Charge to mobile is perhaps the best-kept secret in mobile. While the world starts to wake up to using mobile payments, largely thanks to Apple Pay’s headline hegemony, charge to mobile – where you pay by putting things on the phone bill or taking it from the phone’s credit – has been doing pretty good business for many years.
Indeed already 75% of European consumers prefer carrier billing for digital goods if the option is available, according to research by billing company DIMOCO and it shows remarkable conversion rates, often as high as 60% to 70%.
The digital goods market is ideal for charge to mobile: much of it is consumed on the phone and it is one of the few really frictionless payment mechanisms. Indeed, Microsoft in the US and Google Play over many regions globally are already using charge to mobile for software updates and in-app purchases respectively.
This buy-in from the mainstream can only be good news for extending the reach of charge to mobile. But two things are at work here: the need for mobile payments that make buying things easier; and kids.
Kids don’t have credit cards and many don’t have bank accounts, but they do have phones and they avidly consume and interact and play games. They get charge to mobile and they are using it. And as more and more of them come of age while seamlessly paying for things with their phone bill, so charge to mobile will grow.
So where are we going to see it really taking off? Its already big in gaming and you can even buy things on Amazon in Germany using it, but there are many potential new areas for it, though typically its ideal for small, quick purchases that need added convenience. Ticketing, car parking, snackable media content, wifi access, and of course all manner of digital content are its natural habitat – at least to start with.
The most obvious of these is ticketing. This offers the chance to buy on the phone and use on the phone and covers everything from sports to concerts to travel , transport and tolls: in fact it is a huge potential market where the convenience of charge to mobile comes into its own.
“Football alone is a massive charge to mobile opportunity,” says Andrew Beurschgens, Head, Market Intelligence Insight & Strategy at EE. “In the UK alone, 19million fans visit premiership games for 19 weeks across the season: this is a huge opportunity to get them to use their phone to buy tickets, food and content. And that is just one sector.”
Media consumption is another key area: paywalls don’t really work do they and advertising – especially on mobile – doesn’t really deliver as, if nothing else, it gets in the way of the experience. Charge to mobile is the obvious choice to allow for very rapid micropayments on the device for content to consume on the device. In this instance it offers the chance click and access content almost instantly and with virtually no pain points for the consumer.
The ease of payments that charge to mobile offers has many in the industry banking on it being used for physical goods, but that requires changes to regulations and, of course, puts it in direct competition with all the other kinds of mobile payment tools such as PayPal and Apple Pay.But there are many other opportunities for charge to mobile.
And there are many more potential areas where charge to mobile can work without having to get into the sticky area of having to buy physical goods or compete with the big players. “In Germany, for instance, the post office lets you use PSMS to get a 12 digit code to write on letters in lieu of a stamp,” says Beurschgens. “This is clearly something that could be sold to every post office in the world, but also to every courier firm in the world. That alone is a massive market.”
However, there is a perception problem. Many businesses are aware of charge to mobile, but there are two common misconceptions. Firstly – and this is one that is general to all mobile payment tools – is that somehow it’s a replacement for existing payment channels. “Of course it isn’t: it is complimentary to other services: the more payment types you offer the more likely you are to get the business,” says Rob Weisz, CEO of Fonix. “So you need to start thinking of it as an add on not a replacement. You can even pop it up as a last ditch option if the consumer has dropped out at the payment stage: it is ideal for mopping up conversions.”
The other misapprehension is that it’s expensive – and back in the day it was. Operators routinely took 30-50% of the price as a fee. This is not the case anymore: now it’s down to single digits. “And operators are open to talking more about how to make that better,” says Sharan Rattan, head of payment services at Three. “We need some hero brands to give it volume.”
Are you going to be one of the heroes that gets behind charge to mobile and offers your customers a new and easy way to pay?