Merger Makes Boku Largest Direct-Carrier Biller in the World

Oct. 9, 2014

Merger Makes Boku Largest Direct-Carrier Biller in the World On Tuesday, San Francisco-based direct-carrier billing technology provider Boku revealed it has acquired German competitor Mopay to create the largest company of its kind in the world. Carrier billing, which enables users to make payments for products on their phone that are charged to their mobile bill, is considered a more expensive way for merchants to process payments but one that results in higher conversion rates, turning more browsers into buyers. Mopay merchant clients acquired by Boku in the deal include digital gaming heavyweights Valve, Gameloft and Wargaming.

Boku said adding the carrier agreements struck by the European company will increase its potential reach to 5 billion consumers in 80 countries. And, while direct-carrier billing is not very popular as a payment method in the U.S., it is much more so in other countries.

“By coming together we’ve created a company that can realize the vision of charging purchases to your phone bill as a truly global payment method at scale,” said Jon Prideaux, CEO of Boku. “Boku and Mopay serve some of the largest digital merchants in the world and together and we have one tremendous pipeline in the works.”

Financial details of the agreement were not disclosed. Boku did acknowledge that the combined company will continue under the Boku brand.

At the same time, while direct-carrier billing has largely been relegated to enabling the purchase of digital goods, two recent announcements from Boku indicate the company is moving towards expanding into the physical realm. Under a recent partnership, a London media company is using Boku to pay for magazine subscriptions . More importantly, last week, the company announced it has been licensed as an e-money issuer in the EU. Until now, direct-carrier billers were operating under an exemption to the European Union’s Payment Services Directive intended for purchasing ringtones that allowed carrier billing for digital goods only.

“Up to now buying stuff and charging it to your phone bill has been restricted, limited to digital goods and operating in a regulatory framework designed years ago to handle ringtone downloads,” Prideaux said. “We are now entering a new era for carrier billing. Boku has reinvented carrier billing as a mainstream payment method.”