|By D.J. Murphy, Editor-in-Chief
mopay, a direct carrier billing technology provider based in Palo Alto, Calif. enables merchants of virtual, digital and physical goods to bill single and recurring charges to consumers’ landline, mobile or broadband accounts. On Websites where mopay is an option, consumers who make a purchase simply type in their mobile or landline number and authenticate the transaction by confirming via text message. Like all providers of direct carrier billing technology, mopay boasts much higher conversion rates than other online payment options (see research results below) and appeals to consumers who don’t have bank accounts or credit cards, making mopay very attractive to merchants that want to conduct business across borders where credit card and bank account penetration is low. But, mopay says several factors differentiate the company even from other direct carrier billers.
mopay notes it has the highest coverage of any carrier-based billing provider. The company, which launched in 2003, operates in 80 countries with access to more than 380 mobile network operators reaching 4.3 billion mobile phone users around the world.
And, while most mobile payments providers focus on Web purchases and in-app purchases on smartphones, mopay says it is the first company that has the flexibility to offer direct carrier billing for purchases made on other platforms. As technology advances, consumers increasingly will have the opportunity to make purchases from Internet connected devices that include tablets, televisions, game consoles, in-car entertainment systems, kiosks and even appliances. While purchases made from many of these platforms are not widespread, mopay is well positioned to take advantage when the payments environment evolves to include them more fully.
Another differentiator is the company’s ability to now offer billing to consumers’ broadband Internet bills. Mopay says two of its top five customers already use broadband billing as a payment alternative and both have seen “significant” increases in business volume. Also, the company offers customized payment windows that mimic the look and feel of the merchant’s Website and increase conversion by an additional five percent.
Increased conversion is the most compelling argument in favor of direct carrier billing and mopay cites research conducted by the University of Augsberg (Germany) that confirms that assertion. In a comparison of two groups of 1,000 customers, each with a $10 basket, carrier-based billing led to 68.1 percent conversion, earning $4,426 for the merchant. Credit card payments showed a much lower conversion rate of 7.8 percent, leading to $764 earnings. Although the fees still imposed by the carriers are considerably higher than credit card processing fees, the study found the overall income with direct billing still largely surpassed the sales obtained through credit card payments.
For the moment, direct carrier billing is mainly limited to microtransactions due to maximum-dollar-value restrictions imposed by the mobile carriers. But, for this class of transaction, mopay says its payment method is tough to beat, ideally suited for digital content and subscription billing.