Imagine if you could use carrier billing to buy physical goods? Well, thanks to some clever thinking, it may yet be possible. Paul Skeldon finds out how
Charity has long been a fan of carrier billing for donations. In many ways, the charity sector has driven the acceptance of carrier billing to the point where today it is being talked of in glowing terms across a range of sectors (see pages 1-7). So what if you could take carrier billing that step further and see it used to (audible gasp) buy physical goods?
That is exactly what Chris Newell’s team at Donr are looking to do. While Donr has been set up to build a great mobile donations platform for charities, it has also worked very hard to come up with a way of letting users use carrier billing to buy things.
“Many of our charity clients love using carrier billing to get donations – even long running regular donations,” explains Newell. “However, many of them want to follow up donations with the ability to sell goods: a red nose, a wristband and so on. And they want that to be mobile and a direct follow on to what they have just done using carrier billing.”
This, of course, would typically mean that any charity that wanted to look at upselling a donor to something tangible as part of the SMS flow can’t – they would have to switch them out to a webpage with other means of payment, since carrier billing can’t be used for physical goods.
So how has Donr got round this? Well, it is simple and complicated all at once. Concentrate.
In essence, what Donr does is create a virtual gift card – which is non-physical and so can be bought using carrier billing – that is then used instantly to buy the goods from the charity. The carrier, which has essentially provided the ‘credit’ to buy that gift card then sorts the money and forwards it on, minus its DCB charge, to the charity under its normal Ts and Cs. The carrier then recoups this ‘credit’ on the user’s bill as it would with any other DCB transaction for anything non-physical.
Newell uses the analogy of shopping in a store. “It is like me going into Waitrose and buying an Amazon gift card with my Amex card,” he says. “I can use that Amazon card to buy whatever I like, with Amex having paid Amazon for it then charging me. In this scenario, Waitrose is the charity and Amex the carrier.”
In Donr’s model, the ‘virtual gift card’ exists for a split second before being redeemed to buy what it is the customer is trying to buy from the charity. It effectively makes it possible to buy physical goods.
The key thing is that Donr has an e-money licence and so can do this with the money protected by e-money rules. This is what makes it possible and why it could help propel carrier billing to bigger things. Right now, says Newell, carrier billing is reaching just a fraction of its potential.
“The PSA protects the consumer experience,” he says, “but the Financial Conduct Authority protects the funds.”
While this is a big deal for the charity sector, the model is one that could catapult carrier billing into a whole new dimension. While ideal for selling digital engagement and digital services, the potential to sell things too through a virtual gift-card model could transform how it is used.
That could not only see it start to proliferate as the way to pay – as it is quick and easy – as well as, with volume, start to see it become a means of payment that starts to be comparable with credit and debit cards in terms of charges – which will lead to more merchants in more verticals looking to use it.
From a consumer point of view, this offers the potential to revolutionise mobile content consumption and m-commerce. But, for now, it could be something that revolutionises charity donations and once again shows how charity can not only do good in society, but also can help to develop new ways to use technology.