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Understanding Direct Carrier Billing

May 9, 2022

Head shot smiling young mother showing funny cartoons to overjoyed little adorable girl on smartphone.

We live in a society of immediacy, an on-demand, consumerism-driven world. We expect to be able to access a wide range of goods and services with a few clicks either on our smartphone, our tablet, or our computer. The Internet has changed the way we behave, and our mobile phones have grown to offer much more than a simpler mode of communication in an era where convenience and promptness are critical. These sophisticated devices are becoming the go-to media for various billing solutions. However, how easy and safe are mobile payments?

What is Direct Carrier Billing?

Direct Carrier Billing (DCB) is a mobile payment method that allows users to buy goods, products, services, and content online. It works with all mobile devices, including smartphones, tablets, and Smart TVs, and is available to any user with a mobile operator subscription or prepaid account. The user only needs a mobile device and a SIM card to make carrier billing transactions.

How does Direct Carrier Billing Work?

An easy, fast, and secure way to make payment, consumers complete their purchase through a 1-step registration and purchase process with direct carrier billing. Only a 4-digit PIN code is required, so there’s no need to add personal details for every transaction or fill out lengthy forms.

 

What are the benefits of Direct Carrier Billing?

Direct Carrier Billing (DCB) is a mobile payment method that allows users to buy goods, products, services, and content online. It works with all mobile devices, including smartphones, tablets, and Smart TVs, and is available to any user with a mobile operator subscription or prepaid account. The user only needs a mobile device and a SIM card to make carrier billing transactions.

  • Greater security of payments. Users do not need to provide sensitive data, such as credit card numbers or CVC codes.
  • A frictionless user experience. Do away with account registrations and tedious processes—the user’s mobile phone number is automatically identified, so no additional customer authentication is required.
  • Higher conversion rates. A simpler checkout flow drives higher conversion rates. Compared to credit card and PayPal payments, DCB increases conversion rates by up to 3x (Europe) and 5x (Asia).
  • Greater financial inclusion. DCB provides a bigger payment coverage compared to traditional payment methods like credit cards. This is key for businesses looking to expand into emerging markets, where a large proportion of the population remains unbanked.

Built For telcos

Direct Carrier Billing can help telcos maximize revenue from mobile payment opportunities. Tap into new revenue opportunities to compensate for the erosion of legacy revenue streams and drive higher conversion rates and ARPU.

Made For merchants

Direct carrier billing is available to an increasing number of businesses, including game developers, streaming services, app stores, e-commerce platforms, and more. Reach more potential customers, trigger impulse buys and boost conversion rates and improve customer satisfaction and loyalty in a competitive landscape.

Why use Direct Carrier Billing?

Direct carrier billing offers more payment coverage than traditional payment options such as credit cards. Direct carrier billing provides more payment coverage than standard payment methods like credit cards. According to World Bank data, credit card usage remains at 10% or less in Thailand, Indonesia, and Vietnam, whereas mobile payments are utilized by 47–67% of the population in those countries. Even more, globally, there is only one credit card owner for every five mobile phone owners worldwide. People prefer to pay by direct carrier billing because of its ease and security, even in developed economies where debit and credit cards are extensively utilized.

  • There are 5x more mobile phones than credit cards.
  • A simple checkout UX can result in an x10 increase in conversion.
  • Payments are secure since no personal information is sent.

What does the future look like for DCB?

Carrier billing is expected to expand at a compound annual rate (CAGR) of over 7% over the next five years, from US$50 billion in 2020 to roughly US$80 billion in 2025, according to analysts at research firm Omdia.

Growth continues to be driven by leading app stores, games, streaming and entertainment, and bundling. As we all sheltered in place during the pandemic, carrier billing revenue saw a significant increase in transaction volumes. Existing customers bought additional online games and streaming services, and a slew of new users experienced the benefits of carrier billing for the first time.

If you want to learn more, check out this article by Jonathan Kriegel, CEO of DOCOMO Digital, in which he describes how Direct Carrier Billing fits into the rapidly developing industry for digital and mobile payments.

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