Although credit cards have become a standard way to make mobile payments, many mobile users are looking for an easier way. They want something that doesn’t require the hassle of a registration process and doesn’t involve the concern caused by having to type their credit card numbers in a form. Syniverse has been providing a solution to meet this need, and in this post, I would like to share a few thoughts on what’s known as direct operator billing.
Direct operator billing enables end users to purchase content from app stores through a seamless payment process that adds the charge directly to their mobile phone bills. The convenience of the experience delivers a more seamless purchase process that greatly increases transaction completion rates and is highly suited to app store payments.
Syniverse recently extended its billing services with the launch of a Google Play operator deployment for E-Plus in Germany. Through our history of app store integrations, we’ve gained insight into why direct operator billing could have a profound impact on app store payments in the next few years. Here are three critical takeaways:
- A mobile world demands a mobile payment experience – Operators and app stores that have implemented direct operator billing have benefited greatly from increases in purchase transaction volume. While a user could pay with a credit card at the time of purchase, a seamless payment experience is more complementary to the mobile medium as well as low-value transactions. Users appreciate the convenience of adding items on their bills without the security concern of alternative payment methods or inconvenience of a lengthy registration process.
- Operators can monetize over-the-top (OTT) services indirectly – The OTT market is rapidly evolving, both in terms of new entrants that can rapidly gain market share as well as market consolidation, such as the recent WhatsApp purchase by Facebook. By working with a cloud solution provider to connect to one or more app stores, operators don’t need to partner with individual OTT providers and can offer their customers a whole store full of content.
- Low barrier to entry means low risk and high reward – Increasing smartphone penetration means that mobile traffic is rising, yet monetizing this trend can be a challenge. With direct operator billing, operators can enable a new revenue stream from purchases of apps, music, e-books, movies and games, without having to invest in infrastructure, hardware or software.
Do you think direct operator billing will become the prevalent app store payment method? How widely do you think it will be adopted in the next year, and what will be next in mobile payment services? I would love to read your comments and feedback.