Carrier Billing and the Path to Innovation
This article was originally published in The Paypers.
Smartphone penetration in Europe reached 85% in 2023, setting the stage for innovative payment solutions like carrier billing to flourish.
The rise of carrier billing and its limitations
In recent years, carrier billing has emerged as a convenient and efficient payment method, allowing consumers to charge purchases directly to their mobile phone bills. This method has gained traction across diverse sectors, from iGaming and entertainment to EV charging and transportation services.
Introducing the agent model
Recognising the need for innovation to overcome these challenges, the agent model has emerged as a transformative solution within carrier billing. This model enables Mobile Network Operators (MNOs) to act as payment agents under licensed service providers, thereby breaking traditional barriers and expanding carrier billing capabilities.
What is the agent model and how does it work?
The agent model empowers MNOs to facilitate payments on behalf of DIMOCO for both physical and digital goods. It allows for greater flexibility and scalability in carrier billing, catering to a wider range of payment needs in today’s market.
Legal framework and compliance
For instance, the agent model that allows for increased payment thresholds, as well as the purchasing of non-digital goods, allows for the responsibility to be compliant and sticking within the legal framework to DIMOCO Payments. The mobile network operators work as agents and, therefore, do not have any liability.
Operational mechanics
The figure below details the process flow of the agent model in carrier billing transactions. The operational setup does not change from the usual carrier billing infrastructure.
Impact and use cases
The agent model has unlocked new use cases across industries such as retail, entertainment, and transportation.
In Germany, DIMOCO Payments is working with the leading MNOs to bring carrier billing to a wider audience. This initiative comes under the brand Zahl einfach per Handyrechnung – Pay easily with mobile invoice. Through this one brand, consumers can pay for a variety of goods and services and have the costs added to their mobile phone bill. It is active in the mobility sectors, through rentals and EV charging, as well as in vending machines, where hungry passers-by can grab a snack. Through our work with a leading EV charging company, m8mit, we can see that 28% of ad-hoc charging uses carrier billing.
In Poland, we have introduced sports betting to carrier billing. Our partnership with STS allows people to place bets on matches and tournaments by using their mobile phone. With the EUROs fast approaching, carrier billing and the agent model represent the perfect partners to make the most of the sporting event.
Who is using the agent model?
Leading the charge in adopting the agent model is DIMOCO Payments, alongside key players like BOKU. Strategic partnerships with MNOs have amplified the reach and effectiveness of the agent model across different markets.
Future prospects and innovations
Looking ahead, carrier billing with the agent model is poised for further growth. With 5G providing faster access to the Internet and IoT connecting more and more devices, this model is expected to become even more efficient and secure, catering to emerging sectors, both in the digital and physical realm.
The future of carrier billing
The agent model represents a significant step forward in carrier billing innovation. Its transformative potential is reshaping the payments landscape, offering consumers and businesses alike a versatile and reliable payment solution.
As carrier billing continues to evolve with the agent model at its helm, we anticipate a future where payments are not only seamless but also highly adaptable to the evolving needs of digital commerce. By shedding light on the agent model’s impact and potential, we aim to inspire industry stakeholders and consumers to embrace carrier billing as a cornerstone of modern payment innovations.
