Voice of the Industry

Direct Carrier Billing: Trends, Updates, and Opportunities

Monday 18 November 2019 08:26 CET | Editor: Tiberiu Avram | Voice of the industry

According to Statista, in 2019 the number of mobile phone users is forecast to reach 4.68 billion. With more mobile phones than credit cards worldwide (in 2018, there were 6.3 billion cards in circulation in total), higher payments coverage in emerging markets, and a simple checkout flow, direct carrier

This growth is seen in multiple telco partnerships initiated in industry segments like gaming, social networks or streaming. According to Juniper Research, the value of digital content transactions paid for by carrier billing is expected to reach USD 47 billion by 2020, more than 4 times the amount of under USD 11.3 billion in 2015. Other segments, such as transportation or ticketing, are able to leverage the capabilities ofDCB due to improvements of commercial and technical capabilities of telcos (see the latest partnership between EasyPark andFortumo, which aim to allow Slovenian drivers to charge parking fees to their mobile phone bill).

From a regulatory perspective (PSD2 and GDPR), merchants using DCB had a lot to gain during the past years as carrier billing is the payment method which requires the least amount of consumer data for processing transactions. DCB ensures a friendly payment user experience: there is no need to sign in or create additional accounts to pay, nor share personal data online. Under PSD2, single DCB transactions are capped to a maximum of EUR 50 per transaction, with a monthly limit of EUR 300. The PSD2 will continue to allow electronic money institutions to extend the scope of DCB from digital content to the purchase of physical goods.

However, there are a few obstacles when considering implementing this payment method: transactional fees that are charged to the merchant whenever a customer uses DCB, Mobile Network Operators (MNO) that charge app retailers, the average price of just-in-time purchase of minutes, regulatory constraints, and the complex DCB ecosystem in emerging economies. Moreover, high fees make it a less attractive option for OTT, content providers that distribute streaming media as a standalone product directly to viewers over the internet.


With 80-90% smartphone penetration, carrier billing in the Nordic countries has a 10-21% market share from digital content payments. In Norway, DCB is the second most popular payment method for digital gaming, while in Finland, it has a 16.2% market share in digital gaming transactions, according to SuperData Research. Digital merchants including Facebook, Apple, Google, Netflix, and Riot Games have begun to leverage carrier-based payments in the region.

Thanks to fast adoption of smartphones and low access to traditional payment methods such as credit cards, DCB is very popular in LATAM. According to a report by Fortumo, carrier billing is the second most popular payment method for digital gaming transactions in this region. However, as the report shows, LATAM still has some way to go when it comes to the deployment of modern direct carrier billing solutions by telcos, while the complicated taxation system makes doing business in the region challenging. For this reason, telcos rolled out their own offerings, such as Vivo with its Android app store in Brazil and Claro with its music streaming service across the entire region. Also, a great potential here is represented by gaming and digital content.

Asian landscape looks promising for DCB. In 2018, Subscription Video on Demand (SVOD) services were estimated to reach 1.8 billion subscribers, Amazon Prime launched in India, while Tencent announced its plans to dominate the e-sports and live-streaming scenes, with its USD 632 million investment in Douyu, and online games streaming platform. As Fortumo’s Carrier Billing in Asia Report shows, when it comes to monetising digital services, service providers face a challenge caused by low bank cards ownership, which can constitute an opportunity for the development of DCB service.

In this region, digital content and streaming is largely paid for using DCB with SLA Digital, one of the most important players in the region that links MNO with merchants. The average revenue per user from DCB in UAE was USD 6.4 in September 2018, higher than in Switzerland or Netherlands. Of great importance for the evolution of DCB in the region is 5G technology, with its commercial 5G networks, which is expected to drive the usage of DCB.

Opportunities and innovation

High smartphone growth and low credit card penetration bring countless opportunities for DCB, especially in emerging markets. In countries like India, Nigeria, Brazil, Egypt, Indonesia or the Philippines, smartphone adoption is increasing, while mobile data consumption in these regions is growing faster than in mature markets.

As the majority of potential gamers are located in mobile-first emerging markets and credit cards are not popular or suited for this type of consumers, DCB is a better solution, being by default available to any mobile phone owner, whether they are playing on their mobile,PC or on a console. DCB is deployed by many game developers and is among the most popular alternative payment methods for digital gaming. Moreover, mobile gaming accounts for over half of the gaming market, generating new opportunities for DCB providers.

This editorial was first published in our Payment Methods Report 2019 – Innovations in the Way We Pay, which provides a comprehensive overview of the up-to-the-minute trends, updates, and innovations in the payments space worldwide, depicting the key developments in the way people pay.

The Paypers is the Netherlands-based leading independent source of news and intelligence for professionals in the global payment and ecommerce community. Our products address ecommerce, payments, Fintech and fraud management professionals, as well as merchants, payment services providers, payment processors, merchant acquirers, banks, financial institutions, start-ups and technology vendors.
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Categories: Payments & Commerce | Online Payments
Countries: World
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