In the last few years, OTT players taking away a sizable chunk of the telco revenues. To deal with this, it’s time the operators harness the potential of new streams of revenue. Direct Carrier billing is one such avenue.
Direct Carrier Billing is a telco driven payment model, for the digital services. Direct Carrier Billing (DCB) opens the possibility of generating a new revenue stream for operators, by leveraging on the existing telco network and the billing relationship with the customers. Direct Carrier Billing, enables telcos to allow its wireless subscribers (both prepaid and postpaid) to purchase goods and services using their handsets. The cost of purchased good and services are added to their monthly phone bill or deducted from the prepaid balance, thereby providing a seamless & secure payment mechanism. This medium enables a very simplified online payment experience with just a click to complete a transaction.
Why is Direct Carrier Billing beneficial for the Telcos?
Juniper Research found that operator revenues derived from carrier billed purchases will rise from USD $2.9 billion in 2017 to USD $9 billion in 2022, an average annual growth of 25%. With growing purchases via DCB, operators enabling their customers to buy all kinds of goods and services using their mobile services subscription will add a new revenue stream for the operators.
- The operators can take a % of the revenue from the transactions, and their customers don’t have to look for a financial relationship with another company.
- It is a win-win situation for both the operator and the merchant since it also helps the merchant extend their reach by using the operators existing customer base.
- The higher conversion rate in DCB transactions will lead to an increase in ARPU for operators.
- The payment method is extremely simple and secure leading to better user experience and reduction in customer churn.
Leading Technology firms like Google, Apple and Amazon are also investing in building DCB relationships with operators and vendors (like Fortumo, Bango, Boku etc.). They strongly believe that DCB will allow the unbanked to better engage and participate in the digital economy. The increasing desire to enable payment across Smart TVs, Xbox and IoT devices emerging in the market, widens the opportunity for Direct Carrier Payment.
With most of the transactions completed via DCB, the problem is that maintaining Direct Carrier Billing functionality sometimes fails due to settlement involved between the multiple parties and the frauds in the DCB chain. Subex Direct Carrier Billing Assurance program protects the entire DCB chain providing end to end Risk and Fraud Management.
Stay tuned to know more about Subex Direct Carrier Billing Assurance.
Nirbhika has 9+ years of experience in the Telecom and the IT industry, which includes working with Infosys and Amdocs. Currently, she is working in the Business Solution & Consulting group for the Emerging Markets.