Android Users (and Devs) Get a Lift from AT&T

Paying for Android (s goog) apps is easier for AT&T (s t) users as the operator is adding carrier billing for its Android device owners. Users who find an app they like in Android Market will have the option of having the software purchase tacked on to their monthly bill, rather than go through Google Checkout. The update brings a much needed payment alternative to Android Market and hopefully points the way to carrier billing support from all carriers soon.

Right now, a lot of people don’t buy apps from Android Market because they’re limited to Google Checkout. Besides being flaky for some users, Google Checkout requires new users to enter in their credit card information. It’s a step that turns people off and has been hurting paid downloads on Android Market compared to iTunes, where many users already have their credit card on file with Apple (s aapl).

What people really want is to just add purchases to their carrier bill. A new Strategy Analytics survey found that 38 percent of consumers prefer carrier billing more than pre-registered accounts like iTunes and PayPal (s ebay), which are tied for 31 percent. Credit or debit card entry is favored by 22 percent of users.

This is important for Android and its ecosystem of developers. Options like PayPal are also welcome but the easiest thing to do for a consumer is just tack it on to their bill. T-Mobile has previously supported this and Sprint (s s) announced last year that it would, though it hasn’t followed through. Verizon Wireless (s vz) supports carrier billing for app downloads in its VCast App store but there’s no word when it will be come to Android Market. Google’s Eric Chu said Google will continue to partner with more carriers on carrier billing so hopefully we’ll see Sprint (s s) and Verizon at some point soon.

Overall, it’s another sign that Google is making significant efforts to address some of the problems in Android Market. Recently, Google overhauled the look of the Android Market, making it easier for people to browse content using more categories and additional tools such as finding related apps. For developers, Google has upped the size of apps to 50MB, reduced the refund window to 15 minutes and earlier this year, opened up sales overseas to more countries. There’s still more to be done. I’ve asked about that promised online Android Market storefront. But gradually, Google is getting the picture. Android developers need to be able to make money and giving them tools to do that will help the entire ecosystem flourish. Mobile ads and in-app purchases are important monetization pieces but paid downloads are key for many developers looking for a return on their work. Expanded carrier billing could be an essential piece in helping Android developers close the revenue gap on their iOS counterparts.

Related research from GigaOM Pro (subscription req’d):