We’ve got thoughts
Can Direct Carrier Billing Enhance Conversion Rates?
// Francisco Quiroga - August 27, 2015

I just returned from the Prepaid Press and Financial Mobility Summit in Las Vegas and I was excited to see the increased awareness, curiosity and interest in Direct Carrier Billing (DCB as us industry-folk call it). During the Summit, it was shared that the 2019 DCB Market is estimated to reach $24.7 billion by 2019, a 41.3 percent increase from 2014.

With such large numbers tied to this new payment method, it’s time we provide an explanation on, well…what Direct Carrier Billing is, how it works and its impact on conversion rates.

What is Direct Carrier Billing and How Does it Work?

DCB is a payment method that allows mobile subscribers to place certain charges onto their mobile phone plans. Typically, products and services like digital games and content are used with DCB. It allows for easy smartphone navigation, clear and conspicuous terms disclosures, and the ability to setup recurring billing.

Most importantly, DCB can be linked to most mobile advertising campaigns and tactics, allowing for minimal clicks and fast conversions toward purchases – a win for brands, merchants and consumers. There are a few different access points for DCB, but the most frequent models include direct integration with carriers or integration with DCB-aggregator service providers.

Who Can Use Direct Carrier Billing?

For a long time, the U.S. has been a primarily postpaid-mobile market, meaning the monthly mobile services are placed on a bill and the subscribers are invoiced. But in the past eight to 10 years, we have seen intense growth and competition in the prepaid space as brands like Boost Mobile, Virgin Mobile USA and MetroPCS hit the market and rose in popularity. In fact, 30 percent of U.S. mobile subscribers now have prepaid telecom accounts. The beauty of DCB is that it can be offered to both postpaid and prepaid subscribers, with the primary difference in billing mechanisms. So here’s the breakdown:

  • Postpaid: Third-party charges are included in the monthly service bill sent to the mobile subscriber. So, for example, a subscriber would see the standard telecom charges in one section and all DCB third-party charges in another section. All of the products and services purchased via DCB would be placed on the monthly bill, and then paid for altogether.
  • Prepaid: Third-party charges would be decremented from the prepaid telecom account balance. If a subscriber has $80 in his or her account and purchased $5 worth of games and content from a digital storefront, than the $5 would be decremented immediately.

Is Direct Carrier Billing Used Anywhere Else in the World?

Absolutely! DCB adoption is huge in many countries across the world and is especially popular in Europe and Asia. The U.S. is actually one of the last countries in the world to embrace DCB. As brands, merchants and developers understand the growing significance and impact DCB has on the U.S. mobile market, its availability and use continues to grow. Take, for example, this recent stat from eMarketer: mobile game spending in the U.S. is expected to reach $3.31 billion by the end of 2016 – an 8.9 percent increase from 2015. That's not consoles or desktop – it's all mobile! And out of all digital buyers in the U.S., 76.2 percent will use a mobile device in 2016.

How Can DCB Enhance Conversion Rates?

Needless to say, as subscriber eyes shift from print, TV and desktop to mobile, the opportunity to close the conversion loop increases every day. Plus, targeting capabilities like ours let us identify who is interested in purchasing via DCB and who is not. This gives us a connected view of the consumer journey that increases conversion rates and delivers relevant advertisements based on purchasing behavior, driving results for brands and merchants. It’s frictionless. It’s streamlined. It’s simple.

Direct Carrier Billing completes the customer’s mobile experience by reducing clicks and providing a secure payment that requires no sharing of personal credit card information. Mobile Commerce at Pinsight is about more than just payments. It's about creating a cohesive digital journey for consumers and improving their overall experiences, which will be key as DCB-adoption continues to rise in the U.S.

About Kaan Kilik
Kaan Kilik manages Mobile Commerce at Pinsight, overseeing direct carrier billing, A2P messaging, mobile wallets and financial services. Currently he is responsible for product development, partner engagement, operations and compliance, and has P&L responsibilities. Kaan has over 10 years of experience in the mobile industry and was instrumental in the launch of the first PIN-less topup program for Boost Mobile in 2007, as well as led several other mobile commerce initiatives at Sprint. He has a Bachelor of Science in Management Information Systems from California State University and a Project Management Certification from George Washington University.