Carrier billing provider Boku has partnered with UK mobile network operators O2, EE and Vodafone to make it possible for customers to charge public transport tickets, takeaway food, cups of coffee and other “click and collect” physical world purchases to their mobile phone bill.
Boku has been providing carrier billing for digital content purchases for five years and works with 260 carriers around the world. It has made the move into physical world payments after getting an e-money license that enables it to operate outside of the European Union’s Payment Services Directive (PSD) regulations, which limits carrier billing purchases to digital content.
Boku plans to extend the solution to other “major MNOs” and is working with mobile ticketing app provider Corethree to roll out the solution to transportation operators in the coming months.
The e-money license “means that we can now sell anything using direct carrier billing, rather than just being limited to digital goods,” James Patmore, Boku’s senior vice president of global carrier relations, explained to NFC World+.
“We’ve got a list of target merchant verticals that we’re going after, basically focusing on transactions which are lower in value and also transactions which add a lot of convenience for consumers like buying a bus ticket, helping users to buy a train ticket when they’re queuing up at the train station, buying a coffee when they’re on the move, these types of things,” Patmore added.
“The main thing that’s been driving ecommerce recently is mobile commerce, so consumers buying services and goods from their mobile device. What you find is that, whilst mcommerce is growing very rapidly particularly in the UK, one of the problems is that users are typically browsing for products but they’re not buying at such a high rate as they would do in ecommerce.
“Typically it’s about 50% lower on mcommerce, the conversion rate, to ecommerce. So that’s where we come in. If you’re browsing for goods, it’s much easier to pay via direct carrier billing than it is to use your credit card so we’re focusing primarily on companies that have phone applications who are selling physical goods or services.
“So, for example, buying bus tickets or buying a train ticket or maybe ordering coffee on the way to a store and picking that up when you get there, or ordering a food item on the way to a takeaway restaurant and picking it up when you get there, so those type of services. About 25% of click-and-collect purchases are now made via a mobile device and we think this will be a great mechanism for that.”
“From a technical perspective, the technical connection we have with the mobile network operators remains almost exactly the same, perhaps we need to make a few minor adaptations at the backend. Also, importantly, the consumer experience remains the same.
“The big advantage of mobile direct carrier billing is that the consumer does not need to register to use the service so effectively you’ve got about five or six billion consumers globally who can use the payment mechanism.
“And, also, the consumer doesn’t have to fill out long forms with their credit card details or remember their PayPal password for example. So, effectively, the consumer can open up a mobile device, make a simple click and they can make a purchase without registering — and that’s a big advantage.
“From a legal perspective, we’ve had to make some alterations to our legal agreements with the carriers so that’s where the real trick lies in terms of making this work and so, effectively, Boku is an e-money issuer and the mobile operator becomes our distributor.
“Boku’s role historically was to act as the intermediary between the merchant and the mobile operator, that’s our job… We’ve signed up 2,000 digital merchants to our network which we distribute in 78 countries with 260 mobile network operators. Now we are signing new types of merchants under our new e-money agreement.”
“I think we will look at physical point of sale in retail in the future but that’s not our primary focus. There’s no reason why this service could not sit behind say NFC technology and you could use NFC and then direct the transaction to the mobile carrier bill. There’s no reason why you can’t do that technically, but it’s just not our primary focus. We may well look at that in the future.”
“Because we passported our e-money license to every European Union country, we’re also in the process of rolling out the service across Europe at the moment so that the service would be available in a number of European Union countries, not just in the UK,” Patmore said.