DIMOCO guest blog post #3 of 4: Unleashing the optimal potential of carrier billing

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Carrier Billing continues to help realize revenues

By John BaRoss, Founder & President, FINCCLUDE Incorporated

In recent years, pioneering Carriers and their partners have

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continued to successfully advance how CB helps merchants and consumers by demonstrating again CB’s effectiveness as a billing option – now for ‘soft-physical’ goods like ticketing (i.e.: commuting/transportation via taxi, ferry, train, ferry, (etc.); sporting events and more). The benchmarks for incremental revenues, larger addressable markets, higher conversion rates, as well as stickier customers and goodwill windfalls again were achieved.

 

A majority of FinTech Payment Industry coverage focuses on marquee companies (Apple, Google, Samsung, etc.) as they strive to advance Mobile Payments/proximity payments. While specifics are proprietary, one important indication of marketplace feedback comes from Vodafone which has the flagship Carrier operated mobile money service: M-Pesa. In contrast to the attention garnered by proximity payments, a significant majority of M-Pesa transactions are remote as opposed to proximity, reinforcing the notion that CB’s focus dovetails with consumer/marketplace needs.

 

During a late May 2016 webinar by Ovum, CB was stated to have achieved $16.6B in 2015, projected to climb to $25.3B by 2020. Clearly $16.6B is huge, yet viewed through the lens of Carriers which had aggregate revenues of $1.02T in 2015, CB was less than 2% of the Carrier industry’s 2015 total. That said, there is growing appreciation in increasing numbers of Carrier C-suites that M-Commerce revenue is projected to be $1.3T by 2020, overtaking aggregate global carrier revenues in just a few years. The incremental revenue opportunities from M-Commerce via Carrier billing assets can be huge.

 

As CB understanding, acceptance and appreciation grows, regulators to carriers globally are now making moves to adjust regulations and modify carrier economic models to help unleash the optimal potential of CB for online merchants selling physical goods. Speaking with industry leaders involved in emerging CB-physical goods initiatives, two (parallel) value proposition thrusts were evident:

 

1) Harnesses the array of CB benefits (merchants realizing incremental revenue, reaching larger addressable markets, superior conversion rates, etc.). There is also an increased focus on CB helping advance financial inclusion – a differentiated strength of CB as its purpose since the beginning was to reach the unbanked.

2) A new twist for those familiar with carrier economic models because it involves margin advantages. Carriers have established a reputation for charging a premium for DCB. Merchants decide whether the incremental business via CB was worth CB’s premium (lower margin to merchant). As a variety of environmental factors have evolved over time, a trend is emerging with carriers becoming more competitive with their margins, and in some markets the CB margin is providing a better margin compared to certain alternative payment options.

 

More about FINCCLUDE: www.fincclude.org).

Happy to get your thoughts via twitter #DIMOCO or email to hello@dimoco.eu

DIMOCO guest blog post #2 of 4: The reasons for the acceptance of carrier billing

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John BaRoss Fincclude

John BaRoss, Founder & President, FINCCLUDE Incorporated

 

 

What are some of the reasons for CB’s acceptance and successes globally?

*Incremental revenues: Even in the US, merchants utilizing CB were able to realize a 10%-30% lift in revenues by adding this payment option.

*The revenue lift in US was realized because larger addressable markets were reached.

*The unbanked (poor, rural, teens, etc.)

*Those concerned about having their credit card or bank account info hacked.

*The near ubiquitous billing reach of carriers.

*A vastly superior conversion rate of CB over credit card and other payment options (touted by at least some providers to be as much as 5 times higher).

 

 

Fundamentally there has been a logical progression of CB derived in large part to a complex array of environmental factors per

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nation spanning regulatory climate, penetration rates of traditional payment methods, taxes, priorities of carrier leadership, carrier margins, etc. Generally speaking, CB’s initial progression evolved from microtransactions thresholds, upmarket to higher price points as online merchants scaled the array of premium digital goods. First-movers continued to pioneer with CB, next expanding

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into forms of non-digital services. CB continued to meet or exceed key measures (incremental revenues, risk management, etc.).

 

 

The superior conversion rate of CB and the possibility of CB addressing new customers (even in countries with strong credit card penetration), continues to be realized by merchants. Further, some carriers began to discover that they can realize a goodwill windfall from helping to bring financially excluded populations into the digital economy via CB, as well as other ‘Carrier Commerce’ offerings such as mobile money and much more.

 

 

About FINCCLUDE: Non-profit FINCCLUDE (Financial Inclusion Now, Carrier Commerce Leading a Ubiquitous Digital Economy) is downstream from AFI (Alliance for Financial Inclusion), uniquely exclusively serving the Carrier Commerce industry at the intersection of Financial Inclusion by helping to facilitate the cross-pollinating of financial inclusion success-knowledge to operational leaders in Carrier Commerce (when necessary, as a rapid response unit). www.fincclude.org).

 

 

What are your reasons that carrier billing is so well accepted?

Happy to receive your thoughts via twitter #DIMOCO or email to hello@dimoco.eu

DIMOCO guest blog post #1 of 4: Carrier billing becomes an impactful payment solution

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By John BaRoss, Founder & President, FINCCLUDE Incorporated

John BaRoss Fincclude

A rather quiet alternative payment solution is continuing its inexorable ascension in depth and now breadth as a major, impactful payment solution globally.

 

Carrier Billing [CB], also referred to as Operator Billing, had its beginnings back near the dawn of monetizing the Internet. Visionaries of eCommerce saw the potential for transacting online, plus anticipated new forms of digital products but at price points far below viable economic model thresholds of traditional payments options like credit cards. The notion of micropayments caused eCommerce planners to intuitively look to telco/carriers to overcome this challenge. While carriers are communication network companies, their other significant core competency was billing. Specifically carriers supported line item billing of network call events that often represented charges to customers in amounts comparable to microbilling (less than $5.00, even less than $1.00).

 

In the US, while credit card penetration was significant, industry studies showed sizable portions of the population on the sidelines of eCommerce (20-40%+) due to either being unbanked or fearing to transact online with one’s personal financial account information. Leadership at major merchants viewed carrier billing as the Holy Grail of eCommerce billing but in the US, carrier leadership was under significant financial pressure due to chasing the fraudulent MCI/Worldcom ghost, and cramming and slamming billing complaints to the FTC, FCC then to Carrier C-suites (for unauthorized switching of long distance carrier). These environmental factors influenced thinking at leadership of US carriers to not aggressively pursue carrier billing.

 

Over time, while the US became generally viewed as a global laggard with CB, globally hundreds of carriers, thousands of merchants and countless millions of consumers scaled utilizing CB to make purchases of a potpourri of premium digital content goods and services. In 2016, CB has expanded its global reach to be available in about 120 countries (representing over 90% of the world’s population), supported by 1-10+ carriers per country. Leading industry analyst firms approximate the DCB globally supports $12-$16B+ now, projected to grow to over $24B by 2019.

 

About FINCCLUDE: Non-profit FINCCLUDE (Financial Inclusion Now, Carrier Commerce Leading a Ubiquitous Digital Economy) is downstream from AFI (Alliance for Financial Inclusion), uniquely exclusively serving the Carrier Commerce industry at the intersection of Financial Inclusion by helping to facilitate the cross-pollinating of financial inclusion success-knowledge to operational leaders in Carrier Commerce (when necessary, as a rapid response unit). www.fincclude.org).

 

What’s your opinion about carrier billing? Happy to receive your thoughts via twitter #DIMOCO or email to hello@dimoco.eu

A Quiet Giant of Mobile Commerce: Carrier Commerce – a weekly blog series by John BaRoss

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John BaRoss-01

 

Today I want to tell you something more about the two major sectors of Carrier Commerce!

 

The two major sectors of Carrier Commerce today are:
1) “Direct Carrier Billing” [DCB] – 2c in the hierarchy – today a $12B global industry, operating in over 100 countries, projected to grow to $18B-$22B in the coming years.
2) “Carrier Mobile Money” [CMM] – 1cii in the hierarchy – today a $2B global industry, operating in over 60 countries today and projected to more than double in the near term

 

Direct Carrier Billing and/or Carrier Mobile Money is available today to over 95% of the world’s population via hundreds of participating Carriers who partner with FinTech PSPs (Payment Service Providers) who enable these services. Today the mobile phone is the most ubiquitous technology worldwide in all developed and developing nations. Carriers globally have over 7B mobile phone accounts … nearly equal to the total global population. This distribution reach of Carriers dwarfs all other payment options combined.

 

Importantly, Carrier Commerce’s sectors of Direct Carrier Billing and Carrier Mobile Money both address market needs and pain points now. This fact helps explain the significant (yet oddly mostly quiet) adoption of DCB and CMM globally. That market pain point fundamentally dovetails with one of the great noble causes of our time – Financial Inclusion.

While Carrier Commerce is a compelling business opportunity that helps online merchants reach larger addressable markets, there is a higher calling that Carrier Commerce serves in that its unsurpassed distribution is helping improve the lives of countless millions globally.

 

In the next edition of this series I’ll share more about how Carrier Commerce is helping the unbanked become a part of the global economy – which helps them realize better lives.

Yours John BaRoss

A Quiet Giant of Mobile Commerce: Carrier Commerce – a weekly blog series by John BaRoss

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John BaRoss-01   As I announced in part 1 of my series I will illustrate the common

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industry terms with a hierarchy-graph in part 2.   (click to view the whole poster)150716 John BaRoss-02   This hierarchy overly simplifies the complex array of payment industry solutions and does not include all the current and emerging solutions and permutations between multiple solutions in mobile commerce. What this format does provide is calibration of the common terms in mobile commerce, showing (for instance) that mobile wallets – which dominate the industry media this year with headlines about wallet wars – is a subset of mobile commerce. As investigative reporters have been seeking to get a scoop on launch dates for the various marquee mobile wallet providers in the news, there has been a nearly invisible portion of the Mobile Commerce landscape that is broadly referred to as “Carrier Commerce”.   In part 3 I will let you know something more about the two major sectors of Carrier Commerce! Stay tuned! Yours John BaRoss