For Flattr, mobile becomes more of a barrier, less of an opportunity

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Posted 29 May 2012 10:33am by Patricio Robles with 0 comments

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Despite all of the well-documented challenges facing organizations that are trying to take advantage of the rapid rise of mobile, mobile presents what may be one of the greatest business opportunities for many companies.

It's not hard to understand why: there are estimated to be more than 5.5bn handsets in use globally today, making the mobile phone one of the most ubiquitous devices ever. 

In developed and emerging nations, a growing number of those phones are smartphones that offer always-on access to the web.

The rapid adoption of increasingly sophisticated and connected mobile phones is a game-changer for many existing industries and a creator of industries still yet to be born, but for some companies, mobile may still prove to be more of a barrier to success than a driver of it.

Case in point: micropayments startup Flattr, which aims to make it easy for consumers to support content creators producing high-value work and publishing it on the web (think micro-donations to websites you like). Econsultancy's Jake Hird included Flattr's model in his list of 15 online business models you'll wish you'd thought of first and although Flattr may not be a mainstream phenomenon (yet?), the company, which launched in March 2010, has managed to build a following over the past couple of years.

With more and more content being produced and distributed through mobile apps, it's no surprise that Flattr has encouraged publishers using its service to integrate Flattr into their mobile apps.

But yesterday, Flattr's Siim Teller published a blog post detailing how Apple has rejected apps that integrate with Flattr. The reason: the apps, by integrating the Flattr payment flow directly into the app, are violating Apple's App Store Guidelines, which state, in part, "The collection of donations must be done via a web site in Safari or an SMS."

The workaround proposed by Apple: the rejected app (Vemedio's Instacast) should launch Safari and direct users to a web-based donation form. Not ideal, but the rules are the rules apparently.

Many, of course, are suggesting that Apple's rejection of Instacast is really all about preventing third parties like Flattr from enabling publishers to circumvent Apple's in-app payment solution, which results in a 30% transaction fee for Apple. Frankly, they're probably right. Which is why, despite the support Flattr is receiving from various communities, we're unlikely to see Apple open the floodgates and allow every third party payment provider that wants to support payments in iOS apps to do so in a manner of their choosing.

So where does this leave companies like Flattr? With a big mobile headache. Not just because dealing with Apple can be a nauseating task, but because building great mobile experiences becomes an exercise in designing for rules, not people.