/ Technology

PhonepayPlus: New rights if you charge apps to your phone bill

Google Play Store

Today PhonepayPlus launched a pilot to regulate app store purchases that are charged to your phone bill. Here’s the regulator’s Chairman to explain the new payment method and the protections that come with it.

Google’s Play Store will be the first participant in the pilot, which PhonepayPlus is running in its role as the UK’s premium rate phone services regulator.

Over the past year, Google and a number of other major app stores have been rolling out phone billing to their users. This means that consumers on participating phone networks have the option of paying for digital content like apps, games, music and videos on their phone bills rather than using credit, debit or pre-paid gift cards.

New app store protections

Paying on phone bills can be a popular alternative when purchasing content and offers app developers another way for customers to buy their product.

Crucially, people who pay on their phone bill will also now benefit from the consumer protections set out in the PhonepayPlus Code of Practice, in addition to the app stores’ own policies. These are that providers and services:

  • Must comply with the law.
  • Must ensure that consumers are fully and clearly informed of key information, such as the price, before purchase.
  • Must treat customers fairly and equitably.
  • Must not cause the unreasonable invasion of customers’ privacy.
  • Must not cause harm or unreasonable offence to consumers or to the general public.
  • Must ensure that consumers are able to have complaints resolved and any refunds paid quickly and easily.

These protections, which amount to a new digital deal for consumers, are important in the digital environment where payments are frictionless and people can be tempted into making impulse purchases that may add up to considerable sums.

Running up big app bills

As a regulator, we’re particularly concerned about the problem of children running up high bills when making repeat purchases, such as through in-app payments. We recognise that this issue is of growing concern to parents and we are working closely with Google, other app stores, consumer bodies and other regulators like the Competition and Markets Authority to address this problem.

There are three simple pieces of advice that can help if you buy apps via your phone bill:

1. Check the price before you buy an app. If the app is free, check whether it offers any in-app payments and what ‘permissions’ it will request.
2. Check your phone bill regularly and query anything that you aren’t sure about.
3. Be careful if clicking on any in-app ads, new app icons or notifications that you don’t recognise and make sure you understand what they do.

In case of problems, you should contact the app store and your mobile network. If the problem isn’t resolved, contact PhonepayPlus online or phone 0800 500 212.

Your stories of buying apps

We’d welcome feedback on your (or your children’s) experience of purchasing digital content through app stores. While we recognise that most people will have had a positive experience, we’re keen to hear of any problems that you’ve encountered, such as running up unexpectedly high bills and whether you successfully gained a refund.

Would you buy smartphone apps via your phone bill? Are you pleased to see extra protections in place?

Which? Conversation provides guest spots to external contributors. This is from Andrew Pinder, Chairman of PhonepayPlus. All opinions expressed are Andrew’s own, not necessarily those of Which?.


The ability to charge any third party payments to one’s phone bill should be opted out by default with the right to opt in. Phone bills should be restricted to telecommunications charges only unless the bill payer expressly agrees otherwise. By third party payments, I mean premium rate phone calls, premium rate SMS, reverse charge premium rate SMS as well as app purchases and in-app purchases.

ND says:
28 May 2014

Agreed! I just can’t understand why such things haven’t already been enforced – an all inclusive opt-in rather than opt-out!!??? How hard can be it be to NOT allow additional payments to be made without express permission (i.e. a 3 digit code or something needs to be entered before payment goes ahead rather than a time consuming password entry, just like with parent protected TV services for example). Why is something so extremely simple so impossible for them to solve?????

John BaRoss says:
29 May 2014

Congratulations to PhonepayPlus, Google Play and UK Regulators on agreeing to this pilot – and best wishes that results exceed expectations. Having headed successful pilots (yes, plural) for phone bill billing of eCommerce purchases over a decade ago with AT&T in the USA, there is no question that sizable segments of the online community embrace the phone bill billing payment option because they trust the billing relationship with their telecom carrier more than other traditional and emerging payment options. Marquee companies like AOL, Disney, Sony, RealNetworks and others saw a lift in revenues of 10-30%+ as a result of adding the phone bill payment option (incremental revenue not cannibalized revenue from existing payment options).

Google Play understands that phone bill billing allows them to reach larger addressable markets and has emerged as the world’s leader in convincing carriers globally to adopt phone bill billing of eCommerce. Generally, legacy thinking at many carriers is network centric but increasingly, momentum is growing the demonstrates leadership in the industry worldwide is having an epiphany that their crown jewels are the direct, trusted billing relationship to hundreds of millions.

While regulations vary by country, stewards of the phone bill billing renaissance have a responsibility to diligently address regulatory and market concerns to ensure a win-win for everyone (consumers, web merchants, regulators). Opt-in is a wise, fundamental design consideration, as are credit limits for non-telecom purchases to phone bills. Sub-account billing is a design option that can serve markets where under aged online purchasing ability is desired – with modest credit limits for kids based on either regulatory decree or parental control depending on the market.

Credit card penetration varies by market. Unbanked populations are sizable across all markets. Universally there continues to be legitimate concerns and fears about online security, hackers, etc. Phone bill billing meets a legitimate marketplace need on many fronts and its role as a major alternative billing option for ecommerce/mobile commerce is inevitable (and not just for digital goods, but also for services and physical goods).

“Must comply with the law.” Exactly what law are you referring to?

Invigilator says:
31 May 2014

Don’t be pedantic.

In my experience a Code of Practice isn’t worth anything, unless it’s backed up with teeth. hence what law is it referring to? Otherwise I can see it being ignored. And will companies caught breaching the Code of Practice be warned first like regulators like ofcom do or will they be punished for the 1st offence like they should be.

And it would be nice if when a contributor makes reference to something , in this case, like stating a law, if they go on to qualify it. If they can’t get the little things right how can I have any faith they’;l get the big things right.

I agree with you William. Vague mentions of the law are not as reassuring as outlining what laws are relevant to this new extension of spending power. Is a credit license required?

A little research reveals the nature of the beast but I have not the inclination to look up its effectiveness[?] when it was ICTIS.

Hi William and dieseltaylor,

PhonepayPlus has a range of powers to deal with PRS providers that breach the Code of Practice, including issuing fines and banning them from the market.

Whether the Code has been broken, and what sanctions to apply, are considered by an independent tribunal – the Code Compliance Panel (CCP).

For example, here is one of the cases that the CCP considered earlier this year:

I do find it very depressing that some people feel instant money is a good thing without considering that mankind is a easily persuadable irrational creature and that checks on impulsiveness are a good thing.

I speak with decades experience of lending, retrieving money and straightening peoples accounts out. I can but admire the huge profit potential open to companies who do the facilitating of spending getting a cut of the transaction without any real effort.

However by extension outside of telephone calls if they are making micro-payments or more are they then credit providers?

If one was required to pre-load your account with money perhaps people would avoid ending up with financial problems as the worst thing could happen is that there phone would cut off. Well apart from the emergency services and a nominated Bank.