Mobile Billing, Carrier Billing Versus Premium SMS

When it comes to mobile billing, there is more than way to peel an orange. It seems that people are divided into two camps concerning their preferred method of payment - some think carrier billing is the way to go while others support billing via premium SMS.

What is the difference?

Premium SMS is seen as the more traditional way of buying mobile goodies such as ringtones and games. It can be a once-off purchase or a recurring one, but the payment is immediate. Direct carrier billing adds the price of the content to a user's mobile bill, so in a sense the user can "worry about it later." A user can opt for payments via credit/ debit cards or a paypal account as well.

How do the different types of mobile billing compare?

1. Premium SMS

Pros:

Available to all mobile phone usersWidely used, customers are familiar with it and know what to expect

Cons:

Multiple steps needed to make payments resulting in low conversion ratesInability to support refunds or receiptsNo guarantee SMSs will get throughUser mistrust of making larger purchases via SMSConsequent fraud risk

2. PayPal, credit and debit card payments

Pros:

Secure (if properly implemented)ReliableSupports refunds and itemisation

Cons:

Can require multiple steps and cumbersome data entryUsers don't trust just anyone with their personal informationNot available to unbanked customers (a lot of users in third world countries don't have credit cards/ paypal accounts.)

3. Mobile carrier billing

Pros:

Available to all mobile phone usersSupports refunds and itemisationSecure (if properly implemented)ReliableEnhanced conversion ratesGreater fraud protection

Cons:

Due to ease of usage users will be prone to over spending and might land themselves in unwanted debt. Gambling mobile apps poses an ethical question in this regard.

Mobile purchases through direct mobile billing can be seen as bringing together the advantages of premium SMS payments and debit/credit card payments, but it is not entirely without its faults. In the end, mobile customers should be the ones to decide how they pay for their goods and have more than one option available to them.

By catering for the unique mobile billing needs of your customers, you will ultimately be able to reach a bigger audience, get more conversions and have more satisfied users.

Thalia Brussow is a copywriter for Integrat Mobile Aggregation Services - a leading WASP aggregator that delivers state of the art mobile integration, mobile billing, and sms gateway services in Africa.

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