Voice of the Industry

Carrier billing: exploring the agent model's impact on payment innovations

Friday 17 May 2024 07:25 CET | Editor: Irina Ionescu | Voice of the industry

Martin Kneifel, Head of Provider Management as DIMOCO Payments, discusses the multiple future uses of carrier billing by tapping into the agent model.

Smartphone penetration in Europe reached 85% in 2023, setting the stage for innovative payment solutions like carrier billing to flourish.

The rise of carrier billing and its limitations

In recent years, carrier billing has emerged as a convenient and efficient payment method, allowing consumers to charge purchases directly to their mobile phone bills. This method has gained traction across diverse sectors, from iGaming and entertainment to EV charging and transportation services.

However, traditional carrier billing has faced limitations and regulatory hurdles. Outside of ticketing and parking, it can only be used for digital goods and services, and there is a restriction on how much can be spent – a maximum of 50 EUR per spend and 300 EUR for the calendar month. However, since 2019, DIMOCO Payments has been using the agent model, which opens carrier billing to a much wider audience by allowing it to be used for the purchase of non-digital goods and eliminates the payment limit.

Introducing the agent model

Recognising the need for innovation to overcome these challenges, the agent model has emerged as a transformative solution within carrier billing. This model enables Mobile Network Operators (MNOs) to act as payment agents under licensed service providers, thereby breaking traditional barriers and expanding carrier billing capabilities.

With the agent model, carrier billing becomes the perfect payment method for intuitive/ad-hoc payments. 

What is the agent model and how does it work?

The agent model empowers MNOs to facilitate payments on behalf of consumers for both physical and digital goods. It allows for greater flexibility and scalability in carrier billing, catering to a wider range of payment needs in today's market.

Under the agent model, strict adherence to legal frameworks like PSD2 ensures compliance and security. The operational mechanics involve seamless coordination between MNOs, payment service providers, and merchants, to ensure a smooth payment experience for users. 

Legal framework and compliance

For instance, the agent model that allows for increased payment thresholds, as well as the purchasing of non-digital goods, allows for the responsibility to be compliant and sticking within the legal framework to DIMOCO Payments. The mobile network operators work as agents and, therefore, do not have any liability. 

Operational mechanics

The figure below details the process flow of the agent model in carrier billing transactions. The operational setup does not change from the usual carrier billing infrastructure.



Impact and use cases

The agent model has unlocked new use cases across industries such as retail, entertainment, and transportation. 

In Germany, DIMOCO Payments is working with the leading MNOs to bring carrier billing to a wider audience. This initiative comes under the brand Zahl einfach per Handyrechnung – Pay easily with mobile invoice. Through this one brand, consumers can pay for a variety of goods and services and have the costs added to their mobile phone bill. It is active in the mobility sectors, through rentals and EV charging, as well as in vending machines, where hungry passers-by can grab a snack. Through our work with a leading EV charging company, m8mit, we can see that 28% of ad-hoc charging uses carrier billing. 

In Poland, we have introduced sports betting to carrier billing. Our partnership with STS allows people to place bets on matches and tournaments by using their mobile phone. With the EUROs fast approaching, carrier billing and the agent model represent the perfect partners to make the most of the sporting event.

Who is using the agent model?

Leading the charge in adopting the agent model is DIMOCO Payments, alongside key players like BOKU. Strategic partnerships with MNOs have amplified the reach and effectiveness of the agent model across different markets.

Future prospects and innovations

Looking ahead, carrier billing with the agent model is poised for further growth. With 5G providing faster access to the Internet and IoT connecting more and more devices, this model is expected to become even more efficient and secure, catering to emerging sectors, both in the digital and physical realm.

An example of this could be vehicles, with cars becoming connected to the IoT. When they cross borders, this could trigger a payment request for a local vignette, which could turn into the perfect opportunity to use carrier billing. 

The future of carrier billing

The agent model represents a significant step forward in carrier billing innovation. Its transformative potential is reshaping the payments landscape, offering consumers and businesses alike a versatile and reliable payment solution.

As carrier billing continues to evolve with the agent model at its helm, we anticipate a future where payments are not only seamless but also highly adaptable to the evolving needs of digital commerce. By shedding light on the agent model's impact and potential, we aim to inspire industry stakeholders and consumers to embrace carrier billing as a cornerstone of modern payment innovations.


About Martin Kneifel

Martin Kneifel has worked in pioneering telco-based payments and value-added services since 2000. Engaged in carrier billing from its inception, he worked for 13 years at Hutchison 3 and has been with DIMOCO Payments since 2020, blending deep DCB expertise with classic payment solutions.


About DIMOCO Payments

DIMOCO Payments is a payments company with over 20 years of experience that provides local payment methods on a global scale. With expertise in complex payment setups, DIMOCO Payments provides a consultative approach, partnering with merchants and enabling them to reach their payment goals. With over 100 payment methods available and acquiring capabilities, it is the partner of choice for merchants looking to grow. For more information, visit: www.dimoco.com

Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

Keywords: mobile payments, mobile money, direct carrier billing, APP fraud, payment processing, contactless payments, online payments, regulation, compliance, PSD2, digital payments, digital assets, digital wallet, payment methods, instant payments, IOT, m-commerce, ecommerce, public transportation
Categories: Payments & Commerce
Companies: DIMOCO
Countries: Europe
This article is part of category

Payments & Commerce


Discover all the Company news on DIMOCO and other articles related to DIMOCO in The Paypers News, Reports, and insights on the payments and fintech industry:

Industry Events