Direct carrier billing allows users to charge online purchases to their mobile phone bill. It works on any device and provides a simple checkout experience for online purchases. Carrier billing is popular because it has higher coverage than credit cards, especially in developing markets where few people have bank accounts. It also results in better conversion rates for merchants since it only requires the user's phone number rather than financial details.

1. What is
Direct
Carrier
Billing?E-book by Fortumo

2. What is direct carrier billing? 2
Index
What is direct carrier billing?
Why is direct carrier billing popular?
How does direct carrier billing work?
Where is carrier billing used?
What are the fees related to direct carrier billing?
How to get started with carrier billing?
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4
6
8
9
10

3. What is direct
carrier billing?
Direct carrier billing (“DCB”) is an online payment method. It allows users to make
purchases by charging payments to their mobile phone bill. This payment method
is available to all smartphone and feature phone owners. The only thing needed to
confirm payments is a device with a SIM card.
Consumers can use carrier billing to buy content on any digital platform. For exam-
ple, you can buy a music streaming subscription on a tablet device by confirming
the payment on your phone. Fortumo's direct carrier billing products work on any
computer, tablet, smartphone, feature phone and smart TV.
Direct carrier billing is different from other mobile payment methods (mobile
wallets, NFC solutions) because it does not rely on banking infrastructure. While
the other payment methods are convenient for point-of-sale purchases, direct
carrier billing provides the best purchasing experience in online environments.
What is direct carrier billing? 3
Works on any platform: computers, phones, tablets, smart TV-s.
Simplest checkout experience for online environments.
Carrier billing enables consumers to charge purchases to their phone bill.

4. Why is direct
carrier billing popular?
For merchants, direct carrier billing provides higher payment coverage than tradi-
tional bank-based payment methods such as credit cards. This is especially import-
ant emerging markets where very few people have access to a bank card: for
example in India just 20% of all smartphone owners also own a credit card. Global-
ly, there are 5 mobile phone owners per each credit card owner. In mature mar-
kets with a high ownership of bank cards, its convenience and fear of fraud with
card-based payments has made carrier billing a popular payment method.
Merchants also integrate carrier billing because of improved conversion rates.
With direct carrier billing, the only information requested from the user is their
mobile phone number. This is in heavy contrast with card-based payments with
which users need to share their name, card number, home address etc. Merchants
using both payment methods report up to 10x better conversion rates with direct
carrier billing compared to credit cards.
What is direct carrier billing? 4
Simple checkout flows mean up to 10x better conversion rates.
Carrier billing is secure: no personal data gets transmitted.
There are 5 times more mobile phones than credit cards.

5. All people aged 15+
Young adults aged 15 to 25
Older adults aged 25+
Credit Card penetration
32% 25% 34%
60% 24% 67%
62% 30% 66%
21% 15% 22%
4% 3% 4%
5% 1% 6%
Brazil
United States
United Kingdom
Russia
India
Kenya
For consumers, carrier billing provides the most convenient payment experience
online. There is no need to sign up for any additional accounts, log in to an existing
e-wallet or bank account or fill out forms regarding bank card details. Payments
are completed in a matter of seconds and are especially convenient on mobile
devices where filling out long forms is tiresome. For a global overview of user
spending behaviour, check out our interactive map.
Consumers also prefer carrier billing because it is secure. No personal data is
transmitted during the payment process which means there is no need to worry
about private information being stolen for making fraudulent purchases. Unlike
card-based payment methods, direct carrier billing always requires the user to
confirm the payment on a physical device. This makes card-not-present type fraud
impossible. You can read more about fraud prevention with carrier billing from our
blog post.
Mobile operators provide direct carrier billing in order to increase revenue from
their existing network infrastructure and subscriber base. While revenue from
traditional business lines (calls, messaging) is declining, spending through carrier
billing is growing. This is especially important for mobile operators located in
markets where card-based payments are not popular. In these markets, direct
carrier billing is often the only way for users to purchase online content and
services. Digital content and physical services merchants are increasingly relying
on carrier billing because a growing amount of their users are located in these
markets. You can read more about how carriers are becoming the leading payment
processors in these markets from our white paper.
What is direct carrier billing? 5

6. What is direct carrier billing? 6
How does direct
carrier billing work?
With Fortumo, merchants can collect payments using direct carrier billing in 90+
markets through 350 mobile operators. In order to do so, they need to create an
account with Fortumo, set up a payment service to define what and for how much
they want to sell and then integrate Fortumo’s payment button inside of their
service.
When a user clicks the payment button, they are shown a payment window, which
is fully hosted and localized by Fortumo. The user enters their phone number and
confirms which service they wish to purchase. You can try for yourself how the
purchasing experience looks from a consumer perspective:
Once a user confirms their purchase, their information is sent back to Fortumo.
Fortumo checks with its mobile operator partners which network the end-user is
subscribed to and whether they have enough money on their account to make the
purchase. Fortumo then notifies the carrier to deduct the money from the account
and asks the merchant to give the user the services they paid for. Direct carrier
billing works for both prepaid and postpaid mobile customers: charges are either
deducted from a prepaid SIM card or added to the user’s monthly invoice.
User selects payment method
User MSISDN is detected using
header enrichment, payment is processed
User gets service

7. What is direct carrier billing? 7
At the end of each month, carriers transfer Fortumo the money that has been paid
by all the consumers globally. Fortumo then wires the money to the merchants’
bank accounts. Fortumo makes reconciliation for merchants very simple: we pay
all the required taxes in all markets globally which means that the money received
by merchants is a net sum. This means merchants don’t need to worry about any
additional fees or taxation.
For merchants, it is important to distinguish the technical and commercial differ-
ences between modern direct carrier billing and legacy mobile payment solutions.
Many regional and local carrier billing providers claim to provide direct carrier
billing because the payments are directly charged to the user’s phone bill. But this
is done with any mobile payment transaction and has no actual value or meaning.
True direct carrier billing means that no legacy Premium SMS technologies are
used and the carrier billing provider has a direct contract with the mobile operator.
A growing amount of mobile operators and digital content merchants are choosing
to integrate direct carrier billing through partners like Fortumo instead of doing it
on their own. This is because managing dozens or hundreds of relationships con-
sumes significant time and money. Fortumo’s role and expertise in the direct
carrier billing ecosystem is to enable both sides to launch payments rapidly. Fortu-
mo takes care of the integration, business development and operational support
activities such as end-user support and merchant onboarding.
Fortumo mediates the transaction between the merchant, consumer & carrier.
One global, monthly net payout makes reconciliation simple for merchants.
One integration with Fortumo connects merchants to over 350 carriers.

8. What is direct carrier billing? 8
Where is direct
carrier billing used?
Fortumo provides direct carrier billing to a wide variety of merchants. This includes
app stores (Google Play, Microsoft), OTT services (Sony, TenSports), game develop-
ers (Electronic Arts, Gameloft) and social networks (Facebook, Badoo). Click here
to see a full overview of segments where Fortumo provides direct carrier billing. To
date, more than 150 000 merchants have signed up to use Fortumo for collecting
payments for digital content, games and physical services.
More than 120 000 merchants already using Fortumo to collect payments.

9. What is direct carrier billing? 9
What are the fees related to
direct carrier billing?
Average payouts to merchants range in between 70%-80%.
Each mobile operator has put in place their own commercial terms for direct
carrier billing. This means direct carrier billing revenue shares are fragmented
across the world and even inside each country. Generally, direct carrier billing
offers lower payout rates than card-based payments which is in turn compensated
by the significant increase in payment reach and higher conversion rates. The
global average payouts to merchants from direct carrier billing range in between
70%-80% and are usually also dependent on the type of content or services that
are monetized. You can see the full overview of commercial terms of carrier billing
when you sign up with Fortumo and visit our Revenue Shares page.
End -Users
Taxes handled on behalf of merchant

10. What is direct carrier billing? 10
How to get started
with carrier billing?
Getting started with Fortumo is simple. You can register a free account and there
are no sign-up fees, monthly fees or recurring costs. Both individuals and compa-
nies can use Fortumo’s platform. Any type of digital content can be monetized
through Fortumo except for gambling, adult and donation services.
You can set up your account here and integration documentation for Fortumo’s
products can be found in our Developers Portal. We recommend you first read
through our Getting Started guide.
Have any additional questions about direct carrier billing? Contact us and we’ll be
happy to help out!

11. https://facebook.com/fortumo
https://twitter.com/fortumo
https://www.linkedin.com/company/fortumo-ltd
Fortumo is a mobile payments company that enables direct carrier billing
with more than 350 mobile operators in 90+ countries to over 130,000
merchants. Fortumo's payment products work across a wide range of
platforms including desktop devices, smartphones, feature phones, tablets
and smart TV-s. These products give consumers a simple, 1-click
payment method to charge online purchases to their phone bill. For app
stores, digital media companies and game developers, Fortumo provides
one integration with 350 mobile operators as well as a single point of
contact for settlements, reporting, support and infrastructure upgrades.
Founded in 2007, Fortumo has offices in Estonia, San Francisco, Beijing,
Delhi, Mumbai, Singapore and London and is backed by Intel Capital and
Greycroft Partners. For more information, please visit https://fortumo.com.
This document is for informational purposes only. Fortumo and the authors make no expressed or implied
warranties in this document.
Fortumo and the author(s) make no representation or warranty in relation to the accuracy, completeness or
reliability of the information contained in this document. Any opinions expressed in this document are subject
to change without notice. This document may be based on a number of assumptions and different assump-
tions could result in materially different results.
This document should not be regarded by recipients as a substitute for obtaining independent advice and/or
the exercise of their own judgement, and is not to be relied upon by recipients. Fortumo and the authors, and
any of their members, directors, employees or agents do not accept any liability for any loss or damage arising
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