Over the last years, carrier billing became a mainstream payment method for all kinds of digital goods and services. We talked to Iain McConnon of mobile payment company boxPAY about the evolution of mobile phone billing. Iain co-founded boxPAY together with his brother Gavin McConnon in early 2011. BoxPAY provides a mobile payment platform that allows online merchants and app developers to bill their customers through their mobile operators in over 60 countries.

Payment Observer: First of all, can you give us some Background Information on boxPAY?

Iain McConnon: I founded boxPAY together with my brother Gavin, after the experiences gained from Global Billing Solutions, a direct-to-consumer mobile content company. We had developed billing relationships with mobile operators in many countries, so creating a carrier billing company was a natural next step.  An important part of our business model is continued global reach, constantly integrating new countries and carriers, now available in 62 countries, and adding more every day. Recently opened an office in SF earlier this year.

Payment Observer: What are the advantages of carrier billing compared with other payment methods?

Iain McConnon: Carrier billing allows merchants to charge their customers for digital content via their phone bill. The main advantages of carrier billing are:

• Global Reach:  5 billion mobile phones vs. 3 billion credit cards
• Convenience: it only takes seconds, especially useful for small transactions where the consumer is looking to make a quick purchase and doesn’t want to fill out lengthy forms
• Security: people are reluctant to provide their payment details like their credit card number online

Payment Observer: How did phone billing evolve over the last years?

Iain McConnon: Phone billing was mainly Premium SMS (PSMS) for ringtones and wallpapers over the last 10 years. Over the last 18 months, carrier billing became a mainstream payment method not only for mobile content, but also for other verticals such as newspapers, dating and gaming.

More and more direct carrier billing relationships (where the content is billed directly to the phone bill without PSMS or premium numbers) are being established. This is a new level of payment integration that provides merchants with more price point flexibility and higher payouts. The end customer won’t see a big difference in their user experience, but for merchants it’s a big deal.

Payment Observer: There is a lot of competition in the carrier billing space. What makes boxPAY stand out from its competitors?

Iain McConnon: BoxPAY’s advantages:

• Experience from Global Billing, tested reliable platform with extensive real-time reporting
• Self-service for smaller merchants, much like the Google AdWords sevice
• Subscription billing and recurring payments are often requested by merchants
• In-app purchases on Android
• Service available also in emerging market where it’s a very appealing way to monetize users that don’t have credit cards. Recently went to India and Asia

Check out more about boxPAY’s Features here.

Payment Observer: What will be the next for phone billing?

Iain McConnon: Carriers will increasingly become aware of the revenue potential of carrier billing, and more direct carrier billing integrations will become available. boxPAY just released our billing option for Smart TV, so look for carrier billing options on new devices too!

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Mobile payments have been one of the main topics at this year’s Mobile World Congress (MWC) in Barcelona. The congress is organized by the GSM Association (GSMA), the global industry association of mobile operators and related companies. It is not just about presenting the latest mobile devices; it is also about showing the future of mobile technology.

Mobile Payment

Mobile Payments are broadening outside of digital goods and services: Carrier billing provider BOKU announced a partnership with MasterCard to expand its payments technology to cover e-commerce and retail point-of-sale. The new BOKU Accounts service allows subscribers to make payments online, in-app, and in-store anywhere MasterCard is accepted. At the same time Facebook is starting to cut out mobile payment providers of the transaction cycle. Facebook’s CTO Bret Taylor announced during his MWC Keynote that Facebook is partnering with major mobile network operators (including AT&T, Deutsche Telekom, Orange and Telefónica) and will provide its own carrier billing solution. At present Facebook uses third party providers such as BOKU or Zong to process mobile payments.

Traditional financial service companies are going mobile:

• Visa and Vodafone announced at the conference to join forces and develop a mobile payment platform based on Visa prepaid accounts.
• Money transfer giant Western Union (in cooperation with mobile operator WIND) is going to launch a mobile money transfer service in Italy.

Innovative mobile payment services presented their latest developments:

• iZettle’s mobile payment solution that allows users to accept card payments using their iPhone, iPad or iPod Touch gains traction and is expanding into tree new countries.
• Mobile payment start-up boxPAY launched and presented an in-app payment service for Google’s Android platform.

Near Field Communication

Near field communication (NFC) services are gaining momentum and have become one of the trending topics at the MWC this year. The GSMA has recently published a set of industry specifications to enable the development of secure and ubiquitous mobile NFC services.

• Smartcard and digital security companies such as Gemalto and Giesecke & Devrient showcased their NFC-services at the MWC.
• The Logic Group and ViVOtech announced to work together to enable customers to shop via their NFC-enabled smartphones.
• Mobile payment joint venture ISIS has teamed-up with BarclayCard, Capital One, and Chase.

Irish mobile payment start-up boxPAY has opened on office in San Francisco, California and is now offering mobile carrier billing in the US and Canada.

boxPAY provides Premium-SMS and direct carrier billing solutions, enabling e-businesses to charge their customers for digital content through a mobile phone instead of a credit card. The company offers in-app, one-touch billing on the Android platform, as well as subscription billing in more than 40 countries.

“The move to North America was crucial to boxPAY’s global expansion because of the significant amount of cellular subscribers in Canada and the US. We needed to offer our merchants from all over the globe access to these 350 million+ customers, especially because of the fact that mobile users here are comfortable with mobile payments,” commented boxPAY’s Co-Founder Gavin McConnon.