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Carrier billing as an e-commerce and mobile-commerce payment option is poised to expand significantly beyond the mobile phone realm when Microsoft Corp. releases Windows 10 later this year.
And carrier-billing specialist Boku Inc. says direct carrier billing is a payment option for apps and digital content available from Google Play for consumers using Zain wireless in Saudi Arabia.
Microsoft is making carrier billing an option across all devices—phone, desktops, laptops, tablets— that use the new operating system. Within two to three years of its release, Windows 10 could be on 1 billion devices, Terry Myerson, Microsoft executive vice president of operating systems, told attendees at Microsoft’s Build conference for developers in late April.
Available as a payment method for digital content in the Windows Store, carrier billing will be an option for consumers in 52 nations, across 90 carriers, including AT&T, Sprint, T-Mobile and Verizon in the United States, according to Microsoft. “This is great for our customers who don’t have credit cards, but do have phones,” Myerson said.
Carrier billing, such as what Boku is enabling for Google Play digital content for Zain subscribers, should not be exotic, Adam Lee, Boku chief product officer, tells Digital Transactions News.
Consumers select carrier billing as a payment option when configuring their Google Play accounts, Lee says. Once that’s done, to make a Google Play purchases the consumer just taps the Buy button. “When you buy something on Google Play the user experience is pretty identical to any other funding source,” he says.
Typically, spending limits are restricted by the amount of available airtime or balances associated with a consumer’s wireless account, Lee says.
Both the Windows and Boku developments not only aid payments companies, but may bode well for wireless operators looking for other revenue sources.
“Not everyone has a credit or debit cards to pay for content,” says Mary Monahan, executive vice president and research director for mobile at Javelin Strategy & Research, a Pleasanton, Calif.-based payments advisory firm.
“And as the mobile operators fight for shrinking voice and text plans, they are keen to pick up new sources of revenue,” she adds. “Carrier billing has definitely grown up: Of those U.S. adults who use their phones for purchasing, 7% say that carrier billing is the form of payment they use most.”
As a payment method carrier billing is a niche, says Andrew Copeman, an analyst at Boston-based Aite Group LLC. “Niches in payments can be very big,” he tells Digital Transactions News. “It’s a borderless type of play.”
In Microsoft’s case, the company is keen to use carrier billing as a way to bring content and additional revenue to their portable and mobile devices, Copeman says.
Carrier billing is attractive from the phone company point of view because it bring additional revenue, but it’s not without cautionary concerns, Copeman says.
One is that merchants who enable it may have to wait for the wireless consumer’s monthly phone bill to be paid before they can be paid, he says. On the other side of the settlement issue is the aversion of telco operators to take on risk. They don’t have the same capacity to manage risk as a bank or payment company, Copeman says.
While Copeman doesn’t see carrier billing becoming a massively mainstream payment option, it does have potential, especially as issues around settlement are refined. Telco operators, along with carrier-billing companies, will have to work on models that address how much risk each party can absorb, and if the settlement process can be hastened.
