Direct Carrier Billing

Direct Carrier Billing

Direct Carrier Billing: Complete Guide to Building Seamless & Secure DCB VAS Ecosystem

What is Direct Carrier Billing (DCB)? DCB mobile payment method that allows users to make purchases and pay for digital content, goods, or services directly through their mobile phone bill or prepaid balance. It enables users to make payments without the need for credit or debit cards, making it convenient and accessible for a wide range of users. How does Direct Carrier Billing (DCB) work? DCB relies on the integration between the mobile network operator (MNO), the content provider, and the payment service provider (PSP). When a user wants to make a purchase, they choose the DCB payment option. The user is prompted to confirm the payment, usually through a text message or a pop-up window. The mobile operator verifies the user’s identity and approves the payment. The purchase amount is added to the user’s monthly phone bill or deducted from their prepaid balance. Supported services: DCB is commonly used for various digital content and services, such as mobile apps, games, music streaming, video streaming, eBooks, and more. It is particularly popular for micro-transactions and in-app purchases within mobile apps and games. What are the benefits of direct carrier billing? A seamless user experience One of the key advantages of Direct Carrier Billing is an improved user experience. By eliminating the need for payment card information (credit or debit), users can make purchases quickly and easily, without having to navigate through complicated payment forms. This can be especially important for mobile users, who may be using their device on the go and don’t want to spend time entering their payment information. With DCB, the payment process is seamless and integrated into the mobile experience, making it easier and more convenient for your users to make purchases. Greater security compared to payment cards Another benefit of Direct Carrier Billing is its security features. With DCB users do not need to enter their credit card information or other sensitive data to make a purchase. Instead, the transaction is completed by simply entering the mobile phone number and confirming the payment, which is then added to the user’s monthly mobile phone bill. This reduces the risk of fraud and provides a layer of anonymity that can be attractive to users who are wary of sharing their personal information online. Of course, fraud is an issue when any financial transaction is involved. Cybercriminals are always on the lookout for opportunities to exploit vulnerabilities. However, mobile billing anti-fraud solutions can be deployed to protect the mobile billing payment page and block suspicious and fraudulent transactions; giving you and your customers reassurance that everything is being done to protect their accounts. Increases financial inclusion for mobile users Globally 1.4 billion people are unbanked, without access to a financial account. This means they don’t have access to traditional payment methods such as credit and debit cards, and therefore may struggle to pay for many digital services and products. Direct Carrier Billing removes this barrier by allowing users to pay for goods and services via their mobile phone bill or pre-paid SIM. This makes it easier for users with limited access to credit or bank accounts to make online purchases, opening up a new world of opportunities for digital content and services. This is advantageous for merchants looking to expand into markets where a significant percentage of the population remains unbanked, such as in Iraq where only 22.7% of the population have a bank account compared to 10.30% who have a mobile phone connection and 75.0% who use the internet. For mobile operators, facilitating DCB transactions helps them provide additional services for their unbanked customers, and increases customer satisfaction and retention. Higher conversion rates In addition to increasing financial inclusion, Direct Carrier Billing can also lead to increased conversions. DCB transactions involve minimal clicks and form filling. Whereas with traditional payment methods, users may abandon their cart if they encounter any difficulties during the payment process. This can be due to a variety of factors, such as complicated checkout procedures or concerns about security. With Direct Carrier Billing the payment process is streamlined and easy to use, reducing the likelihood of cart abandonment and increasing the chances of a successful conversion. New revenue streams DCB allows mobile operators to earn a commission on transactions made by their customers. This commission can be a percentage of the transaction value or a fixed fee per transaction. As more customers use this method to make purchases, you will also benefit from increased transaction volumes. This can result in higher revenue from transaction fees and potentially lead to negotiating higher commission rates with merchants due to increased volume. By developing stronger partnerships with merchants by facilitating DCB as a payment option, there may also be increased revenue-sharing opportunities and deeper integration with merchant services. Increase customer retention Finally, Direct Carrier Billing helps make customers ‘sticky’. By providing an easy-to-use payment method that is integrated with the user’s mobile phone bill, you can increase customer loyalty and reduce churn. This can be especially important in an industry where customer retention is a key factor in generating revenue. DCB can also provide a platform for cross-promotion of other services, such as loyalty programs, value-added services, and promotions, which can result in increased sales revenue as well as increased customer retention. So, if you’re looking to enhance the user experience and generate revenue, Direct Carrier Billing can provide your customers with additional services and products, with a seamless, convenient, and secure payment method. DCB vs Credit cards DCB (Direct Carrier Billing) and credit cards are two different payment methods with distinct characteristics. Here’s a comparison between DCB and credit cards: Accessibility: DCB is often more accessible than credit cards because it allows users to make purchases using their mobile phones, without the need for a traditional banking relationship or credit history. This makes it particularly useful in regions with low credit card penetration or limited access to banking services. Payment Process: With DCB, the purchase amount is charged to the user’s mobile phone bill or deducted from their prepaid balance.

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The Rise of Direct Carrier Billing Across the Global Payment Ecosystem

The global digital landscape is evolving swiftly with high rates of mobile penetration across the world even among the unbanked population. This has led to rapid changes in digital consumption patterns which fuel the need for swift, seamless, and secure payments. Rising to the occasion is Direct Carrier Billing (DCB). It has the upper hand compared to other payment modes. The ease of transaction via DCB is what is leading the global market penetration. It is set to experience significant growth. The key highlight of this rise is the African region which is estimated 84% rise in revenue in 2023. But still, ensuring secure and seamless DCB transactions remains a cause of concern. Let’s take a closer look at how various regions flourish with Direct Carrier Billing. The Global Prospects of DCB Direct Carrier Billing (DCB) has emerged as a powerful and convenient payment method that is rapidly gaining popularity across the world. In coming years, the DCB market size is all set to expand and grow at a notable CAGR of 13.13% in 2030 and is estimated to surpass US $115.72 billion by 2030. So, what’s propelling DCB? The answer is quite simple – need to make quick payments without any KYC or OTP. All it needs is a mobile phone and an active mobile number for billing. This has helped DCB find its foothold among the unbanked population in regions such as North Africa where internet penetration is limited and in the APAC region where high media consumption rates are driving DCB growth. According to research, 49% of DCB growth originates from Asia Pacific regions. But the challenge is the fragmented market and competition from digital wallets. Emerging DCB Markets: The emerging market geographies make up almost 60% of the DCB market value. Surprised? Don’t be. Factor in the high penetration of mobiles compared to emerging market’s unbanked population, then the number will look quite obvious. Carrier billing is the most prominent means of online transactions among the unbanked population. People with pre-paid can simply top up and begin spending. For Postpaid users, it could also be the source of credit with buy now pay later as the operator’s monthly bill. The key emerging market for DCB is the Middle East & Africa, where half of the population is unbanked, reaching as high as 70% in countries like Morocco, and in Central & South America, nearly 40% of the population is unbanked. This can translate almost directly into growth rates. End-user spending via carrier billing is expected to grow fastest in regions like Latin America with a rapid CAGR of 41 % by 2025. The Asia region (excluding the Far East & China), Africa, and the Middle East are not far behind, growing the second fastest at 24% CAGR to 2025. A secure environment is also essential for expanding DCB into new markets, particularly in emerging economies where DCB has the potential to revolutionize access to digital goods and services. These markets may be more vulnerable to fraud, so implementing a secure payment system is critical to ensure that DCB is seen as a trusted and reliable payment method. The DCB Ecosystem MENA (MIDDLE EAST AND NORTH AFRICA) The region is one of the fastest-growing DCB markets in terms of mobile connections, with a big percentage of the population owning mobile phones. In a survey, 19% of consumers from the MENA region used cashless payment options last year. This is quite significant as the use of mobile payment methods is on the rise in the region. Another fact that came out of the survey was that 64% of consumers used one digital payment option at least. This also includes DCB (Source: FinTech News 2023). This highlights how payment systems are being adopted by the region. The emerging markets, such as ticketing, online gaming, and physical goods, have a projected YoY growth rate of 31%, 57%, and 40%, respectively, for the next four years. It is a sector already showing signs of high potential. This year will close with $7M in ticket sales in Africa and the Middle East region. Specifically, these categories will represent an expense of $86M in 2022. Credit card ownership in these countries is not widespread with only a small percentage of users. Therefore, options like DCB come along as a reliable and practical solution. SOUTH AFRICA The region spent about $89 million for digital content and services in 2022 via Direct Carrier Billing (DCB) with a year-on-year growth rate of 16% and above. Between 2022-2026 it’s all set to reach $159M in 2026. (Source: “DCB Evolution and Trends 2022-2026” by Telecom) DCB spending in South Africa represents around 15% of the global market in Africa and the Middle East, placing it as one of the most relevant countries by billing. South Africans currently spend an average of $4.2 per month on digital content. By 2026, this average figure will reach $5.5/month/user. The digital market is largely the one that most stimulate users when it comes to paying for their purchases through the operator. The most popular content paid with DCB is, in order, video games, videos, and music. ASIA-PACIFIC It is estimated that the Asia-Pacific direct carrier billing market will grow at a CAGR of 14.52% during the 2019-2028 period, with Japan currently leading the adoption of this mobile-based digital payment mode. One of the biggest reasons for the stupendous growth of DCB is a steady increase in the usage of mobile phones and smartphones in the region. Developed Markets Even in geographies where a high percentage of the population is banked, DCB provides opportunity. Looking at younger generations, there is lower credit card adoption, and as an age group who grew up with mobile phones, DCB is a more natural option. In the United States, only 50% of Gen Z have a credit card. Even among the card holders, the use is far less at 1.5 cards on average as compared to 4 credit cards for the average American. Win-Win for businesses, direct carrier

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DCB Fraud: A Distress for All

Direct Carrier Billing (DCB) is a subscription model offered by carrier providers. The charge of the availed subscriptions is added to the monthly mobile bill or deducted from the available balance, and generally transactions are made using a single click. According to a source, the DCB market is expected to grow by 9% between 2018 and 2022. Offering convenience through this model has substantially increased purchases & eliminates the need to fill in card details and account sign-ups. The user is already using the existing carrier number. The estimate number of smartphone users in India would reach 1132.9 million by 2025. India’s Average Revenue Per Paying User (ARPU) reached $3.9 by March 2021. Cybercriminals have been infiltrating mobile devices through general trojans, ransomware, password trojans, and others , with an average 93.93% of devices affected by general trojan malware. The Biggest Challenge of Operators Fraudsters use baits like malware/bots, Potentially Harmful Apps (PHAs), copycat apps, pirated content for downloading, etc., to acquire device access of unassuming device owners. Their two most crooked methods for DCB VAS frauds are iFrame and device farms. The bots/malware installed on the user device can even bypass USSD, CAPTCHA, and OTP & cause DCB fraud. DCB fraud means the carrier user is wrongly charged for subscriptions they have not made. Customers often disregard the charges, as they are minuscule, and rectifying them would take a toll of their time, with the added burden of talking with customer care, which often has long queues. End-user often becomes a victim of fraudulent charges. The mobile users who are victims of the unprovided/un-availed services blame the carrier providers for it. The operator must also answer to the telecom regulatory authority and face heavy fines or stop the services entirely. The lost faith in the carrier provider redirects revenue to competitors. Creates Complications for the Merchants Merchants suffer a loss of revenue if they become a victim of DCB fraud. They become as much liable as the MNOs, and in some instances, even more. Merchants often use marketing/advertising to increase their VAS subscribers. Unfortunately, fraudsters have found loopholes in their traffic generation methods. The actions of the cybercriminals lead to large-scale claims accumulated through defrauded customers, which evidently leads to fines, service cuts by the regulators & telcos, or suspensions. Regulators may adopt new methods for enhancing their payment security, which could diminish the VAS subscriptions, as consumers constantly face frictions and might even increase abandoned carts. Solution Against DCB Fraud mFilterIt’s DCB fraud solution offers a solution that helps brands across the globe to separate real users from bots/malware through our AI, ML, and data science. The solution validates the incoming traffic in real-time and safeguards brands at every step of the journey. It is an integrated fraud management solution for aggregators and operators. DCB fraud solution uses deterministic, heuristic, behavioral, and probabilistic parameters for classifying frauds. It eliminates frauds by risk scoring and real-time blocking. The live dashboard and real-time alerts optimize customer value management, enhance LTV, drive ROI, and diminish DCB fraud complaints. A Few Other Tips Don’t click on unnecessary URLs or visit suspicious pages/untrusted sources. Analyze the loss of partnership, revenue, and brand value caused by DCB fraud and take measures to overcome them by implementing mFilterIt’s anti-fraud solution for DCB. Take advice from our core founder and management team on the best practices or methods of implementing our solution and eliminating ad fraud. Conclusion The safety of the consumers also falls on the carrier provider in case of DCB frauds. Brands also lose trust, revenue, and customers if they cannot trust the carrier provider. The need to eliminate and restore the faith of the customer is now. This scenario is possible through DCB anti-fraud solution and implemented by global brands that want to keep their market reputation and sustain their market share. Moreover, the solution helps to detect and eliminate threats of real-time bot/malwares. Connect with us to learn more about the advantages of eliminating frauds in the DCB VAS ecosystem.

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