Why Carrier Billing?
This is a question we are often asked at DIMOCO Payments, especially as there are many payment methods available on the market each offering access to a specific demographic, some are niche, while others are challenging the dominance of cards. But where does carrier billing stand? And why do we care?
Carrier Billing is by no means a new APM. It has been around since the 1990s. However, its reach and usability are growing, and consumers are embracing its convenience.
History of Carrier Billing
Carrier Billing has a long history, it has traditionally been used for the purchase of digital content, such as ringtones and text messaging services. Who can forget the list of numbers in the back of magazines? However, times have moved on. As phones have become our main entry point to the digital world, our reliance on them has grown exponentially.
Today, thanks to the agent model, carrier billing can be used for almost anything. At DIMOCO Payments, we are seeing a growing trend for mobility services, such as bike rentals and EV charging as well as entertainment services such as audio books and streaming services.
What is Carrier Billing?
Carrier billing is the truest form of mobile payment. It allows mobile phone owners to purchase goods and services and charge those costs to their mobile phone bill.
What are the benefits of Carrier Billing?
Growth Potential – Merchants who are looking to grow in new markets or accept cross-border payments can benefit from a single connection to the Mobile Network Operators. It is also a payment method with an unprecedented reach. As smartphone penetration continues to grow, it is the perfect pocket payment method.
Security – Carrier Billing allows for frictionless payment experience and does not require the entry of personal information. The transaction is completed by entering the mobile phone number and confirming the payment. This lowers the risk of fraud and provides a layer of anonymity that can be appealing to those who do not wish to share personal information online.
Higher conversion rates – Compared to other payment methods, carrier billing is easy to use and fast. Whereas with traditional payment methods, users may abandon their cart if they encounter any difficulties during the payment process. This can be due to a variety of factors, such as complicated checkout procedures or concerns about security.
Increase customer loyalty – By providing an easy-to-use payment method that is integrated with the user’s mobile phone bill, you can increase customer loyalty and reduce churn. This can be especially important in an industry where customer retention is a key factor in generating revenue.
Use Cases
Carrier Billing can be used for digital content and ticketing, however, with the agent model, its potential is significantly expanded.
With our work in Germany and Zahl einfach per Handyrechnung, we have a variety of EV charging merchants. Here we can see that carrier billing is the most popular payment method for ad hoc charging. This is due to its simplicity. With just one click, motorists can charge their vehicles at stations. It is the perfect “guest checkout” payment solution,
In Poland, we worked with STS, the largest provider of sports betting, to provide carrier billing services to its customers. The payment method is an easy way for new players to make casual bets. During the Euros, we saw an increase of 13 percent in the month of June.
What are the regulatory requirements?
Within the EU, carrier billing is restricted to a certain spend. For example, users cannot spend more than 50 euros per transaction, and there is a monthly limit of 300. This is put in place as Mobile Network Operators cover the cost of the payment and will cover any bad debt. There is also the restriction of what it can be used to purchase. However, under the agent model, there is more flexibility and mobile network operators can choose to increase the restrictions.
What is the Agent model?
The agent model authorizes mobile network operators (MNOs) to act as payment agents on behalf of licensed payment service providers. We have done this successfully with MNOs across Europe and merchants from EV charging to iGaming.
Again, why carrier billing?
At DIMOCO, we see it as the perfect alternative payment method. Its reach and simplicity mean it is a great way to increase impulsive purchases and reduce shop-cart abandonment. The transparent fee structure enables merchants to know exactly where they stand. If you would like to find out if carrier billing would work for your business. Get in touch today.
