Despite perennial 'bill shock' fears from telcos and moans from merchants that telcos always demand too large a slice of the pie, direct operator billing is on the up. By Ian Scales.
Telcos have always had great faith in the ultimate value of their billing relationships with customers as a way of their maintaining visibility in the value chain - and of making a significant slab of extra money through offering billing services to merchants. So services to enable so-called direct operator billing (DOB), where a couple of clicks (or thumb touches) enables a subscriber to purchase online goods and services and have the charges appear on the mobile phone bill at the end of the month were surely always going to get traction.
Carrier billing is arguably more secure (with identity linked to the phone) for all parties and less troublesome for the user than making an online debit card payment. Advantages which intensify on the smartphone's small screen.
Now with telcos really starting to deploy DOB services, that faith appears to be paying off.
DOB for online payments of all types, but particularly for app and 'in-app' (ongoing payments from within a downloaded application) payments are apparently growing as a proportion of mobile payment types and a survey just released appears to show that subscribers prefer it to alternatives such as Paypal.
Direct carrier biller PayOne (formerly PaymentOne) - a business which aggregates the billing relationships between online merchants and all the payment options - including direct operator billing - says DOB is a growing part of the mobile payment market. PayOne claims millions of consumers customers, its network operates in more than 80 countries across 1,200 operators and it's just signed a significant deal with T-Mobile in the US. T-Mobile's users will soon be able to opt for DOB when making PayOne payments.
Clearly users like DOB. According to a consumer survey of 2000 smartphone users commissioned by MACH, the mobile exchange solutions provider, DOB is now the preferred payment method for both app downloads, and for in-app purchases, despite being a relatively recently launched service for many operators.
More than one third (37 per cent) of smartphone users in the UK and Germany have already paid for apps via DOB and 29 per cent of smartphone users who have made app or in-app purchases prefer to have the charge added to their mobile phone bill. That's a significantly higher percentage than the 18 per cent who say they prefer credit card payments and the 10 per cent that prefer debit cards, claims MACH,
Those surveyed named convenience (66 per cent) and speed of use (50 per cent) as the main draws of DOB. Around 19 per cent of smartphone users in the UK said that they would likely switch networks if their provider was unable to offer a direct operator billing solution.
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