Direct Operator Billing – The Continued Evolution of Monetising Apps

By Michael De Jongh, Global Head of Sales, Mobile Billing & Payments, MACH

Traditionally, the payment options available for apps have been overly-complex. Either a credit card is required – which disrupts the user-experience and gives rise to fears of identity theft – or PSMS’s rigid pricing structure is used preventing more competitive pricing models from being put in place. Direct operator billing removes those complexities, providing the right mechanism for apps monetization.

Direct operator billing (DOB) enables flexibility that stimulates user uptake and merchants’ revenue streams while encouraging conversion rates that are far higher than with PSMS and credit card payment methods. Through features such as one-click purchase, real-time charging, flexible pricing points and direct refund capabilities, DOB is ideally suited for Pay per Download and in-app purchases to the apps ecosystem. Indeed, according to Nokia, direct operator billing proved to be 13 times more effective than credit card payment methods, while Strategy Analytics has found that nearly 40 per cent of users in Western Europe prefer the direct operator billing payment mechanism.

The sheer ease of use that DOB brings, when compared to other payment methods like PSMS and credit cards, massively impacts how often consumers buy goods from app stores and within apps themselves. As a result, DOB elevates the role of the mobile operator to the position of a true payments service provider, allowing it to place itself in the e-commerce value chain and start to win market share from major credit card brands and companies such as PayPal, which have to date dominated the space.

In the future, it is even possible that through DOB, operators will be able to extend their e-commerce credentials into physical goods and services. It is possible that any online payment could be charged to the phone bill rather than to another payment mechanism. If this situation arises, then the potential benefits to operators will be significant and may fundamentally alter the role of the operator in our lives.

About MACH

MACH connects and monetizes the telecom world with cloud-based, managed communications services that monetize mobile data, simplify interoperability between networks, optimize wholesale processes and protect revenues. Combining its flair for successful innovation with its long heritage in data and financial clearing, settlement and hub based connectivity models, it provides its 650 operator customers with the real-time, value added services necessary to succeed in 3G and new 4G mobile ecosystems.
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