onebip-tip-of-the-month

Top questions merchants ask about carrier billing answered

Editor’s note: This is part of a monthly blog series by Gokmen Atak, Onebip’s Product Offer & Quality Specialist.  Gokmen aims to share his “Tips of the month” which includes product features and updates that Onebip partners can take advantage of to improve their mobile payment offering.  Please feel free to add your comments at the end of the post.

Carrier billing is the only working mobile payment method on a global scale. Google, Samsung, Electronic Arts and Sony have already seen its potential and are already offering it. Carrier billing is expected to grow to $13 billion by 2017 for digital goods payments only. In this Tip of the Month, I will list the questions most frequently asked by merchants about carrier billing and will answer them.

1. What is carrier billing?
Carrier billing is a type of mobile payment which allows consumers to pay for products and services by charging the cost to their mobile phone bill.

2. Who can use carrier billing?
Anyone with a mobile carrier subscription can use carrier billing (over 5 billion users worldwide). Mobile carrier subscription coverage is 120% in developed countries.

3. Who are the players involved in a carrier billing transaction?

The carrier billing value chain has four players: the mobile carrier who has the billing infrastructure and agreement with the consumer; the merchant who has the products and services and offer carrier billing to consumers; the carrier billing platform provider who provides the carrier billing technology platform and connects merchants to mobile carriers and the consumer who buys the products and services.

4. How is VAT handled in carrier billing?
VAT responsibilities vary country by country depending on VAT legislation. In some cases, VAT is deducted and paid to the tax authorities by the carrier and in others the funds are remitted directly to the merchant without deduction of VAT who is responsible for paying the taxes.

5. What are the content restrictions for carrier billing?
Payment service directives and telecom regulations might limit the types of goods and services that can be purchased using carrier billing. For example, while payment directives in European Union limits the types of merchants that can offer carrier billing to those selling digital goods only, in certain countries like South Korea and Turkey consumers can pay for any type of goods and services including physical goods using carrier billing.

6. What are the price points that can be used in carrier billing?
Price points vary carrier by carrier which can be as small as 0,50€ and can go as high as 100€ for a transaction. Telecom regulations and carriers themselves decide on price points that they allow consumers to pay with carrier billing. However there is no consensus among carriers operating in the same country on price points.

7. How is the user experience for consumers using carrier billing?
Consumers share their mobile phone number in an interface provided by the carrier billing platform provider in the check-out of the merchant store. The carrier billing platform provider sends the purchase request to the mobile carrier who bills the consumer and returns the purchase result to the merchant who then delivers the product and the service to the consumer. Authentication of the consumer is provided by certain authorization methods such as a PIN sent to consumer by a short message to verify the transaction.

Do you want more information about carrier billing? Contact us at partner.relations@onebip.com and read my blog post “Carrier Billing is not rocket science” to find out more.