App-based Payments Guidance

February 27, 2012

On 27 February, PhonepayPlus, the UK regulator of premium rate telephone services (PRS), published its Guidance on application-based payments.

Following a 10-week consultation with industry, the Guidance sets out guidelines for providers of mobile applications using premium rate payments. It advises on compliance with the PhonepayPlus Code of Practice and aims to help providers create consumer confidence in their services. The Guidance is aimed at any company which offers digital goods and/or services that are purchased via premium rate (ie where a charge is made to the consumer’s phone bill and/or pre-pay account.  

The Guidance includes recommendations as to what pricing and other key information should be included at the point of sale for both apps (including the use of ‘freemium’ based models) and in-app purchases (eg promotion of virtual currencies), including best practice as to how companies can robustly verify a consumers consent to charge. Providers are expected to identify potential risks, such as malware, in compromising the integrity and validity of a consumer’s consent to be charged or marketed to. The Guidance reminds providers that consumers must have a clear method of exit from a service, which should immediately result in them receiving no further charge once they have exercised it, and PhonepayPlus offers recommendations as to how that method of exit can be sufficiently clear to consumers. It is also made clear that consumers should be provided with clear and identifiable contact details to make a complaint or enquiry, and in line with PhonepayPlus’ generic expectation that such matters should be resolved quickly and efficiently by the provider concerned. Any company offering a mobile-based payment mechanic, such as premium rate, should ensure their services are compatible with each technical network platform and/or handset on which they are promoted.

The Final Statement following PhonepayPlus’ Consultation on Guidance on application-based payment in support of the PhonepayPlus Code of Practice can be read here.