PapayaMobile creates partnerships to help developers make money on Android apps

When it comes to making money on apps, Apple developers are far ahead of Google Android developers. But PapayaMobile is announcing today that it has set up key partners to enable in-app purchases for Android apps.

If developers support it and consumers take to it, it could be a big deal. We’ll hear more about this development from Si Shen, chief executive of Beijing-based PapayaMobile, at DiscoveryBeat 2010, where she is a panel speaker today.

Android apps are monetized largely through advertising, but that leaves a lot on the table. A year ago, Apple pumped up its app economy by launching in-app purchases, or the ability to pay for an item from inside an app. The user simply taps the screen to buy something and the transaction is handled automatically. That has enabled a free-to-play model, where a user plays for free and pays real money for virtual goods, such as better weapons, in an app. The free-to-play model has worked so well for social game companies on Facebook that publishers such as Zynga are now worth billions of dollars. And Ngmoco, which focused on Apple’s iPhone platform, was recently sold to Japan’s DeNA for $400 million.

Since Android phones are selling at 200,000 units a day or more, the potential for a huge mobile app economy is there as well. But the Android Market needs a big upgrade. PapayaMobile, in the meantime, has organized a group of companies to enable in-app purchases for apps that use PapayaMobile’s software development kit. PapayaMobile has now partnered with mobile payments firm Zong, Billing Revolution, and Adknowledge’s Super Rewards offer division.

The Zong deal will let developers integrate billing via mobile carriers in 40 countries. With Zong, a user can make a payment inside a game by entering his or her mobile phone number. Zong sends a secure PIN code via text message, and then the player enters the code online. The payment is then billed to the mobile phone number. The user can thus pay for something online without having to enter a credit card number. Billing Revolution also enables users to pay for credit card transactions from any mobile phone with a single-click checkout.

These two companies allow users to pay for virtual currency from PapayaMobile, which in turn allows users to pay for virtual goods inside games. As part of its SDK, PapayaMobile offloads the task of creating a virtual currency, allowing developers to focus on their games instead. Shen said that partnering with key players in mobile monetization will let developers have a comprehensive solution for monetization when they use PapayaMobile.

With Adknowledge, PapayaMobile will let players use alternative payment systems such as special offers. With offers, users can sign up for an ad known as an offer. Rather than pay via credit card, they can pay for an app by signing up to buy flowers or subscribe to Netflix. Adknowledge’s Super Rewards division will let players earn virtual currency via thousands of targeted ad offers.

David Marcus, chief executive of Zong, said developers have continually cited poor payment options as one of the barriers to making money on Android. These solutions help fix that.