Now and again, outcry from the national press in the UK has caused the mobile operators (and sometimes the messaging providers) to waive their revenue shares in special cases — for example, the Tsunami appeal.
But right now if you’re a ‘bog standard charity’ (and, it’s a shame to use that description) but, frankly, if you’re not sexy and you’re not hot, then at least 30% of any text donations are gobbled up.
For no good reason.
It certainly doesn’t ‘cost’ 30% to manage and process.
Donating to charity by text could have been a real, real go-er. But it’s yet another total unmitigated fluck-up by the just-don’t-get-it or just-don’t-care industry.
Perhaps Win’s move might change this.
In the meantime, when is someone going to create a Charity application for the iPhone that uses micropayments to enable folk to donate to the charity of their choice by just flipping up the app on their device and hitting ‘donate’?
WIN Plc: We won’t take commission on charity texts: http://ping.fm/Eedl2
WIN Plc: We won’t take commission on charity texts: http://ping.fm/Eedl2
Before this goes too far towards mobile-network bashing…
As you already mention the mobile-networks do waive their revenue share in special cases and support the charities in those situations (not only by waiving their fee but also with free on-portal advertising etc).
But having a policy to do this for all charities is something completely different. Just because an organisation meets the criteria to be registered as a charity, does not mean that it's automatically something that everyone will want to support. There are lots of charities that the mobile networks might not want to support – there are rabid religious charities that believe that a life of excruciating pain is better than no life at all and then those who fight for the legalisation of euthanasia – why on earth would a commercial company choose to support both?
Is is possible to go 'too far' towards mobile-network bashing? 😉
The words and opinions expressed below, are my own, and do not necessarily reflect the those of my company:
without having read the entire press release, I have some reservations about the 'smartness' of this move from the info detailed above.
Aside from the fact that from a business 101 perspective publically listed 'For Profit' companies, should probably keep trying to make profit, there are a number of other factors or issues with this kind of move.
Thats not to say there aren't admirable sentiments here, and I do strongly believe in achieving a sustainable and beneficial mobile solution for the charity sector, it's just WIN's solution really in my opinion doesn't make much sense.
In terms of the practicalities of this move, I wonder if WIN is retaining an operating margin? Also are they paying revenue mirroring carrier outpayments in the tiered style, or are they paying out based on the actual exact revenue they make. If it's the latter, and all aggregators followed suite, then charities would make a higher return based on the size of aggregator they work with.
There are around 170,000 registered charities in England and Wales and the practicalities of offering them all this kind of service is quite daunting. The carriers certainly don't have the resources to deliver on this sort of basis, and lets also not forget that there is still a real cost to running, maintaining and operating the infrastructure required to provide this service. Lets also not forget carrier bad debt issues which are typically/often swallowed/covered by the margins they make on PSMS and other billing mechanisms.
I know from experience that the carriers won't simply stop making commission on all charity transactions. It just won't happen. WIN's point is therefore somewhat moot anyway given how little aggregators take in terms of the revenues anyway. What does need to happen, and many companies have been campaigning for this for many many years (including work at genuine cost with lawyers, accountants and government departments about such considerations as VAT), is that the carriers offer a special deal which is standardised cross network and which deals with VAT. Incidentally there are a large number of considerations that carriers would need to make and at great cost, to deal with the VAT issue.
One off deals for large branded charity events are really a separate beast, and perhaps this is not the right forum to discuss them. Personally I think any money gained for good causes is great news, but to some extent the carriers doing this sort of thing does send out mixed messages. ('Sorry you're not a cool enough charity' etc). I wonder if WIN has a minimum criteria a charity would need to meet?
In summation, plaudits to anyone working towards better mobile solutions for charities, and if this move of WINs gets more charities involved in the sector, then great, but for me their efforts would be better spent trying to achieve something that would actually make a difference.
here endeth the lesson
I was wondering about the operating margin question. Very good response Njar.
thanks! Lets see if they comment 🙂
The words and opinions expressed below, are my own, and do not necessarily reflect the those of my company:
without having read the entire press release, I have some reservations about the 'smartness' of this move from the info detailed above.
Aside from the fact that from a business 101 perspective publically listed 'For Profit' companies, should probably keep trying to make profit, there are a number of other factors or issues with this kind of move.
Thats not to say there aren't admirable sentiments here, and I do strongly believe in achieving a sustainable and beneficial mobile solution for the charity sector, it's just WIN's solution really in my opinion doesn't make much sense.
In terms of the practicalities of this move, I wonder if WIN is retaining an operating margin? Also are they paying revenue mirroring carrier outpayments in the tiered style, or are they paying out based on the actual exact revenue they make. If it's the latter, and all aggregators followed suite, then charities would make a higher return based on the size of aggregator they work with.
There are around 170,000 registered charities in England and Wales and the practicalities of offering them all this kind of service is quite daunting. The carriers certainly don't have the resources to deliver on this sort of basis, and lets also not forget that there is still a real cost to running, maintaining and operating the infrastructure required to provide this service. Lets also not forget carrier bad debt issues which are typically/often swallowed/covered by the margins they make on PSMS and other billing mechanisms.
I know from experience that the carriers won't simply stop making commission on all charity transactions. It just won't happen. WIN's point is therefore somewhat moot anyway given how little aggregators take in terms of the revenues anyway. What does need to happen, and many companies have been campaigning for this for many many years (including work at genuine cost with lawyers, accountants and government departments about such considerations as VAT), is that the carriers offer a special deal which is standardised cross network and which deals with VAT. Incidentally there are a large number of considerations that carriers would need to make and at great cost, to deal with the VAT issue.
One off deals for large branded charity events are really a separate beast, and perhaps this is not the right forum to discuss them. Personally I think any money gained for good causes is great news, but to some extent the carriers doing this sort of thing does send out mixed messages. ('Sorry you're not a cool enough charity' etc). I wonder if WIN has a minimum criteria a charity would need to meet?
In summation, plaudits to anyone working towards better mobile solutions for charities, and if this move of WINs gets more charities involved in the sector, then great, but for me their efforts would be better spent trying to achieve something that would actually make a difference.
here endeth the lesson
I was wondering about the operating margin question. Very good response Njar.
thanks! Lets see if they comment 🙂