Carrier billing in India: what is the way forward?

Carrier billing in India - what is the way forward

This month the Indian telecommunications industry was stirred up by a big leap forward. India’s 3rd largest mobile operator Idea launched mobile payments on Google Play. This launch brings all mobile operators in the market significant new revenue opportunities but also creates new payment related challenges.

Google Play’s launch has caused two significant changes to the carrier billing ecosystem in India. First, Google pays developers 70% of the end-user transaction (a global industry standard, also used by Apple and Microsoft). This means the commercial terms for carrier billing in India have now reached the industry standard 70-30 split, partly also thanks to a different approach to taxation described on Medianama.

Besides app stores, such conditions make carrier billing much more attractive also for global digital streaming merchants who cannot go with standard terms as their business model includes paying  royalties to rights owners. With improved commercial terms, carrier billing could now also support the business model of companies like Pandora, Spotify, Netflix and Hulu.

Continue reading on Telecom Lead.


How 5 top digital merchants use localized pricing to boost revenue

When your customers aren’t bound by geography, what price should you charge them?

If you sell any kind of digital media or software, this is a question you have to answer. With more and more people coming online, your next customer might come from any part of the world.

Charging all these customers the same price is neither fair nor effective. A customer in Bangladesh does not have the same purchasing power as a customer in Norway. By charging them a flat price, you will end up overpricing some customers, underpricing others.

One way to counter this is to localize prices for all your markets. This way, customers in Turkey see a different price than customers in the US which matches up with their income.

Below, we’ll show you how 5 top digital merchants use localized pricing to boost revenues and offer a better shopping experience to their customers.

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14 free resources for digital commerce and mobile payments research

14 free resources for digital commerce and mobile payments research by FortumoMaking a business decision can be based on hunches but ideally is also backed up by research and data, correct? While there are hundreds of paid research companies out there focusing on the mobile industry, a lot of information is actually available for free as well if you have the time to dig through it.

We want to make your life a little bit easier and have compiled a list of free data resources across the web that cover general mobile industry trends and specific insights into carrier billing.

Check out the list below. Did we miss any useful resources? Let us know in the comments and we’ll add them to the list.

  1. GSMA Intelligence: GSMA is a telecommunications industry organization with more than 800 mobile operators as its members. Their research portal GSMA Intelligence provides a basic country-level over of telecommunication statistics.
  2. GSMA Mobile Money Deployment Tracker: Another helpful tool from GSMA to get an easy overview of mobile money products and services launched across the world.
  3. Wikipedia’s list of telecommunications regulators: Telecommunications authorities in most countries publish recurring (annual or monthly) overviews of the mobile market, including mobile penetration and mobile operator market shares. Wikipedia lists out most of these regulators, providing a helpful starting point in case you want to take a deep dive into the mobile ecosystem of a specific country.
  4. Google’s Consumer Barometer: Google’s research platform for everything related to the mobile ecosystem. The Barometer provides an overview of general industry trends as well as country-level data on consumers’ mobile behavior, for example you can check out the report on India
  5. World Bank’s Financial Inclusion Database: Information for banking related statistics. For example, their database includes information on debit and credit card ownership in all the markets tracked.
  6. Statista: Free statistics on just about anything related to payments, e-commerce and the digital ecosystem.
  7. Sandvine’s Global Internet Phenomena report: Sandvine profiles global internet data traffic trends in their reports, giving an overview of consumers’ data capabilities as well the digital services that drive the most traffic in each region.
  8. App Annie: Tracking of mobile apps and their revenue; a free account gives access to basic charts on downloads, paid app revenue and in-app purchases by country. Useful for tracking competing apps as well as researching new markets before entering them.
  9. Alexa: Another useful tool for tracking popularity of digital content. While App Annie gives an overview of apps, Alexa can be used to get more information on websites. Their Top Sites overview can be used for example for media planning as well as evaluating competitors’ success in specific countries.
  10. Digital River’s blog: Digital River is an online payments provider and their blog features insights on payments across segments from gaming to travel agencies and retail businesses.
  11. Adyen’s Mobile Payments Index: Another payment provider whose quarterly payment index can be used to assess the popularity of mobile payments across regions.
  12. Allot’s Mobile Trends reports: Research company Allot publishes a lot of reports on the mobile industry, some recent reports have covered customer engagement as well as mobile operator partnerships with over-the-top (OTT) services.
  13. KPCB’s annual Internet Trends report: One of the leading US venture capital companies puts out a very comprehensive (close to 200 pages) annual report on the global mobile industry, a must read for anyone who wants to keep themselves updated on what is happening in the mobile ecosystem.
  14. Fortumo’s ARPPU map and market reports: Last but not least, our own dynamic user spending map gives a historic overview of consumers’ spending in countries that we cover.  Fortumo’s market reports look at regions more specifically and give an in-depth overview of carrier billing in each of the 90+ countries where we provide payments.

Market report: carrier billing in Latin America

Fortumo market report - carrier billing in Latin AmericaFortumo’s latest market report gives an overview of the mobile payments landscape in Latin America. It covers 10 of the biggest countries in the region by population where Fortumo has coverage: Brazil, Mexico, Colombia, Argentina, Peru, Venezuela, Chile, Guatemala, Ecuador and Dominican Republic.

In Latin America, carrier billing is the second most popular payment method for online gaming according to SuperDataResearch. Carrier billing holds a 21% market share among all payment methods, making Latin America the most popular region for carrier billing globally.

This is because bank cards are available to very few people in the region, for example only 32% of people in Brazil and 17% in Mexico have a credit card. At the same time, more than 155 million people already own a smartphone, a number which is estimated to double by 2019. This makes carrier billing the perfect alternative to bank-based payments in Latin America.

If you want to understand the carrier billing market in Latin America better, this market report will give you the following insights:

  • Demographic data, mobile coverage and banking access of each market
  • Spending behavior of users in each market (quarterly revenue per paying user, average transaction size and transaction volume)
  • Overview of mobile operators and their market shares
  • Overview of traffic sources by platform and recommendations for localization

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How to integrate different payment methods into your checkout process?

There are an approximate 1.5 billion credit cards in use worldwide. The total number of mobile phone subscribers, on the other hand, is around 5 billion – a gap of 3.5 billion.

While a majority of Western users have a bank card, in emerging markets most don’t. At the same time, smartphone ownership in emerging economies is growing the quickest. Such consumers need to rely on digital alternatives instead of traditional payment methods (cash & credit cards). For businesses, this shift represents a big challenge, and an even bigger opportunity. Alternative payment methods can be hard to integrate, but offer more convenience and better conversion rates. In many cases, they can also greatly expand a business’ reach, especially in developing markets.

So how can you integrate these payment methods into your checkout process? Below, we’ll show you how businesses across different verticals use mobile wallets, Bitcoin payments and carrier billing help their customers pay for purchases.

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Ad blocking forces digital publishers to rethink their business model

For the publishing industry, smartphones present a challenge and an opportunity at the same time. On one hand, people are consuming more publications online and less offline than ever before due to internet being everywhere. News sites are among the most visited internet pages in India (India Times) and the US (CNN, ESPN) alike.

But the free nature of the internet means publishers are struggling to generate revenue online. While online ad revenue is increasing, it is not big enough to compensate for the decline in print revenue. 40% of publishers report their digital ad revenue is declining or not growing.

In the mobile ecosystem, there are two channels of revenue, often used in parallel: advertising and paid content (e.g. paid apps, subscriptions, paywalls or in-app purchases). Advertising is an increasingly unreliable source of revenue due to banner blindness and ad blocking. Clarity Ray reports that 10% of all ads already are invisible due to ad blockers. At the same time, mobile operators don’t want publishers to use their mobile data traffic for displaying ads and have started blocking advertising.

So what can publishers do to fight the decline in revenue? If the effectiveness and revenue of advertising continues to decline, then the only alternative will be to put more content behind a paywall. Many publishers have also tried and the results have not been too effective.

But the publishers’ approach to paid content has been fundamentally wrong. While people subscribe to an offline newspaper or magazine and read it usually through in one sitting, online content consumption is completely different. Online news is consumed in bite-size chunks, impulsively and at most a few minutes at a time. Subscribing to a monthly service to read one article is counterintuitive.

Yet the subscription model works for music and video streaming. So why is it ineffective for publishing? Because there is a big difference in the consumption behavior of audiovisual content. Netflix users spend 133 hours per month watching movies, Spotify users stream 28 hours of music per month. Consumption is frequent and people want access to the service all the time, with publishing this is not the case. Browsing news takes just 3% of users’ time on smartphones so a subscription does not make sense for consumers.

Rather than asking for long-term commitments from their audience, publishers should take advantage of the impulsiveness of news consumption. This means selling articles one by one for microtransactions (e.g. $0.1) or reducing the duration and pricing of subscription access. We recently also put out a white paper where there’s more information on localizing subscription offerings.

The New York Times for example sells weekly subscription access for ~$1.5. This is already a more logical approach, but they could do one better and also modify the pricing based on each market and the audience’s income. But even with localized pricing, they would run into the issue of lacking access to the only payment method (credit cards) that they provide.

5 million people visit their website from India each month. With credit card ownership at 4% in the country, that means only 200,000 of these visitors would even be able to pay for a subscription, even if they wanted to. This means that beside scaling down the pricing, it would make sense to integrate payment methods more suitable to the target audience. Carrier billing works everywhere, for India it might additionally mean PayTM, for Russia Yandex Money etc.

Credit cards are unsuitable for publishing monetization not only because of their lack of global coverage, they also introduce friction into the checkout process. By asking the user to add their credit card data, the payment conversion is reduced significantly due to consumption of news being impulse-based. Entering their phone number (carrier billing) or logging into their wallet (PayTM) removes that friction and increases the likelihood of purchases.

Asking users to pay small amounts with their credit card is counterintuitive. Microtransactions with credit cards are also often unprofitable for merchants: credit cards payments involve a fixed transaction fee as high as $0.5. In this context, carrier billing becomes significantly more attractive.

We can compare the credit card checkout flow of New York Times to a carrier billing flow. Which of these checkout experiences do you think would convert better for an impulse purchase (click for bigger)?

New York Times credit card checkout flow comparison with carrier billing

With physical publishing in decline, magazines and newspapers need to figure out a way how to grow their revenue online. One way to do it is to review their paid content strategy, modify it based on how users engage with content online and introduce additional payment methods into the mix.

April mobile news round-up: 334 million smartphones sold in Q1

April mobile news round-up decline in smartphone sales after 20 years!

Q1 2016 was historic for the mobile industry: for the first time since 1996, smartphone sales were in decline. But with over 334 million smartphones sold during the period, it’s nothing to be too grim about. Mature economies have reached smartphone saturation and emerging markets will more than likely compensate for it. In other news, Alipay and Amazon are trying to catch up with PayPal and the digital streaming market in Asia is as heated as it has ever been.

Check out the full summary of April below and let us know if we missed anything!

General mobile



Digital content


Fortumo expands in Africa, launching payments in Cote d’Ivoire, Ethiopia and Senegal

Fortumo expands in Africa, launching payments in Cote d’Ivoire, Ethiopia and SenegalToday we are happy to announce the launch of carrier billing in 3 new African markets. More than 52 million people in Cote d’Ivoire, Senegal and Ethiopia can now make seamless digital payments and get the purchases charged to their mobile phone bill. App stores, digital merchants and game developers using Fortumo can now significantly increase their payments reach in some of the most underbanked countries of the world.

In Cote d’Ivoire, Ethiopia and Senegal, the percentage of bank card owners is below 2%. At the same time, carrier billing is available to any prepaid or postpaid mobile account owner. This means merchants using carrier billing can reach a paying audience twenty times bigger than with traditional payment methods.

Quick economic growth coupled with access to low-cost smartphones has positioned Africa as an exciting region for digital content merchants. At the same time, it has been difficult to accept payments from users as the continent is very diverse and fragmented. Carrier billing solves this challenge by allowing merchants to integrate one pervasive payment method which is accessible to any mobile phone owner regardless of their location.

Key information about Cote d’Ivoire (Ivory Coast):

  • Population: 20 million
  • Mobile phone penetration: 86%
  • Fortumo coverage: 65% of mobile users (12 million)
  • Credit card penetration: 1.2%

Key information about Senegal:

  • Population: 14 million
  • Mobile phone penetration: 100%
  • Fortumo coverage: 65% of mobile users (9 million)
  • Credit card penetration: 1.1%

Key information about Ethiopia:

  • Population: 94 million
  • Mobile phone penetration: 34%
  • Fortumo coverage: 100% of mobile users (32 million)
  • Credit card penetration: 0.4%

Fortumo now covers 21 countries in the Middle East & North African region, with 7 countries in Sub-Saharan Africa (Cote d’Ivoire, Ethiopia, Kenya, Mozambique, Nigeria, Senegal and South Africa). We also plan to add additional countries later this year. For now, nearly 600 million mobile users have access to carrier billing through Fortumo in the Middle Eastern & African region. Additional data and insights into the region’s carrier billing ecosystem can be found from our recent market report on Middle East & Africa.

Want to launch carrier billing in the new African markets and 90+ other countries globally? Sign up for an account with Fortumo for free!

White paper for mobile operators: keeping up and profiting from the digital ecosystem

White paper for mobile operators - keeping up and profiting from the digital ecosystem

The usage of OTT services (video and music streaming, app stores, social networks, IP-calling) is growing. As a result, mobile data consumption is in exponential growth. This requires carriers to increase investments into their network infrastructure.

But the prevailing digital ecosystem model generates no profit to carriers. Services such as Skype, WhatsApp and Facebook Messenger are eating into revenue from calling and messaging. In parallel, the global telecom industry’s ARPU declined by 4.5% in 2014 and 2.8% in 2015 due to growth in emerging markets with lower user income.

In our latest white paper, we present a solution on how carriers can grow their ARPU from digital subscribers by 25% on average. This can be achieved by connecting to app stores, music and digital streaming merchants to carrier subscribers.

In addition, we explore the $626 billion mobile commerce industry and how carriers can take advantage of partnering with existing financial technology companies (digital wallets and credit card providers) to generate additional revenue from new business lines.

Carriers will find the following useful information from this white paper:

  • Changes in the digital ecosystem and its impact on the telecommunication business
  • An overview of benefits in direct monetization of OTT partnerships
  • How implementing carrier billing in new digital segments (app stores and streaming services) grows a carrier’s ARPU by 25% on average
  • An estimation of revenue impact from partnerships with financial technology providers and the technical commercial requirements for entering these new segments

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Refunds and carrier billing: how to keep your customers happy?

Refunds and carrier billing how to keep your customers happy

Consumers ask for refunds mainly because of two reasons. Either they changed their mind about something they purchased or they were charged but did not receive the goods and would like to be refunded for the amount spent. When something like this happens, what do you do?

Before launching an online business, you should have a refunding process in place. For example, Google refunds all apps purchased from Google Play within 2 hours of purchasing time if the user has changed their mind. After this period the developer of the app is responsible for deciding whether the user is eligible for a refund. This approach provides a balance between keeping customers happy and avoiding an overwhelming amount of refund requests.

In addition to having an internal refund process, you should also clearly communicate your policy out to users. If a user cannot easily find information about how to request a refund or how to cancel a subscription, they will turn to their bank or mobile operator and demand the refund from them. In this case, your reputation with the payment provider is at stake and you might even risk losing your billing provider. Therefore, your checkout and refund flows should be built up in a way that the user knows to turn to you at first when they want to dispute a charge.

Refunding is expensive: you need not only pay the user back the money that they were charged but also pay a transfer fee. In general, bank transfers should be used as a last resort as their fees are the highest. We recommend using wire transfers as a last resort option, instead it’s more cost efficient to use PayPal and local alternative money transfer methods.

Due to the high cost of refund fees, you should initially offer the consumer an alternative benefit instead of a refund. For example, if you have a music subscription service, you can give the user 30 days of free access. If you are developing an online game, offer the user virtual items inside the game. In case of carrier billing, you can use Fortumo’s voucher distribution platform and create a batch of free service vouchers for potential refund cases. You can also consider benefits not related to your service, for example an iTunes gift card.

If the user accepts such an offer, their experience with you will be positive and they might become a paying user again in the future. In addition, you do not have to deal with the hassle and cost of going through a refund.

The recommendations above are meant for cases where a user has made a purchase and changed their mind afterwards. But what to do if they have made the payment but have not received what they paid for?

Carriers and Fortumo make the best effort to notify you after a successful payment but sometimes things just go wrong. For example, there can be a hiccup between Fortumo’s server and yours. In case of a charging error, you should simply try to give the service out again instead of offering a refund.

You can do this by implementing a feature to your platform through which you are able to manually deliver goods and services to your users, separate from the automated carrier billing processing solution. This is the quickest way to keep your paying users happy as you do not have to rely on Fortumo or the mobile operator investigating the transaction or confirming the purchase from our back-end again.

But if the user is still determined to get their money back and give up whatever it is that they purchased, it’s best to manage the refund yourself. The longer the refund process takes, the unhappier the customer will become. But before you try sending money back to the user, make sure you have all the information necessary for a successful refund. If the payment bounces back, transfer fees will be charged. The key things to consider are:

  • Correct spelling and contact details of the user (for example, the user might give you a Western name while their bank account name is in Cyrillic or Arabic script)
  • User bank’s ability to accept currency that you are sending the refund in; if a user in Brazil has a bank account that only accepts incoming Brazilian Real payments, your payment in U.S. Dollars will bounce back
  • Including the transfer fee in the refund amount; if you only wire the cost of the item purchased, the user might receive less money than they paid and will end up unhappily coming back to you

Refunds are an inevitable part of processing payments. You should try to keep them to a minimum by establishing a reasonable refund policy and trying to offer alternative benefits to users before proceeding with refunds. Using Fortumo’s turn-key products also helps reduce the amount of refunds as the checkout process has been optimized to make sure the user clearly understands what they are buying.