Technology giant Microsoft has adopted carrier billing as a payment option for customers to purchase apps on Windows phones, and will be expanding the service to include tablets and desktop computers. It is amazing to see that a tech giant like Microsoft, known specifically as a software provider, is also exploring payment options to reach consumers.
Microsoft has partnered with 90 mobile operators in close to 45+ markets to enable a carrier billing service for windows devices. The company has also introduced the carrier billing service in emerging markets like China, Brazil and India to leverage direct payments, as these countries have a lower level of credit card penetration compared to other developed countries.
Initially, when apps were published for purchase, technology companies had to think of a way to make the apps more available to the end consumers. Purchasing apps with credit cards, debit cards and other payment methods was a lengthy process that could be further optimized. Gradually, app developers began utilizing the pre-existing concept of “Carrier Billing”, which allowed the tech companies to partner with mobile network operators to include carrier billing as a payment option for the purchase of digital content. This service allowed customers to purchase digital content, such as apps and in-app content, and be billed for it in the monthly mobile statement; for prepaid users, the amount was deducted from their prepaid mobile balance.
Before the introduction of smartphones, the concept of carrier billing was limited to the purchase of ringtones and wallpapers. It has since evolved and reached a phase that allows users to purchase digital content such as apps and tokens in a smooth and user-friendly manner.
Companies such as Fortumo, Boku, Bango, Zong and others specifically in the business of providing carrier billing as a service already exist, and the entry of large players from other verticals such as Microsoft, Google, Amazon and Facebook into the carrier billing space poses a potential threat to the smaller players. Foreseeing this, these companies have already adopted strategies and begun acquisitions, partnerships and global expansions to remain in the business:
Boku, a leading carrier billing mobile payments company acquired Mopay, another carrier billing service from Germany. The acquisition made Boku the largest provider of carrier billing mobile payment services. Boku also provides its services to big brands like Facebook, Sony and Electronic Arts.
Bango has extended its service to Amazon mobile apps, which allows users to purchase paid apps and in-app content on Amazon and include the transactions in their phone bill. Bango also works with Firefox’s Marketplace, Windows Phone Store, BlackBerry, Google Play and Facebook.
Fortumo Mobile’s payments service is available in 88 countries. The company partnered with Safaricom in Kenya at the beginning of this year to enable 18 million Safaricom customers to make in-app purchases.
A few years ago, eBay acquired Zong to enable a carrier billing service for online payments and integrated it will Paypal. Zong lets users make purchases online and include them in their mobile bill statements.