IMVU Inc., an avatar-based social network and virtual world where people meet and interact in 3D, is letting its members pay for virtual goods using their handsets.

The company tapped mobile payments specialist Zong for the platform. IMVU makes most of its revenue from the sale of virtual currency to its members, who use that currency to buy virtual goods ranging from clothing for their avatars to furniture for their rooms.

“IMVU has a large audience of more than 6 million monthly visitors from all over the world,” said Cary Rosenzweig, CEO of IMVU, Palo Alto, CA. “IMVU needs to offer these users convenient ways to purchase its virtual currency.

“Zong provides a mobile payment solution that enables IMVU to cost-effectively accept mobile payments from its users in a variety of countries,” he said. “Zong also enables IMVU to accept payments without the headache of managing multiple carrier relationships on our own.

“Zong has a wider distribution and greater ease of implementation compared to the previous payments platform we used.”

Since launching in 2004, IMVU has grown into one of the largest of the virtual world communities, with more than 40 million registered users, 6 million unique visitors per month and a $25 million revenue run rate.

The company offers its users a 3D environment where they can customize their avatars and rooms, and meet and interact with other people from around the world.

IMVU claims that its catalog of virtual goods is the largest in the world, with more than 3 million items created by IMVU members. More than 35,000 developers have sold an item on IMVU in the last month.

The social network’s audience is 69 percent female and 58 percent 18 and older, with 62 percent from the United States.

While the IMVU platform is currently not available on any mobile platforms, users can now pay for virtual credits using their mobile phones via Zong. Allowing access to the virtual world via mobile phones is something that IMVU plans to offer in the future.

Problems
IMVU offers its users a variety of methods for buying credits in order to maximize its conversion rates.

In 2006, IMVU discovered strong demand from customers wanting to pay by mobile phone. The company learned that a sizable portion of its user base did not have credit cards, but wanted to spend money.

Given that most of its users have mobile phones, IMVU was able to make a sound business case for mobile payments.

IMVU invested resources to develop and certify mobile payment applications in 18 countries using multiple mobile aggregators. The company wrote software and did modifications to meet carrier certifications requirements.

IMVU also performed all tier-one customer service as required by wireless carrier. However, IMVU found it challenging and overly time-consuming to build and manage a mobile payments platform in-house, especially with wireless regulatory frameworks and procedures that are complex, dynamic and tedious.

Dealing with carrier certifications and audits required IMVU to shift resources away from its core competencies and mission of providing a compelling 3D experience for its users and managing a fast-growing user-generated virtual goods business.

On top of handling billing matters such as failed transactions and refund issues across the 18 countries all over the world, IMVU had to perform customer support in the native languages spoken in those countries.

Given the company’s aggressive growth plans in international markets, IMVU expected even more carrier certifications and more regulatory frameworks, none of which added value to the 3D experience IMVU provides.

Solution
After discovering demand for mobile payments and dealing with managing its complex in-house mobile payments platform, IMVU decided to partner with a specialized mobile payment provider to hopefully reduce costs, increase payment conversion rates and ultimately yield more revenue.

Having built and managed its own mobile payment service, IMVU knew what to look for when evaluating mobile payments partners.

IMVU chose Zong because the company has direct connections with wireless carriers. Having worked with mobile aggregators all over the world, IMVU was well aware of the challenges associated with conducting a mobile payment transaction through technology platforms that were built to deliver ringtones and wallpapers.

Because Zong specializes in mobile payments and has experience dealing with consumers and carriers all over the world, it has developed the simplest user experience to complete a payment. This, along with localized content in multiple languages, is critical for maximizing payment conversion rates.

Zong has close to 100 percent carrier coverage in every country it operates, further maximizing payment conversion rates.

Zong offers tier-one customer support over toll-free hotlines and email in seven languages.

Zong has an in-house carrier-compliance team that stays on top of the ever-changing wireless carrier rules and regulations in each country.

Results
After 60 days in production, the Zong platform was generating 50 percent more revenue than IMVU’s previous in-house platform. An increase in payment conversion rates and a larger footprint of nations and carriers drive this revenue lift, according to Zong.

The UI integration into the IMVU Credits purchase portal provides customers with a mobile payments experience, letting their charges appear on their mobile-phone bill instead of having to

Customers can buy virtual currency from IMVUs dollar store using their mobile phone. Once they purchase that currency, IMVU users can browse more than 3 million items in the virtual goods catalog.

The majority of items, which include everything from clothing and accessories to furniture and other items for their private rooms, are created by IMVUs community of developers.

“The number of items in the IMVU catalog grows by more than 100,000 items per month, so there is always something new for IMVU members to choose from,” Mr. Rosenzweig said. “The majority of IMVUs revenue comes from the sale of virtual currency.

“However, IMVU recently introduced a new advertising sales and sponsorship group that will help major brands reach IMVU’s audience of more than six million monthly unique visitors,” he said.

“In creating this new business line, the company signed a partnership with Alloy Media + Marketing and hired Danny Wright as head of sales to manage the sales and sponsorship group.”