Home References The Contribution of Carrier Billing towards the App Economy

Direct carrier billing (DCB) or operator billing allows billings to take place directly on the customer’s mobile phone bill. It has allowed telecom operators to leverage their existing relationships with customers in order to offer a convenient one-click payment experience.  One-click payment obtains double confirmation from the consumer, thereby avoiding security concerns related to card usage.

The growing demand for digital content and carrier billing integration

Despite the rapid proliferation of smartphones globally, a large part of the global population still remains unbanked. To tackle this challenge, enterprises have begun offering robust mobile applications that support direct carrier billing (DCB). This medium is poised to emerge as a significant medium to make micro-payments for music, paid applications as well as in-application purchases.

Meanwhile, digital enterprises have recognized the potential of this medium and have thus begun to partner with the telecommunication companies in various markets. Their approach is simple-connect customers with the smartphone applications most in demand.

How does direct carrier billing work?

DCB deploys a two-factor authentication. The customer enters their contact number and receives a one-time password via an SMS to provide a full set of credentials.

When a developer submits an enquiry, they are given access to the operator’s carrier billing SDK. Then the API provides the developers access in order to allow them to integrate their application to a user mobile subscriber integrated services digital network number (MSISDN). This enables the developer’s application to identify the MSISDN and ensure customer identification and billing for adequate digital content consumptions. Then the telecom operator collects the fee on behalf of the developer or merchant from the consumer via direct carrier billing’s one-click payment with a layer of security confirmation.

The promise of carrier billing for the emerging markets

The emerging markets represent one of the biggest growth opportunities for the direct carrier billing business. Markets around the world including South America, China, Russia, India and Indonesia are anticipated to lead the global direct carrier billing economy by 2019.

This is largely because bank accounts, debit cards and credit cards are not as popular in emerging markets as they are in developed markets. Direct carrier billing has the potential to contribute up to 50 per cent of the total application store purchases in such markets. And thus, operator billing is the only electronic payment channel available for 1.9 billion consumers in the world who own a mobile phone but still remain unbanked.

Conclusion

With direct carrier billing representing between 15 to 50 per cent of app store purchases, developers can witness a significant surge in their revenue, if they choose to open up the paid applications market to a wider customer segment.

According to researches, direct operator billing is anticipated to bring the telecom service providers revenue worth 12 billion dollars, a significant mark in an emerging mobile payment scenario. Going by this expectation, there lies great opportunity for the operators, who can offer direct payment option to the consumers in the OTT market. These operators can then take their profit margins that are bound to grow with the increasing requirement of such mobile payment options.

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