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GUEST COMMENT What is carrier billing and how is it going to change iGaming?

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The current online betting and iGaming space is tough, saturated with big and small brands, scoring a dissatisfying average of only 40% active players. So, how do you feel about bumping that number up to 100%? Beyza Orazova, Business Development Manager, iGaming, DIMOCO, explains how direct carrier billing holds the key

Imagine you own a football club consisting of 11 great footballers. You hope that they could potentially lead you to, let’s say to the win of the Premier League. But right before the crucial match, five of them do not show up and only six of them actually hit the field.

Would you accept that? No?

Then why are you accepting that more than half of your players don’t ever make a deposit?

Direct Carrier Billing – a fix that will change the way you look at a payment method from being just a solution of money transfer, to the real growth driver and powerful conversion tool.

Let’s take together a glance at today’s payment landscape in gambling sphere. Currently, there are several widespread payment options out there, bank transfers (for each geo), mobile banking apps, eWallets, credit cards, debit cards, all targeting the same exact category of players, which is predominantly male aged between 25-40 has a bank account, usually more than one.

Regardless of the perspective, the earlier mentioned payment methods are all in the battle for the same category of players and, almost in apparent contradiction, today’s betting industry is completely driven by two main drivers: innovation and mobile first experience.

So why is Direct Carrier Billing anticipated to outperform these payment options?

The iGaming industry is rediscovering a payment option that in fact was always available, lucrative, but often overlooked: Direct Carrier Billing. The payment method started off its road to success supporting customers providing very first mobile content types, such as ringtone purchases and wallpaper updates, more than 20 years ago. Now, decades later, influenced as well by the introduction of PSD2, Direct Carrier Billing has again transformed back into a leader for mobile purchases, even becoming one of the top three payment methods on Facebook.

So how does DCB work?

So how does DCB work? This alternative payment method enables end users to for example purchase game credits for a game – such as on Facebook for Clash of Clans –  order a video or music streaming service – such as via HBO, Netflix, Spotify – or pay for a parking ticket. Upon checking out, they are given a number of payment options.

Further to the more conventional methods of credit card and PayPal, etc., the end user may also be given the option of paying for the service via their mobile phone invoice or pre-paid credit. The mobile driven solution is available on all mobile devices, the end user only requires a SIM card.

A one-click purchase with a most friction-less player journey offers users convenience like no other payment method. After selecting ‘Pay by Mobile’, given the player has enabled his 3G Data connection, his device’s phone number will be automatically detected by the network and utilized to complete the payment. All that is left to do is to confirm the payment by a single click and user receives the credits on his account, in addition to an SMS bill stating the purchased good. In the event that the player is connected to WiFi instead of his mobile data, his phone number can still be detected in a registered account, pre-filled in to the payment page, all while not sacrificing on the player’s convenience.

So, to recap, the chain is made up by a telco (the provider of telecommunications services), the gambling operator and a DCB vendor, such as DIMOCO, connecting the two and transmitting information.

However, the DCB vendor is capable of providing you far more than just facilitation of money movement. Besides being convenient, seamless and instant, there are two facts that turn this mobile payment solution from being a ‘nice to have’ option into your strongest tool in your conversion strategy and churn. It’s POWERFUL AND it’s COMPLIANT.

Direct Carrier Billing is POWERFUL

Let’s start with a simple question. Do you remember your bank login details by heart? Do you remember your phone number?

I think you see where this question is going. You, like almost all casual players, are far more likely to remember phone digits. And this is the beauty of Direct Carrier Billing.

In order to demonstrate the potential of DCB, imagine the following situation: Pete is a huge Liverpool FC fan and holder of a season ticket, good seats in the Kop by the way! Pete is having the time of his life at the stadium. His gut feeling plus the three beers at the pub he downed earlier on tells him that his team is going to definitely win today.  Seeing all the banners ads reminds him of his betting account he created a while back. He takes the phone, wishing to place bet. Having to enter his full name, credit card number, expiry date, authorization code is simply too much and too distracting from the action, Mohamed Salah nearly scored a goal! So, naturally he leaves the site and forgets all about it.

A conversion offering a one-click solution would have been a save bet for the betting merchant!

Currently, sportsbook operators invest huge amounts into advertisements, half-time commercials, branded jerseys and much more, creating excitement, sparking interest but give no option to spectators to make a deposit without pulling out a credit card, entering email address and password from the wallet, entering the banking details. Which seems daunting enough even when not matching a live game.

The user’s average retention period on your website is approximately seven seconds. You can heavily influence what happens within these seven seconds – the user can look for his login details, search for his card in his wallet, or to press a button and confirm a payment.

If a player loses interest, he will eventually land in your churn group, leaving him in the company of others whom you’ve lost to a lacking variety of payment options.  41% of players consider the ease of deposits to be one of the most important factors when deciding to try a new betting platform.

ROI is naturally and frequently a hot topic in our iGaming industry. It is no secret that player acquisition is the biggest investment most merchants, including yourself, make. With a regular acquisition campaign, a single player costing you 100 EUR CPA, probably an understated figure,  it’s ironically a gamble in itself. Giving your churn group an opportunity to experience the deposit process differently will allow you to use the in-house resources and bring long gone players back to the game.

According to PwC 2019 consumer behaviour research 55% of online consumers believe that mobile payments makes buying and paying less complicated 70% of users under 40 intend to use mobile payment once it is made available to them 47% of those users also prefer mobile payments because they no longer have to check if there is enough cash in the wallet, account or pocket.

It becomes obvious that users online are becoming more educated and aware of different options, ease of use and variety, they want to see them all.

Now let’s get to the most intriguing part- COMPLIANCE

At DIMOCOa licensed (and regulated) payment institute by the Austrian Financial Market Authority, we remain within the frames of every gambling law of all the countries we offer our products in. We align our activities with local gambling regulators, telcos and financial regulators. Therefore, besides having the right to operate, Direct Carrier Billing means:

An end user is identified – upon receiving a local phone contract with a telco, every end user is required to pass a KYC check. Being one of the most crucial points, it assures the deposit are not done anonymously, at least not anonymous to the operators. In addition, the telcos also have the ability of recognizing +18 users, which is another layer of security before processing the payment.
A payment cap of EUR 50 per transaction allows you to be responsible and create a controlled environment for punters for impulse payments. Additionally, and in accordance with PSD2, an additional monthly limit of EUR 300 is set, guaranteeing that players will be never face situations of overly accumulated bills.

SCA, an industry buzzword in the last few months. It applies to all online transactions and the regulation affects the entire payments industry within the European Economic Area (EEA). With DCB however, none of the transactions require SCA. While you might see setback with other payment methods in your revenues, after the implementation of SCA due to higher friction, Direct Carrier Billing will remain simple, secure and accessible.

Unless the person attempting fraud actually has the victim’s device, it cannot be committed. This means that as long as consumer’s devices are safe, the risk of fraud occurring is greatly minimized. For additional security, DIMOCO’s very own smart transaction monitoring system keeps all transactions under control with default and customizable features like roaming tracking, location, deposit frequency etc.

A good example is the UK market with one of the strictest gambling regulations in the world. Direct Carrier Billing has expanded greatly over the last few years and continues to thrive to this day.

According to Annual Market Review by Mobile Squared, over 1,000,000 users have also used DCB as their preferred payment method while betting online, reading news online, purchasing dating services or adult content.

Betting also became third largest category of services by Year-on-Year growth rate of DCB users with 22%, giving way to charities (36%) and entertainment (26%). Direct Carrier Billing in its large application is relatively new to the betting industry, but there is a great amount of possibilities behind. As already mentioned, DCB is not just a payment method, a DCB vendor’s direct connection to telco providers allows us to be agile and innovative, starting from big SMS campaigns, up to elaborate targeting, based on that you’ve chosen the right partner.

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Paul Skeldon

Editor and content creator for Telemedia – for 18 years and counting

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