Direct Carrier Billing: The Next Big Thing for Zambia’s MNOs

Mobile payments company Fortumo recently partnered with Safaricom in Kenya and launched its first carrier billing service, on Safaricom’s 18 million plus customers. This service allows subscribers make payments for goods bought online and charge it to their phone bill.

About the venture, Gerri Kodres, Chief Business Officer of Fortumo said, “…digital content merchants are struggling to generate revenue from these users due to low credit card penetration. Fortumo helps solve the issue for merchants by allowing any person – banked or unbanked – to make payments online through carrier billing instead.”

Kenya is the 3rd country covered by Fortumo carrier billing in Africa, after South Africa and Nigeria but is also available in 15 markets in Middle Eastern & African regions.

(Update: Safaricom has since denied this direct carrier deal and asked Fortumo to remove that information from the Fortumo website. Representatives from Fortumo had earlier announced that they had been testing the product in Kenya for a while before its official launch, but Safaricom has refuted the claims.)

With direct carrier billing (DCB), mobile network operators (MNOs) can be a part of over-the-top markets by backing a payment choice for subscribers that is directly charged to their monthly cellphone bills.

With more online merchant content being spun around mobile payments, DCB helps mobile operators gain a revenue share of what would otherwise have been made by third parties like credit card payment service providers. Looking at the Zambian population, more people have mobile phones than they have bank accounts or credit cards so DCB has potential to grow.

How this would benefit mobile operators in Zambia

With more online content tied to mobile devices, mobile network operators (MNOs) will gain revenue from the increased sale of data bundles to access and download online content. There will be a need for MNOs to upgrade their billing services but the costs incurred will be paid back from that revenue stream.

There will also be an increased demand for devices by Zambians from MNOs that support internet connectivity, making another revenue stream, as subscribers become aware of digital online content and its convenience of payment through DCB.

Direct Carrier Billing  itself through its developers will pay the MNO a fraction of the price of the value of the transaction so that’s the third way MNOs make some extra moolah!

However, mobile operators must consider a few things:

•  The billing platform after being upgraded should be able to support further expansion in the billing system over time. It should not completely rid of the existing mobile platforms but run with alongside it.
• The billing system should be secure concerning subscribers’ information.
• There should be a feature that tracks the money trail and the product being exchanged.
• MNOs should also have, in partnership with the DCB developer, features that deal with new subscriber signings, allowing a subscriber to check their transaction logs, and also possible refunds of purchases.
• They must be able to settle payments with third party partners swiftly through this system.
• MNOs should consider opening up their APIs to third party developers so that they have wider exposure through other channels like apps and websites serving the online content. Granted, they may have concerns with security and privacy issues but with expert developers, the loopholes can be sealed to make the system flawless.
• Direct Carrier Billing may work well with postpaid customers mostly, who pay their bills at a set date of the month. Prepaid customers would have to recharge their airtime balance everytime they want to make a payment, which may be tedious for most.

As for subscribers, their benefits are convenience, time saved and quicker, secure payments for goods they need.

So dear Zambian MNOs, you may want to get on to that direct carrier billing platform real fast.