The 15th straight quarter of contract customer losses puts the carrier further behind AT&T and Verizon Wireless in the race to lock users into two-year commitments.

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The wireless company said on its Web site earlier today that the fee will go toward costs incurred by processing individual online or phone payments — in other words, actual customer service representatives handling telephone transactions.

Verizon did not immediately respond to a request for comment, or to an inquiry about how many of its customers currently pay their bills online or over the phone.

One fed-up user has already launched a fledgling petition drive aimed at getting Verizon to reverse course.

Sprint does not currently charge its customers to pay bills online, though it notes, as other wireless providers do, that if you pay through your bank, you could incur charges from that financial institution. AT&T also doesn’t charge customers for monthly online bill payments, nor does T-Mobile, though T-Mobile notes that certain types of accounts, such as T-Mobile Monthly4G (prepaid) and certain business and government accounts, aren’t eligible for paperless payment. T-Mobile customers are actually encouraged to make online payments, as they’re charged a $5 processing fee for payments made over the phone through a customer service representative.

(Image courtesy of EMay78/Flickr)

Entrepreneurs need to be reminded that it’s not the job of their customers to know what they don’t. In other words, your customers have a tough enough time doing their jobs.

– From Mark Cuban‘s 2011 book “How to Win at the Sport of Business: If I Can Do It, You Can Do It”

The daily deals giant cut back on marketing expenses and still showed it could make a profit in North America, plus it delivered on a number of other key metrics.

Marketing costs are the primary way Groupon gets subscribers to sign up for its email list that offers a deal every day and therefore is the lifeblood of its growth engine.

But it is also costly and unsustainable.

In today’s filing with the SEC, it showed it could continue to grow despite reducing its marketing expenses by 20.4 percent during the quarter in the U.S. alone.

Here are some key takeaways from the quarter as compared to the prior quarter on a worldwide basis:

• Revenues before the merchant’s cut: $1.16 billion vs. $929 million
• Subscribers: 142.9 million vs. 115.7 million
• Paying Customers: 29.5 million vs. 23 million
• Participating merchants: 78,649 vs. 78,466
• Groupons sold: 33 million vs. 32.5 million
• Average revenue per subscriber: $3.30 vs. $3.90
• Average revenue per Groupon sold: $13 vs. $12.1
• Groupons sold per paying customer since 2009: 4.2 vs. 4
• Total unique paying customers: 16 million vs. 12.1 million

Already, this year it has doubled its subscriber base to 115 million, up from 50.58 million at the end of December.

But has the daily deals company been good at getting people to buy?

For the first time, Groupon has provided some insight into that question as part of its second-quarter results released today in its amended S-1 filing, which also deemphasized a controversial accounting method that subtracted its marketing costs from the bottom line.

Here’s the deal:

• Groupon had 115.7 million subscribers at the end of June.
• Of those subscribers, only about 20 percent — or 23 million — have ever made a purchase. Those are called cumulative customers.
• The average subscriber (not customer) spent $18 in the first half of the year, down from $21 last year.
• The average customer over the lifetime of a membership has purchased four Groupons, up from three a year ago.
• The average revenue per Groupon sold in the first half of the year was $25, up from $23 in the same period 2010.
• The number of merchants Groupon worked with in the first half of 2011 increased to 135,247, up from only 12,468 in the first half of 2010.

Converting subscribers into customers will be key for Groupon in order to justify its high marketing costs.

But with only two and a half years of operating results, it’s difficult to ascertain if things are headed in the right direction. Not to mention that the averages easily get weighed down by the massive numbers of subscribers who are signing up.

For instance, the average revenue per subscriber fell by $3 year over year, which may sound bad, but at the same time, the number of subscribers skyrocketed by 1,007 percent.

It’s also hard to draw any conclusions about the number of subscribers Groupon has been able to convert into paying customers.

For example, as of the first half of the year, 20 percent of subscribers had ever paid for a Groupon, down from 22 percent for the first six months of 2010. For the full year 2010, the number was even lower, when only 17 percent of Groupon’s 50.6 million subscribers were considered paying customers.

Groupon just rolled out a promotion today that could get these numbers really moving by the end of the month. If a subscriber buys any two Groupons by August 31, the company will give him or her $10 to spend on an offer in the future.

A look at confidential training manuals, a recording of a store meeting and interviews with more than a dozen current and former employees reveal some of Apple’s store secrets. They include: intensive control of how employees interact with customers, scripted training for on-site tech support and consideration of every store detail down to the pre-loaded photos and music on demo devices.

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But it didn’t say how it would overcome technology barriers, such as finding a way for a smartphone to connect to the register without requiring a consumer to get a new phone with a near-field communication chip, or without making the retailer buy fancy new hardware.

Today, it announced an acquisition that may be one way it could solve this costly dilemma.

On the PayPal blog today, the company announced that PayPal has acquired Fig Card, which has developed a way for merchants to accept mobile payments by using a low-cost USB device that plugs into the cash register or point-of-sale terminal. Customers will have to install the Fig app on their smartphones.

“We loved their approach to point-of-sale, particularly because it was driven by the same vision that we have at PayPal–in the future, transactions can be as smart as a computer and not as dumb as paper. We won’t need our physical wallets. We’ll be able to pay any way we want, from any device, anywhere in the world with both flexibility and privacy,” said Peter Chu, PayPal Mobile’s senior director.

Fig Card was founded in early 2010 by Hasty Granbery and Max Metral, who will be joining the PayPal team. On the company’s Web site, it admits that the obvious challenge for the company is its small size, but that it was moving forward with trials among a handful of merchants in Boston’s south end.

Prior to founding Fig, Metral was co-founder and CTO of Firefly, which was bought by Microsoft. At Microsoft, he developed Microsoft Passport, one of the first single-sign-on systems. He then co-founded PeoplePC, where he met Granbery. PeoplePC was purchased by Earthlink.

If you spend any time with eBay at all, it’s clear that a lot of its emphasis is on PayPal. On Wednesday, it noted the division’s contribution to revenue growth in the first quarter and said in the first three months of the year, PayPal added one million accounts for the sixth quarter in a row. It now expects to achieve 100 million active accounts by the end of next quarter.

Additionally, PayPal was just shy of hitting its first billion-dollar quarter, and now represents 39 percent of the company’s overall revenues. To support its goals further, eBay recently acquired WHERE, a location-based mobile services and ad network.

While PayPal is one of the longest-standing online payment providers, it faces steep competition in the digital payment space from both incumbent providers and new entrants.

For instance, the Fig technology sounds similar to what Square is trying to accomplish by passing out dongles that can enable virtually any smartphone to accept payments. Square announced this week that it received an investment by Visa. Other giants like Google are getting into the space, and additionally, Facebook is becoming a big player in the space with the roll-out of Credits, a system used today to pay for virtual goods, digital items, and, increasingly, physical goods, like daily deals.

The Dallas telecommunications company said that customers who exceed a monthly limit of 150 gigabytes of data in three separate months will be charged $10 for every extra 50 gigabytes of data they consume. Customers on AT&T’s higher-end U-Verse Internet service have a limit of 250 gigabytes. AT&T will impose the new limits on May 2.

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Smartphone applications are quickly becoming an easy way to judge a product on the spot, and figure out when to walk away if it’s not exactly what you are looking for.

SearchReviews is launching an application today that provides input on the go, by aggregating more than 36 million customer reviews from more than 1,000 sites around the Web.

Reviews come from sites like TripAdvisor, eBay, Sephora, Wal-Mart, Amazon, Zappos and QVC.

Palo Alto, Calif.-based SearchReviews was founded in September by Ankesh Kumar, who has funded the start-up with $350,000 of his own money.

SearchReviews’ applications for the iPhone and Android are launching today.

Both of them work a lot like others in the market.

A consumer scans a product’s barcode, and then receives a list of results. Other apps in the market today from Amazon, Google and eBay are similar, but SearchReviews is hoping to stand out by having the most reviews. The other apps also tend to focus on price comparison.

SearchReviews may be one way to avoid buyer’s remorse, but to be sure, mobile applications like these are disrupting the way traditional retailers have done business for years. As we’ve written in the past, retailers used to be confident that they could close a sale as long as they could get shoppers into the store, and that’s where they focused all of their attention–on customer acquisition. Now consumers have the tools to decide to leave empty-handed.

Apple’s iPad success and the imminent release of new application distribution platforms from Google and other software companies threaten another seismic shift for publishers that may have far greater impact on their business models than the growth of free media on the web. Devices like the iPad offer consumers a rich reading experience and offer publishers even more targeted advertising, but the revenue tradeoff as publishers navigate the path from print to this new world is lopsided–and not in a good way.

While we all enjoy browsing publications at newsstands, over 90 percent of the circulation of U.S. magazines is delivered directly to consumers through the mail. The data and cross-marketing opportunities that these direct customer relationships provide to publishers is the fundamental underpinning of their business model.

Data informs advertising in magazines and allows for better targeting. It provides for the sale of ancillary products like books, videos and special issues. It allows multi-title publishers to solicit new readers across their enterprise. Even competitors agree to exchange lists because it benefits the industry by building more magazine readers from a pool of customers who already enjoy receiving their publications through subscription rather than by single copy purchase.

Without direct access to customers, publisher revenue will decline sharply and the publications that we depend on for in-depth reporting, news and entertainment will risk a final digital Armageddon.

Should we care? Why can’t the publishing industry just leave the world of messy ink and rural route delivery? Can’t it pivot to a less costly distribution model where customer ownership isn’t as critical?

Unfortunately, even if we assume that publishers retain their customers, there are extraordinary business challenges in transforming today’s print consumers into exclusively digital readers. And publishers can’t afford to relinquish their direct connection to readers without a more attractive economic model than the digital publishing world presents today.

Here’s why:

1. The Advertising Model Won’t Pay.

   Magazines are a wonderful advertising medium. Among the top fifty publications ranked by advertising revenues, each copy of paid circulation generates a pass-along audience that averages seven readers. Those seven readers factor heavily into advertising rates, and provide a significant revenue multiple to be weighed against the editorial, marketing, printing and distribution costs of delivering a copy to the consumer.

   What happens to this audience with a digital magazine? If a publisher wishes to be paid for its distribution, it will likely set entitlement requirements that discourage free circulation of its products. Even with integration of social networking tools to enable article sharing, publishers won’t generate more than 1.5 or two readers per copy. So the advertising revenue per circulation unit will fall due to the fact that fewer people see the ads. Even to remain constant, advertising effectiveness per copy would have to increase over four times to make up for the audience decline from seven to 1.5 readers per copy.

   Of course, most publishers believe these new digital magazines will have wonderful consumer engagement qualities that will result in a higher value being placed on their advertising. They believe digital ads will be better targeted and more efficient than print at delivering the right message to the right reader. But will that value be four times the value of print today? Not likely.

   Some argue publishers must cast their lot with free content and endeavor to survive with an exclusively ad driven model. But we need to remember the lessons of the web for most publishers. Even with the powerful reach the web provides, The Economist, The New York Times, The Wall Street Journal, Sports Illustrated and Vanity Fair would fail without the significant vote their consumers make every month by making a direct payment to the publisher.

   So editors and consumer marketers will bear a larger burden in this new mobile reading world. They’ll need to increase the revenue from consumers. And one could argue that this is a good thing, redressing the imbalance of an industry that has been too highly leveraged on advertising. But for the consumer stream to become more valuable, one of two things must happen: either the demand for magazines must rise, or the cost of distribution must fall.

2. A 30 percent Cut to the Store Isn’t a Great Deal.

   Isn’t selling your magazine through an app store and receiving 70 percent of the revenues a great deal? After all, magazine subscription agents and newsstands don’t return anywhere near that amount to publishers. But this is argument misses an important point. In iTunes and the Android Marketplace, there’s virtually no merchandising of magazine products. A magazine app must swim to the top of several hundred thousand other applications. And even in the context of a dedicated magazine store, the publisher won’t control featuring. The value of the brand must pull the consumer through to the purchase. And brands are expensive to build and nurture. So the publisher will continue to bear a high marketing cost to ensure enough sales for a stable level of circulation, just as they do today in the offline world. These marketing costs would certainly erase any advantage that a 70 percent cut would provide over the conventional agent model, particularly if the publisher cannot capture information on the customer and determine an effective ROI against their marketing expenditures.

3. Margin Must Come Before Marginal Cost.

   What about the fact that there is virtually zero distribution cost? Well despite the problems of the U.S. Postal Service, the cost of printing and distribution represents a relatively low percentage of publisher expenses–somewhere on the order of 20 to 25 percent today. Of course there are significant creative and technical costs in publishing a beautiful new magazine in tablet form. Just adapting to the variety of screen sizes, screen resolutions and operating systems requires significant new investments. These costs, together with the aforementioned ad revenue decline, more than eclipse the savings from eliminating paper and postage.

So where will this margin come from if not from the consumer?

Tablets provide publishers a wonderful opportunity to rethink their products and add more value. But no manner of reinvention will be possible if they can’t mine their customer relationships to merchandise these new products. If the relationship between the magazine publisher and customer is broken, the industry will end up like music and book publishers–removed from customers, wedded to old habits and powerless as digital delivery inevitably overtakes and diminishes the value of their physical distribution.

Lastly, let’s consider the argument from a consumer’s perspective. Nearly one out of every two Americans subscribes to a magazine today. Many will purchase iPads and other tablets over the next year. When they do, Apple and others suggest that 150 million consumers ignore their existing relationships with publishers.

In this battle over ownership consumers are the losers. They will not be able to direct publishers as they wish, choose to get both a print and digital version of the magazine, or move to digital only delivery. They won’t be afforded the opportunity to get a better value by bundling their print and digital delivery together. They won’t be able to align their print and digital purchases so that expirations synchronize and billing is simplified. They won’t be able to move their experience to the device that suits them–irrespective of the platform–and read on phones, laptops, tablets or anywhere they like. Nothing in the transition will remove friction or frustration. Is this an experience we will be proud of?

There will be a transition from print to digital delivery that publishers and software providers must manage for consumers, and not solely for the advantage of their business interests. A print magazine is informative, beautiful, portable and easy to navigate. It’s also inexpensive. There will certainly be a long period when consumers will wish to try out new forms of reading on tablets but not give up their trusted print brands.

Businesses that make these transitions easy for consumers will flourish. Consider the long path to electronic billing for the banking industry, the Netflix shift from DVDs to video streaming, or even Apple’s introduction of Macs that run Windows software. In each case, the transition strategy provided for significant long-term advantage. And most would agree that there’s a significant long-term advantage for the software industry to make friends with 150 million magazine consumers.

Here’s how they do it:

1. Allow the customer to buy access to print, digital or bundle both together with one-click convenience.
2. Create simple APIs that connect the handful of major print fulfillment houses to application storefronts so existing print accounts can be harmonized with digital access.
3. Provide for critical customer data to flow to publishers so they can refine their products and find new ways to merchandise them to consumers.
4. Build opportunities for publishers to cross-merchandise products from within their applications and utilize one-click checkout.
5. Don’t thwart retailers like Amazon and Barnes and Noble who have existing relationships with publishers. They know how to merchandize magazines and will be a positive force for competitive pricing and product development.

With these measures I think very few publishers would object to the 30 percent cut these stores wish to collect or have any significant concerns about the stores retaining the direct billing relationship with their customers. In the end, publishers would build more unique magazine products, sell more related products and encourage their consumers to buy more devices.

Of course, without such cooperation publishers will always have a choice where to play. Tablets are not made of stone and publishers are not called upon by a higher power to work with distribution platforms that are fundamentally destructive to their consumer relationships and business interests.

John Squires is a former EVP of Time Inc., and founder of Next Issue Media