The managed carrier billing services and platforms currently being offered to telcos and mobile network operators (MNOs) are no different in many respects. But they also provide some specific advantages unique to any company linking up with merchants and digital goods and service providers to facilitate quick and easy mobile payments from their subscribers’ smartphones.
To offset the erosion of core voice and SMS revenue by IP telephony and over the top (OTT) messaging apps, operators need to maximise their digital business opportunities from multiple streams. Digital services such as app stores, music streaming, cloud gaming and video content services. Being involved with these streams presents telcos with an opportunity to elevate themselves beyond the status of being mere bandwidth providers and create additional revenue by charging a percentage of the payments mobile subscribers make for these digital goods and service purchases. In addition, having a robust platform would enable telcos to drive transaction volumes and thereby the overall revenues as well as prepare for future services such as targeted advertising.
Managed service provider (MSP) payment platforms like ours have been finely tuned to help telcos do that, by making in-app purchase flows for digital services seamless and quick for subscribers. By maximising the convenience and minimising the effort that customers have to expend managing their relationship with the merchant, they serve as an ideal foundation for encouraging repeat business for one-off transactions and for sustaining a steady subscriber base.
Consumers subscribing to music, video and gaming services are notoriously good at shopping around and switching suppliers to get a better deal or to access to the latest content, and delivering positive customer experience is a good way of making sure they will come back again if they are being lured by the increasing number of providers in this space. Providing that experience, not only in terms of billing but also when it comes to resolving disputes, issuing refunds, providing automated invoices and access to past payment records are all key components of boosting satisfaction scores and retaining subscribers.
The provision and management of recurring billing systems that automate charges simultaneously improve the provider’s billing accuracy and ability to accurately forecast revenue – a metric that financial investors and shareholders often look for in recurring revenue as evidence of commercial health and potential for future expansion.
Liaison with multiple merchants can be time-consuming for telcos to manage, especially in the case of digital goods and services being made available to consumers in different geographies and economies around the world, many of whom have different payment preferences depending on budgets, culture and spending habits. A managed carrier billing platform like DOCOMO Digital’s allows operators to delegate new services for onboarding, integration and business support of digital merchants to the MSP. The platform also gives those merchants & OTT partners access to Direct Carrier Billing (DCB) to help them find new outlets for their content and services through the existing MNO subscriber base.
Those services can offer OTT partners and merchants more than just a payment channel, simultaneously delivering a partner portal from which merchants can access analytics, settlement, QoS, subscriber context enablers derived from customer data and purchase history. Part of that customer satisfaction and revenue generation comes from the ability to provide recommendations, rewards, loyalty points, or other benefits of being regular customers or subscribers with the operator or digital merchant.
When opting for direct carrier billing as a service, telcos and MNOs can have the option of re-using or adapting their existing billing systems and processes while gaining access to a platform that can quickly scale to handle sudden spikes in transactions and seasonal buying peaks. This means they don’t have to worry about investing in their own systems and infrastructure to support mobile payments. Care must be taken to select an MSP partnership that has the capacity to grow provisioning in conjunction with their own business expansion. MSPs also often have consultants that can help digital goods and services providers identify the best way to upgrade and expand their business, in order to make the most of opportunities afforded not only by international expansion but also the potential routes to new revenue posed by 5G networks and the Internet of Things (IoT).
MSPs also need to have the computing resources and security expertise to deliver sophisticated eCommerce fraud prevention, often using artificial intelligence (AI) and machine learning (ML) to categorise subscriber behaviour and create profiles to help them identify suspicious or unusual activity that could indicate false transactions in real-time before they can be approved. That same profile information can be further analysed to identify preferences and initiate targeted marketing and promotion campaigns to help operators and merchants alike improve ARPU.
The best MSPs need to have experience of helping other merchants operate in the same countries and industries, and specific knowledge of local national and regional laws and regulatory frameworks pertinent to specific industries that can constrain, or delay market expansion should the wrong approach be taken. Some countries (and different states or regions within those countries) have laws which mandate buyers are refunded within very short time periods for example – hours in some cases – if they are not happy with the purchase of their digital goods, so having an MSP to manage and issue refunds quickly is doubly important.
New laws dictating what sort of goods and services can be sold through DCB, and the value of individual transactions, are emerging both in Europe with the Payment Service Directive 2 and elsewhere in the world. Billing MSPs can help telcos successfully navigate those regulations to maximise their DCB opportunities at the expense of rival mobile payment mechanisms subject to more stringent security and privacy requirements.
Analyst forecasts suggest the volume and value of mobile payments and mobile ecosystem will grow exponentially over the next five years, but with so many competitive options on the table, operators need all the help they can get to grab themselves a larger share of that market.