Voice For Mobile Carrier
Multiple industry studies over the years show how direct carrier billing and mobile money services give consumers worldwide the ability to participate in commerce without the need for traditional financial offerings such as checking accounts and credit cards.
As consumers continue to adopt both payment methods in droves, mobile network operators who provide and support such services have found a consistent revenue stream as they deal with dwindling returns from voice and messaging services.
The combination of these two trends has given one long-time industry supporter the idea to explore the formation of a group that would help promote the benefits of direct carrier billing and mobile money services worldwide, Mobile Payments Today has learned.
John BaRoss, who at one time was the head of e-commerce at ClickAT&T, has a vision for an organization that taps into the knowledge of different industry players to be an advocate of sorts for direct carrier billing and mobile money services, two forms of mobile payments often overlooked in favor of NFC-based systems.
BaRoss’ objectives for the organization are a work in progress at this point, but it’s clear he wants the group to focus on areas such as financial inclusion, helping governments to understand the intricacies of direct carrier billing and mobile money services, and perhaps one day being in a position to help create industry standards that all MNOs can follow to improve consumer adoption and the overall experience.
“The challenge is for the new entity to have complementary, ongoing industry impact by optimally tapping the aggregate industry knowledge, insights, visions, and passions from stakeholders in all nations and across all entities in carrier commerce ecosystems,” BaRoss told Mobile Payments Today in recent interviews. “A model that optimizes industry access will optimize access to industry brain power and experiences.”
BaRoss over the past six weeks has communicated with a number of industry executives about his idea, and many of them believe such an organization can be beneficial if done the right way.
“The importance of having such an influential association will act as a guide, neutral and as a man-in-middle, to reduce the knowledge gaps with regulators, industry actors and other stakeholders,” Emmanuel Okoegwale, principal associate at Mobile Money Africa, told Mobile Payments Today in an e-mail. “While regulators are really concerned about the systemic risk of certain players enabled for some important roles in the financial services space that is not their traditional core area, the association can provide the needed research, drive and hand-holding processes, to ensure certainty to a large extent and adequate risk appropriation in the industry.”
BaRoss cited a recent situation in Uganda to support Okoegwale’s view about regulatory obstacles.
A Ugandan judge ruled last month that mobile money operations are illegal in the country because the telecoms who offer such services are not licensed by the state bank to provide financial services.
“This example illustrates how the new industry association could be designed to tap the eventual aggregate member base in a timely manner to help industry colleagues (in this case, five MNOs in Uganda) overcome challenges like that Ugandan judicial ruling,” BaRoss said. “Since carrier mobile money operates today in about 60 countries, the probability of this similar issue being encountered already could be high, so the membership could conceivably help colleagues in Uganda.”
Direct carrier billing faces similar challenges regarding regulation and best practices.
Charmaine Oak, who is the cofounder of digital money consultancy Shift Thought and a former Orange executive, spoke to Mobile Payments Today about an infamous situation in the U.K. that involved a ringtone and excessive billing from MNOs.
Crazy Frog was a catchy, and by some accounts annoying, ringtone that a provider named Jamster frequently promoted on television in the mid-2000s. Consumers who purchased the ringtone also received additional texts from Jamster to purchase more content. But little did consumers know at the time MNOs charged consumers for each additional Jamster promotional text.
U.K. regulators eventually reprimanded Jamster and messaging provider mBlox.
“This was something that really set the industry back because it became a highlight of the industry misusing [direct carrier billing] and carriers had to draw back a bit,” Oak said.
While direct carrier billing has come a long way since then, some observers believe the industry could always use a helping hand.
“When it comes to carrier billing, yes, the space could benefit from standards,” Jim Greenwell, president and CEO of Danal, told Mobile Payments Today. “And I don’t know if it’s a global standard. It could be a regional play.”
As one of the leading providers in the industry, Danal provides carrier billing services for over 220 carriers across more than 80 countries.
Greenwell said Danal helped establish some standards in the U.S. and South Korea. He believes all MNOs should work together to build a foundation of certain requirements when launching direct carrier billing and mobile money projects.