Android developers with apps in the Amazon Appstore can now charge more than $20 for in-app purchases, reports TechCrunch.

The update, which brings the Amazon Appstore in line with Apple’s App Store and Google’s official Google Play service, was rolled out after Amazon updated its Appstore’s parental controls. According to Amazon’s developer FAQ, customers can change the settings on their devices to require either their Amazon.com password or a four digit PIN in order to complete in-app purchases.

Tying the increase in the value of in-app purchases to an update in parental controls is a smart move for Amazon, considering the troubles Apple has seen in the same area. Last year a Pennsylvanian father filed suit against Apple in a Northern California district court, alleging the company’s in-app purchase policies were exploitative. Although in-app purchases can now be disabled entirely in an iOS device’s settings menu, Apple was unsuccessful at getting the case dismissed; on April 16, the district judge ruled the hearing will still go ahead, despite Apple’s policy changes.

For Amazon developers an increased in-app purchase limit is welcome news. Although the Amazon Appstore already delivers comparable revenues per average user to iOS, according to a report mobile analytics firm Flurry released last year, in-app purchases over $50 make up a third of the revenues developers generate from free-to-play titles. With Amazon developers now able to offer high-priced in-app transactions like they can on iOS, it will be interesting to see if the Amazon Appstore’s average revenue per user will rise to match, or even surpass Apple’s.

Amazon is finally taking control of in-app purchases in its Amazon Appstore for Android.

According to a report from Bloomberg, the online retailer is currently testing its own in-app payment system. The new system will support both one-time transactions and subscriptions. Amazon’s commission will be 30 percent, the same rate Apple and Google charge in the iTunes App Store and Google Play.

The Amazon Appstore already supports in-app purchases, but doesn’t have restrictions around in-app payment systems, which leaves developers free to choose their own payment systems and providers.

It’s not surprising to see Amazon rolling out an official in-app payment system for its Appstore. According to Distimo’s latest figures, the majority of top grossing apps on both iOS and Android now monetize with in-app purchases. Amazon rival Apple, which has always taken a cut of transactions made through its iTunes App Store, has already earned more than $1.7 billion from its 30 percent share of mobile app revenues.

The Amazon Appstore has already proven successful at delivering revenues to developers via in-app purchases. Last week Flurry reported for every dollar earned through in-app purchases on iOS, the Amazon Appstore delivers $0.89. With the success of the Kindle Fire, its also likely the Amazon Appstore market is now large enough to make developing an in-app payment system worthwhile. After the debut of the tablet in November, app downloads in the Amazon Appstore were 14 times higher than they had been pre-launch. Glu Mobile also reported its Amazon revenues had increased by more than 1,000 percent after the device launched.

It seems as the Amazon Appstore starts to look more like a viable alternative to Google Play, Amazon isn’t risking leaving revenue on the table. Although a 30 percent commission fee doesn’t make the Amazon Appstore a better deal up-front for developers, the store’s ability to deliver revenues through in-app purchases will still make it attractive to Android developers.

Just how much money are virtual currency “black card” scams costing Chinese iOS developers? The Chinese Anti-Black Card Alliance has stopped more than $1.5 million USD in fraudulent transactions in just six months.

Black card scams, so named because they use fake or stolen credit card numbers, operate mainly on Taobao — China’s eBay equivalent. Sellers on the site offer virtual currency at a steep discount, often 50 percent off the actual value. The currency is bought on iTunes accounts attached to fake or stolen credit card numbers from outside China, and then transferred to the buyer’s game.

These scams are the reason it’s increasingly common to see Chinese apps with no English language support on the upper reaches of the U.S. top grossing apps charts. Once Apple filters out fraudulent payments from a developer’s earnings, as much as 50 percent of a company’s revenues can vanish. Beijing-based Hoolai lost over $300,000 in one month alone due to the scams.

This is why CocoaChina, also known as Chukong/PunchBox, created the Anti-Black Card alliance last October. Made up of some of the biggest developers in China, the group’s member 14 companies include the likes of Kongzhong, Haypi, WiStone and Gameloft’s Chinese studios. The group employs a full-time employee just to monitor Taobao for fraudulent listings connected to games from the Alliance’s member companies and any apps published by CocoaChina. Since starting the program, the Alliance has issued more than 1,000 takedown requests, which has translated into Taobao removing over 30,000 listings.

With the sheer number of fraudulent listings, it’s hard to measure the true financial impact, but according to Lei Zhang, the U.S. general manager of CocoaChina/Chukong. Most listings were for the highest tier of in-app purchase, with average costs ranging from $49.99 to $99.99 each. At 30,000 listings, one can conservatively estimate the anti-black card alliance has shut down more than $1.5 million in fraudulent transactions.

Although the are time and resource intensive, the Alliance’s efforts are paying off. Members have seen their fraudulent transactions drop by 80 to 90 percent and one game even saw a 30 percent revenue increase after the alliance began. While Zhang couldn’t disclose the title of that game due to Apple’s restrictions, he did tell us the game has gone from earning about $38,500 a month to $50,000 a month.

The alliance also now has a special relationship with Taobao. Although the company’s standard policy is to remove fraudulent listings 15 days after a complaint in order to assess the claim, Taobao now removes any listings reported by the Alliance within 24 hours.

“This is a problem that involves loopholes of the entire ecosystem, beginning from the relatively easy access to fraudulent credit cards,” explains Zhang. “It’s not fair to portray Taobao as one of the main causes of this issue or even part of the scheme, they are in fact an active and important part of the solution.”

While Taobao may have the ignoble honor of being the most popular place for black card scams, it’s also not the only destination for fraudulent players. According to Zhang, Tencent’s Paipai.com (a Taobao competitor) also has similar listings, and there are still plenty of black card scams conducted off the easily monitored e-commerce sites.

All this means Chinese developers may still be losing millions of dollars in revenue every year, all while they’re still on the hook for the server and hosting costs of the fraudulent players. An article on the CocoaChina website states that some Chinese developers have reported more than 88 percent of their revenues turned out to be bad debts related to the scams. According to Zhang, the only way to truly stop the black card scams is an absolute crackdown — which is of course, easier said than done.

Because Apple doesn’t share detailed user payment information with developers, it’s extremely difficult to sort out legitimate users from fakes. Hoolai, which saw its game 胡莱三国 (Hoolai Three Kingdom) hit No. 10 on the U.S. top grossing app charts at the end of February, has tried to build algorithms to identify what it calls “strange payments,” but it largely comes down to guesswork.

Still, the best approach may be harsh penalties, even if developers aren’t able apply them universally. “Game operators need to clearly convey a message of zero-tolerance for fraud payment to players,” says Zhang. “This is especially important for MMOs and other high lifetime value games. [They need to decline] features or content to fraudulent players.”

For in-app purchases on a per-user basis, Google Play is now the least lucrative mobile app market behind both the iTunes store and Amazon’s Appstore.

According to the latest report from mobile analytics company Flurry, for every dollar of in-app purchase revenue the average user generates on iOS, the same app will see $0.89 in the Amazon Appstore and just $0.23 in Google Play.

To come up with these figures, Flurry measured the average in-app purchase revenue by user in a series of apps popular on iOS, Android and Amazon app stores over a 45 day period. As the study excluded both up-front app purchases and advertising revenue, it’s unwise to take Flurry’s numbers as a perfect breakdown of revenue per platform.

Overall a top grossing iOS app can earn between $2 and $3 million a month on iOS and about $1 million a month on Android. It’s not yet known what a top grossing app on the Amazon Appstore makes, but the figure is likely lower because of the Appstore’s much smaller userbase.

It’s also important to note that overall, in-app purchases are less important on Android. Earlier this week, Distimo reported 80 percent of the top 200 grossing iPhone apps used in-app purchases, but only 56 percent of the top 200 grossing Android apps did.

However, Flurry’s study does help explain why Crowdstar — developer of the free-to-play game Top Girl — reported its average revenue per user in the Amazon Appstore was five times higher than in Google’s official Android market.

As we have said previously, the key issue with monetization on Android hinges around developing a userbase that is ready to pay. iOS and Amazon users not only have accounts set up with payment information, they’re used to purchasing things from Apple and Amazon. Android users, on the other hand don’t often have their payment information on file, something that google is trying to remedy through discounted app promotions.

The lack of progress Google Play is showing — in December, Flurry reported Android apps earned $0.24 cents for every dollar spent through in-app purchases on iOS — only demonstrates the scale of the problem Google is trying to tackle.

[Update: Please note that on April 15, Flurry updated this report to clarify it was comparing app revenue per active user, not overall revenue. Inside Mobile Apps has updated our story to reflect these changes.]

Now that Facebook finally unveiled carrier-powered payments for the mobile web yesterday, it’s time to look at what the potential costs might be. Last month, U.K.-based mobile billing and analytics provider Bango announced to shareholders that it had a new partnership with Facebook, but that it couldn’t disclose the terms. Bango powers billing for app stores and also has a deal with Amazon.

Here are Bango’s standard payout rates for the carrier partners Facebook mentioned yesterday. (Important note: These are not Facebook’s actual rates. These are Bango’s standard rates. It is likely that because of Facebook’s clout and scale, the company wrests slightly more favorable terms. Bango’s chief executive Ray Anderson actually gives some color in the comments below. But this should give you an idea of how expensive the carrier’s cut is for Facebook.)

Bango’s standard carrier payout rates:

AT&T – 60%
Deutsche Telekom – Unknown, because Deutsche is not a Bango partner.
Orange – 83%
Telefónica – 55%
T-Mobile USA – 57.5%
Verizon – Unknown, because Verizon is not a Bango partner. is only available to Bango’s strategic partners.
Vodafone – 79.2%
KDDI – Unknown, because KDDI is not a Bango partner.
SOFTBANK MOBILE Corp. – Unknown, because Softbank is not a Bango partner.

Since Facebook pays out a 70 percent revenue share to developers, any time a carrier remits less than 70 percent, Facebook is taking a loss on facilitating these transactions. When you factor in the research and development costs of building the mobile platform, it’s almost certain the company will be losing money on this area of the platform for some time.

Update: Bango’s chief executive Anderson gives some helpful context in the comments below. He says that special partners often have better rates. He says that Blackberry-maker Research in Motion uses Bango to power its Blackberry AppWorld and gets 70 percent back from AT&T. That’s better than the normal 60 percent rate listed above. But even if Facebook got 70 percent back from AT&T, it would still mean that the company is taking a loss on these transactions since it pays all of that back to the developer and must still invest in R&D and maintenance for the platform.

Now to anyone in the mobile industry, this really shouldn’t be a surprise. Terms for carrier billing have always been onerous. After losing so much of their power to Apple and Google over the last five years, carriers are maintaining a steadfast grip onto mobile payments — one of their last and most potentially lucrative revenue streams that distinguishes them from being “dumb pipes.”  It’s hard to see them giving up revenue share or additional control to Facebook even if it means a better user experience and greater transaction volume.

Facebook has dealt with this in the past as it’s been possible to pay through carriers for Credits on canvas games through the Zong partnership. Google is also in a similar position when it comes to in-app payments on Android via carrier billing.

Facebook users can still pay for Credits by directly entering their credit card information into a web form, thereby keeping the 30 percent revenue share. But that’s often not the best user experience since there are many friction points as people have to go through a multi-step process when entering their credit card numbers. What Facebook announced yesterday is more seamless. In a one-step process, consumers can click to pay with Credits on mobile web apps and have those charges delivered to their monthly phone bills.

But the complexity of setting up a decent mobile payments infrastructure underscores a risk Facebook mentioned in its IPO filing. Facebook acknowledged that increased usage of the company’s mobile products may undermine its financial performance.

The company said in its filing at the beginning of the month:

“We do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven. Accordingly, if users continue to increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, our revenue and financial results may be negatively affected.”

One way that Facebook could make up for these losses is in mobile advertising, which the company just unveiled in a New York-based marketing conference today.

Facebook has partnered with some of the world’s largest carriers to make the experience of paying with Credits more seamless on the mobile web.

The company has done a deal with AT&T, Deutsche Telekom, Orange, Telefónica, T-Mobile USA, Verizon, Vodafone, KDDI and Japan’s Softbank Mobile Corp to let Facebook users pay more seamlessly with Credits through carrier billing. The deal comes at a critical time for Facebook as Apple’s iOS and Google’s Android platforms threaten to cut the social network out of influencing and earning revenue from the mobile app ecosystem.

Facebook’s chief technology officer Bret Taylor said that the current system for making web-based payments has too many friction points to make it useful to consumers or developers.

“Right now, the payments experience on the web is just broken for end users,” he said in a keynote at Mobile World Congress in Barcelona. “Even with operator billing support, most require a step called SMS device verification. That means if I’m in the middle of the game and I want to pay 99 cents, I have to wait for an SMS to arrive.”

After that, the user has to verify that the device is connected to their Facebook account.

“Then I have to awkwardly memorize the code and resubmit the transactions,” he said. “If I manage to make it this far, then I can finally go back to playing the game.”

With the new solution, third-party developers will be able to integrate a single SDK that lets their players charge their monthly phone bills in a single step through Facebook.

Having a fluid payments flow could go a long way in convincing developers to spend as much time on their HTML5 apps as they do on their native ones. To make HTML5 viable for mobile developers, Taylor said Facebook needed to focus on three problems: 1) discovery 2) fragmentation and 3) payments.

Facebook is addressing discovery with new viral channels for mobile apps that it launched last fall. On the second problem, Facebook also announced an industrywide group today that will push mobile web standards forward in concert with the W3C, or World Wide Web Consortium.

The payments agreements address the third problem. The only thing that seems certain about this new arrangement is that Facebook must be paying a lot — if not nearly all — of its 30 percent revenue share to carriers in this deal. Google knows this situation well, as it had the same hurdles in negotiating revenue share for carrier billing on Android.

The other problem that Facebook is confronting is that it likely only has a tiny percentage of users that are sharing payments information with it. Apple has more than 250 million iTunes accounts with billing information attached to them. In contrast, I would bet that Facebook has payments information or credit card data on around 30 million users or less, considering that around half of its 845 million monthly actives play games, and then 2 to 6 percent of those monetize through virtual currency purchases. The platform’s biggest developer Zynga saw only 2.9 million of its 153 million monthly unique users pay for virtual currency last quarter. So Facebook is likely facing the same uphill battle Google has been dealing with in convincing more users to pay on its Android platform.

On average, every app downloaded from the iOS store generates about $0.23 in revenue, argues Apple analyst Horace Dediu of Asymco. That means that as Apple is set to pass its 25 billionth app download, every one of the 335 million iOS devices sold has generated about $12 dollars in revenue for developers in the ecosystem.

Dediu bases his analysis on two well-known figures — first, Apple has paid developers $4 billion over the lifetime of its store, and second, the fact that Apple is just days away from its 25 billionth app download.

According to Dediu’s math, if the app store has paid out $4 billion to developers, it has earned $5.7 billion in gross revenues because Apple keeps an additional 30 percent cut of revenue. That means if you divide the App Store’s total revenue by the number of downloads, it each app has created about $0.23 in gross revenue and about $0.16 cents for developers after Apple’s 30 percent cut.

While those figures may be fairly loose estimates, they do roughly align with Apple’s most recent payout figures. In the fourth quarter Apple paid $700 million to developers, meaning the store likely earned around $1 billion in gross revenues.

Dediu assumes Apple has sold 335 million total iOS devices to date after the company reported it had sold more than 315 million devices in total in its fourth quarter earnings call on Jan. 24. That means that between the 25 billion apps downloaded, each device has generated 75 downloads on average. Multiplying $0.23 by 75 indicates that every iOS device sold has created $17 in gross app revenue and developers have taken home $12 of that.

Dream Heights, Zynga’s newest mobile game, has made plenty of pre-launch headlines in the last month given its similarities to NimbleBit’s Tiny Tower. Inside Mobile Apps takes an exclusive hands-on tour of the version that arrives in the U.S. App Store tomorrow.

We’ve covered cloning at length on both Inside Mobile Apps and our sister site Inside Social Games. The purpose of this article isn’t to rehash the cloning debate. Rather, we present to you the differences between the two games — and leave the rest to your own judgement.

Both games are “tower” titles where the player is tasked with building individual floors of a skyscraper, designating some as commercial spaces and some as residential spaces. As virtual residents move into the tower, the player must staff the commercial spaces, trying to balance each resident’s natural skills to the skills needed to run specific storefronts. The storefronts go on to earn the player virtual currency, which is primarily spent on building more floors. That’s what’s the same about Dream Heights and Tiny Tower.

Here are the subtle and not-so-subtle differences:

Presentation: Dream Heights goes for a cartoonish, 3D look that’s intended to appeal to a mass market. The game puts players in the role of a customizable avatar that hangs out in the lower level of the tower. Players are encouraged to build more floors to their tower by a set of visual landmarks like the Big Ben that they try to “outgrow.” In contrast, Tiny Tower uses an 8-bit art style that appeals to retro video game fans and progress is encouraged mostly by running out of jobs to offer residents or not having enough residents to fully staff all stores.

Social features: All Zynga games incorporate the company’s massive userbase through social interactions very early on in the game experience. This takes place in Dream Heights with a “Sky Bridge” floor the player constructs during the tutorial. This floor connects the player’s tower to other Dream Heights players in a visual way. The player avatar is seen walking along the Sky Bridge to a series of storefronts connected by the floor, each represented by one of the player’s friends.

Visiting a friend’s store nets the player special items that can be brought back to their own tower and traded in for virtual currency. Friends’ avatars will also visit the player’s tower, looking for specific items in different stores. Selling a friend character these items nets the player a currency bonus. Tiny Tower’s social features are currently limited to seeing friends’ towers via Game Center.

Currency System: Like in its other “Dream” games, Zynga uses three types of currency in Dream Heights: coins, cash and reputation. Coins are the “grind” currency players earn through normal gameplay and spend on main game objectives like building more floors. Cash is the premium currency players are expected to buy via in-app purchases. They can spent on speeding up floor construction or item stocking in stores. Reputation, or hearts, comes from visiting friends. This currency unlocks special items to stock in stores. Tiny Tower, meanwhile, uses only two types of currency and can earn them both through normal gameplay activity.

Quests: Aside from the friend shopping feature mentioned above, Dream Heights doesn’t offer quests. Tiny Tower sometimes asks the player to locate a specific resident on a floor to complete a quest and carries a list of Missions the player can complete to earn currency.

Manual Collection: Dream Heights currently requires players to enter the game and click on a store to obtain all the money earned from selling goods in the store’s inventory. Tiny Tower automatically harvests this money even while the player isn’t in-game.

Pace: Dream Heights moves more slowly than Tiny Tower. It takes longer to earn enough currency to build floors and the manual collection element means the player spends longer scrolling up and down floors looking for places to collect currency.

Amazon’s Kindle Fire is running even with Samsung’s Galaxy Tab in terms of app sessions, according to mobile analytics company Flurry. The results underscore much of the evidence we’ve seen thus far that the tablet market is becoming bifurcated between Google’s official Android Market and Amazon’s upstart appstore.

“Remarkably, and from a standing start, the Kindle Fire overtook the Galaxy Tab in just a few short months,” wrote Flurry’s vice president of marketing Peter Farago. The Fire recently overtook the Tab in app sessions with a 35.7 percent share to Samsung’s 35.6 percent share. With Amazon capturing this much momentum over the holidays, it would be easy to see them eating up more market share going into the first quarter. That said, there’s still a rising tide with overall Android tablet sessions tripling from November.

Flurry didn’t reveal exact device counts for either the Fire or the Tab. Farago told us, “We made the decision to avoid releasing hardware numbers. We let the big boys release their own,” referring to the time the company famously angered Apple by revealing early stats on the then-unlaunched iPad.

Secondly, Amazon seems to also be better at supporting paid downloads than Google’s Android Market. Flurry looked at five paid apps that ranked in the top 10 over the past month. The Fire was able to push 2.5 times as many downloads to this sample of five paid apps compared to the Galaxy Tab. Android Market has had problems with paid downloads for more than a year because Google doesn’t have as much readily available credit card information on its own users. 

“This shows that for tablets, the Amazon App Store can already deliver more direct revenue to developers than the Android Market,” Farago said. “Even more impressive is that the Galaxy Tab, launched in November 2010, has a much larger existing installed base than the newly launched Kindle Fire.” Flurry believes there are twice as many Galaxy Tabs in circulation as the Kindle Fire.

Flurry says there are a handful of reasons why Amazon might be performing better on driving paid downloads:

1. Amazon gets content. It signed deals with Rovio and Facebook to have apps ready to go from the beginning.
2. It has payments data on millions of consumers already and isn’t starting from a small base like Google must. “Upon launching the Kindle Fire, consumers must either link to their Amazon account or enter credit card information,” Farago writes. “This makes the user base 100 percent payment enabled.”
3. Amazon is also willing to take low or no profits on device sales for market share. It’s ”the ultimate razor-razorblade model, where the “stalk” (tablets) is given away for as little as possible and profits are made from the sale of razors (content).”

We’re also hearing that Amazon is performing better on an ARPU (average revenue per user) basis for freemium apps than Android Market. Crowdstar chief executive Peter Relan told us last month that Amazon’s user monetize four to five times better than ones from Android Market.

What this means for developers is that if they want to be a part of the Android tablet market, they now have to take Amazon seriously. A year ago, this wasn’t the case and we saw many developers just go for deals with Amazon for cheap or free distribution.

Now that Amazon has a footprint and may even eventually get into smartphones, they’re now a must-have for serious Android developers.

App tracking company Distimo has released a comprehensive report detailing exactly what effects developers can expect to see from the two of the most important app sales techniques — features and sales.

Surprisingly, the company’s results suggest features and sales are actually far more beneficial to apps on the Android market than they are to iOS apps. Overall Distimo found Android apps saw more chart traction and higher revenues during a sale than iPad or iPhone apps.

To determine the average effects of an app market feature, Distimo looked how being featured in the New and Noteworthy and Staff Favorites sections in Apple’s App Store and the Staff Picks category in the Android Market would affect the 100 most popular apps in their respective categories between October and December 2011.

Unsurprisingly, Distimo found an app featured either the App Store or the Android market would usually see a significant increase in chart ranking. However, a feature was not always beneficial.  According to Distimo’s findings, 15 percent of iPad apps and 39 percent of iPhone apps would show either no gain, or would actually lose in rankings in the first three days after being featured. By comparison in the Android market only six percent of apps would show no gain or lose rankings after a feature.

After a full seven days of being featured, Distimo found that the average Android app would have gained 65 places on its category chart, an iPad app would have gained 28 and an iPhone app 15.

While it’s important to take into account the progressive difficulty of gaining ranks as an app becomes more popular — it takes many more downloads to move from the No. 10 to No. 5 position on a chart than it does to move from No. 50. to No. 45 — Distimo found that overall, iPad apps tended to see the biggest gains. The average featured iPad app would see its rank increase by 252 percent, almost double the average iPhone app rank increase of 137 percent. The average Android app would see its rank increase by 172 percent.

Overall Distimo found features actually appear to be better sales tools for Android apps in both the short and long term. Checking back five days after an app feature ended, iPad apps still showed gains of 145 percent and iPhone apps showed gains of 75 percent, but Android apps showed gains of 828 percent. While Distimo acknowledges that the lingering effects are likely magnified by the differences between each platform’s ranking algorithms, overall, apps featured in the Android market gained more ranks, saw a greater benefit and noticed longer lasting effects than an app featured in the App Store.

Surprisingly, Distimo also found that sales were also more beneficial to Android apps than they were to iOS apps. While the effect of a sale was far more dramatic initially on iOS, after 15 days the numbers had shifted in favor of Android.

According to Distimo, the average iPad app increased revenue by 19 percent during a sale, an iPhone app saw average revenue increase by 22 percent and and Android app would see a gain of 29 percent.  Android apps were also less likely to lose money on a sale. 31 percent of iPad apps and 23 percent of iPhone would actually see revenue decrease by more than 20 percent during a sale, but only 18 percent of Android apps posted the same loss.

As for sale pricing, Distimo found the most effective tactic was to cut the price of a paid app by at least half, and ideally to either $0.99 or $1.99. Despite incurring a steeper drop in revenues, apps discounted by 80 percent were more likely to increase or maintain revenues during a sale than apps only discounted by 40 percent.