In series of interviews about key telemedia areas, we talk to Kevin Dawson, CEO of Dynamic Mobile Billing about how payments have changed over the past 18 months and where they go next
TELEMEDIA NEWS: How have the types of billing services used by consumers changed over the pandemic – and why?
Kevin Dawson, CEO, Dynamic Mobile Billing: I think the cultural shift in the last 18 months can be assessed most vividly if you look at the payments landscape. We have all seen a rapid transition from a blended purchasing mix of cash, cards and digital wallets to what has now become an almost entirely ‘alternative, online and digital payments landscape’, the fast evaporation of cash purchases is clear
In just 18 months, we have seen quite an evolutions from merchants around payments. In 2019 the vast majority were happy and willing to accept cash, now a large proportion of merchants default a preference to ‘anything but cash’. Cards, wallet based payment solutions (including mobile payments) and other digital alternative payment forms are winning.
TM: Has DCB taken off – and if so why?
KD: Yes, DCB has absolutely grown and this is due to a number of factors such as regulation and mandates, the wider adoption of new handsets amongst consumers and the ever-increasing movement to ‘online’ purchasing behaviour. However, it is still facing a number of challenges to really scale to its real potential. This is a big industry challenge to overcome, or alternatively we can simply accept we ‘best serve’ only some part of the wider payments system but are not necessarily suited to all.
I believe greater consumer education with drive more adoption. The benefits in ease of use, convenience, security, privacy and being (near) universally inclusive are very relevant to most, yet the understanding and awareness of DCB is still quite primitive. Consumers commonly believe, that despite going through a formal payment process with clear, transparent and proximate price warnings, as well as two-factor authentication and direct receipting via SMS, that they cannot make a transaction to their own mobile phone bill.
They often do not dispute the purchase flow process undertaken, but then do not register such actions with a charge actually being generated. If the MNO’s are to focus and scale DCB as a new (significant) revenue stream, then (as the owners of the consumer trust and confidence) they must also spearhead a ‘greater education of the masses’. The ROI potential for them is enormous, it would provide an substantial ‘new revenue stream’ opportunity for them (from existing assets and infrastructures) if they can effectively support mobile payments growth in the mainstream payments landscape.
Through their accredited payment intermediaries and aggregator partners, they have a pool of knowledgeable, skilled and trusted channels to market. Those channels need dedicated and focused support to really scale DCB and mobile payments to full potential. That will require some revision (and balancing) between the educational, commercial and regulatory elements in going to market, but I do feel this opportunity is very possible with the correct, collective engagement and planning across the value chain.
TM: What happens next? Will digital billing continue to grow? What does DCB have in store – or will it be surpassed by other things (Bank transfers, third-party payment apps etc)?
KD: For all the great reasons already mentioned (convenient, secure, private, universal inclusion) then I both hope and predict a very positive future for DCB and mobile payments as a whole. As within every eco-system, some mechanics with grow (and I predict DCB will do exactly this) and some will naturally decline.
The ‘winners’ will undoubtedly be the solutions that can best keep the consumer relevance at the centre of its evolution and growth. I believe that mobile payments are still only at the tip of the iceberg in regards to scope, but we need to evolve to a position for renewed creativity and innovation, as otherwise mobile payments (and specifically DCB) will rapidly become a ‘burnt out’ mechanic through over-regulation and restraint.
Overall, I am actually quite encouraged by new payment developments and how new alternatives generally disrupt things, as this keeps marketplaces fresh and evolving! The innovations around Cryptocurrency (now a regulated and formally recognised currency in El Salvador, alongside the US dollar, so will more Countries follow a similar approach?) demonstrates how markets can quickly change. The rapid decline of cash was long spoken of, but without an impetus for change. Now it has happened in less than 2 years, primarily driven by the COVID19 pandemic impact.
Open banking offers very positive, regulated and consumer permission-based indications on the future of innovation and growth in payments. It also acts as yet another very clear sign that mobile (as a payment form) must adapt now, to stay relevant in tomorrow’s payment landscape.