Carrier billing promised so much 18 months ago, but rules, regulations and some good old scams got in the way. Now MNOs are looking at new ways to make it work. Paul Skeldon takes a look a Project Slimline and wonders is this will be what m-payments needs or whether, if it doesn’t work, it’s game over
There are changes in the telemedia industry in the UK that are potentially the most seismic that have ever been seen. As we have seen on page 1 and page 6 of this very issue, Phonepay Plus is in the process of changing a lot more than just its name – it is looking to radically shake up the way PRS in the UK is regulated.
Off the back of this change – which essentially boils down to not treating all services the same and viewing some as less risky to consumers than others, as well as trying to bring PRS regulations into line with all the other regulations out there that also impinge on these services – network operators in the UK have done something almost unprecedented: they are looking at changing the rules.
While Phonepay Plus is delving into trying to make the regulatory world a bit easier for mainstream services to navigate – as part of its pledge to try and use regulation to innovate rather than stymie the industry – MNOs have been inspired to take a similar approach and look at how they can make it easier for businesses to use Payforit.
“When we go an pitch Payforit to many new organisations as a simple and quick way to charge things to mobile and make check out a lot easier they all get it and are keen to learn more,” says Kevin Dawson, sales director at Oxygen 8 Group. “But once we show them the rules and regulations around making it happen its like dropping a massive book of rules on the desk: boom. And they immediately realise that to make this work they have to create a whole department that will manage it. Suddenly it’s a lot less attractive.”
This problem has been echoed across the industry for more than a year – ever since MNOs decided that Payforit was generating too many complaint calls – off the back of just one or two rogue services – and made it almost impossible to use outside of the traditional PRS world.
Any one who looks into it further also only finds horror stories of how it can go wrong and again they don’t want to know.
“Most brands don’t really think about how payments works – they just want to plug it in and start making money. Payforit and carrier billing is really easy to plug in and get going; it is also very simple and clear for consumers to use; and payouts are now really good and comparable with credit card. It’s just the regulation and hurdles are so tough that no one wants to use it when they see the hoops they have to jump through,” says Dawson.
So what exactly does Project Slimline involve? Currently, it is just a proposal that has been looked at over the summer and which is out for consultation among interested parties, such as industry trade body AIME.
Essentailly, what the MNOs are proposing is to take the idea of different levels of service risk proposed by Phonepay Plus’s Project 30 and apply that to how the Payforit scheme is run. This means that, for reputable brands running low-risk services, the onerous cocktail of rules and stipulations around implementing the Payforit scheme – as well as on screen wording etc… – can be largely taken away.
Under the proposal, services would be categorised as:
- High risk services – these are the competitions and services that PPP keeps a close eye on and which sale close to the wind in terms of wording and how they work. Many of these services are ones that consumers are driven to by advertising and affiliate marketing and carry some risk. These services would be subject to the full level of PPP scrutiny and the current strict rules and regulations. They would also be very closely policed.
- Standard services – these are the services that people are happy to use and readily and voluntarily use (so they aren’t driven there by advertising or links). Here the consumer is likely to be more trusting and the brand more trustworthy (my words, not PPP’s nor the MNOs’) and so the standard wording and Ts&Cs can be delivered via the Payforit screen schemes. This means that just two screens are needed to complete the payment, making it much more likely for the consumer to complete.
- Low risk services – These are seen as services that consumers will be logged into and have already accepted all Ts&Cs and so can just hit Pay and use Payforit as a one click payment tool. This is the sweet spot for many as it opens up carrier billing to a much wider market of merchants and consumers and really plays into showcasing how easy carrier billing should make mobile payments.
It is this latter segment – and to some extent the standard services segment too – that makes Project Slimline interesting as it puts carrier billing up their with the super-easy-to-use m-payment tools such as Apple Pay and Android Pay, as well as Amazon one-click. It also makes it so much less difficult from a regulatory point of view to introduce. And, in theory at least, should not generate the vast number of complaint calls to MNO call centres as it would be used by reputable brands, in a reputable and transparent way that consumers understand.
Lemon or lime?
But will it work: is Project Slimline’s plan going to create the potential for Payforit to compete in the fast evolving world of mobile payments, or is it going to be another lemon and its game over for mainstream use of these services?
AIME’s MD Rory Maguire is optimistic. “I think this could work and we have been working with the MNOs to make it happen,” he says. “Interestingly, there has been a change in attitude and approach to carry billing in certain MNOs that has really helped to move this along. The time is right to get this working and it has great potential. Along with PPP’s Project 30 this is a really interesting time for telemedia in the UK and mobile payments.”
Oxygen 8’s Dawson is less convinced. “I really want it to work and I am cautiously optimistic, but there is also a sense that it’s this or bust for a mainstream role for carrier billing. We are pushing it still, but we are also very much on to the e-money licence route too to tap into mobile payments for real world goods. I want to hear more before I get excited and so far MNOs are telling us very little about how this would actually work in practice.”
Dawson is going to have to wait until October to learn more: that is when more details are likely to emerge as interested parties meet to assess the proposals in detail, but AIME’s Maguire is optimistic that there should be some movement on what is going to happen by mid-October.
“Hopefully there will be much more to say about this at World Telemedia in Marbella,” he says, “and we could see this in use by early 2017.”
Gin and Slimlines all round if that happens.
Why this is important?
This has, consequentially, seen Payforit almost drop out of the land grab in mobile payments. The move by MNOs to try and get this back in track – called Project Slimline – is a welcome move to try and get it back in play.
And there is everything to play for. The mobile payments space is burgeoning right now and competition is hotting up. Apple and Android Pay are both going live as ways of doing one click, finger print authenticated ways to pay for online goods using a mobile this Autumn and there is every reason to believe that, between them, these two behemoths can stitch up the mobile payment eco-system front end by Christmas.
But the likes of Amazon and PayPal aren’t going to go down without a fight and they are both making moves to, in Amazon’s case, shill out its One-click payment platform to third parties while PayPal is doing all it can to make itself a simple, integrated one-click service across web and mobile too.
Carrier billing has to fight its way into this congested market and do battle with three of the world’s global superbrands. Can it do it? Of course it can – so long as carrier billing is simple and safe to use, it promoted well and actually works.
And this is where the circle needs to be closed. Project Slimline should make it more attractive for big brands and merchants to start using Payforit, but they too have to be confident enough in it to promote it to get critical mass. Interesting times lie ahead for carrier billing and mobile payments.