Why the mobile industry must unite or miss a big opportunity

Mobile operators are the gatekeepers for the UK’s favourite device - yet year on year they report decreasing average customer value. It is time that the mobile industry harnessed the potential of operator driven mobile payments enabling merchants to reach their customer on their preferred device, offering a truly mobile payment service.

The Phone-paid Services Authority’s (PSA) Annual Market Review has revealed that revenue per user for paid phone services grew 37 per cent over the last year, reaching £15.69. Overall the PSA revealed that the UK paid phone services market grew 4.5 per cent year-on-year to £700 million, with mobile accounting for 75 per cent of total revenues. Driving this is the continued growth of direct carrier billing - which saw revenues spike by 31.4 per cent. The report highlights that consumers like the convenience of paying for goods and services through their phone bills. As the report concludes operator billing is ‘the platform upon which future phone-paid services and revenues will be derived.”

For operators and merchants alike this is a clear sign that mobile operator payments represent a growth opportunity through offering consumers a frictionless payments process which is already being used globally by the likes of Apple, Amazon, Google, Spotify and Intel. With operator billing now approaching mass market adoption growth is expected to continue at 27 per cent over the next year. In particular, the rise of subscription payments to entertainment, media, health and lifestyle brands and transport payments will drive consumer adoption because of the convenience DCB offers as a payment method and as a result of the trust users have for billing via their mobile provider.

The next five years will be an exciting time in the development of mobile operator payments with huge opportunities represented in the launch of the next–generation offerings, both physical and digital, such as mTicketing, which will continue to drive operator billing to the mass market. However, this extraordinary opportunity can only be reached if the industry joins together to drive quality in the DCB market, maintaining the right balance between driving revenue for carriers and brands whilst safeguarding consumers.

While it is evident that customer satisfaction has improved in the last year, trust remains an issue for the industry to address. It continues to be disappointing that more than 8 per cent of users stopped using phone paid services because of trust and problem-related issues. However, it is promising that 59 per cent of users reported complete satisfaction and 58 per cent of users either increased or maintained their usage.

As the industry matures and the opportunity grows there is a clear need to develop more robust compliance to develop customer trust and support adoption. Key measures to support this include better customer education and understanding of DCB, of which improving the customer service support process is part.