Whether they’re riding a tram, hiring a bike, paying for tolls, or charging an electronic vehicle, today’s travellers expect a quick, convenient, easy-to-understand payment experience.
Carrier Billing: Filling payment gaps
But sometimes there are hitches, especially for infrequent travellers or visitors. They seldom have the time or the inclination to download a dedicated app or create an account. They just want to pay, ride and go – writes Clemens Leitner, CEO, DIMOCO.
To fill these gaps, carrier billing is emerging as a perfect solution.
Today, too many people still think of carrier billing (CB) as a niche payment solution for digital content, like mobile apps, games, and impulse purchases.
Yes, it works very well for these virtual experiences. But it’s also gaining traction in the physical world, and one of the biggest growth areas is mobility.
The fact is, paying for local mobility services can be great for local people who use them frequently. But it can be exasperating for infrequent travellers or visitors.
Faced with the prospect of creating an account, or entering their payment details, or downloading yet another mobile app, they will often decide it’s not worth hiring that bike or scooter.
Similarly, if the local transit system requires them to register their details or fill in online forms, people’s experience of travelling around a new city can be severely compromised.
It’s the same for people who have recently bought an electronic vehicle or are taking one to another region. With few charging points offering the option of ad hoc charging, they are suddenly faced with the prospect of juggling multiple charging cards, or the need to create a new account every time they charge their car.
Until they learn all the local nuances, it can be a bewildering and frustrating experience.
Increasingly, mobility merchants are coming to recognise that CB makes for a great back-up payment solution. It meets the needs of infrequent travellers and visitors. And, often, it proves to be so easy and convenient that regular travellers also migrate towards CB too.
Appreciating the innate strengths of CB
The beauty of CB is that it merely requires a mobile phone number to make a payment.
Mobile phone numbers are the most prevalent, reliable, and long-lived identifiers of the digital age. They exist only once, are tied to just one person and one device, are non-manipulable, and are networked based.
That makes them ideal for payments – arguably better than the 16-digit account numbers of the card-based world, which are temporary, and manipulable, and aren’t tied to a single person or device.
Second, there’s the reach. With more mobile numbers that there are people, the reach is near-universal. And, because these numbers are linked to an individual, they can also be used for authentication and identification purposes – which makes them ideal for some mobility services like hiring bikes and scooters.
Compelling, real-world results
The benefits aren’t just theoretical. More and more mobility merchants are adding CB to their payments repertoire, and the results are compelling – with direct, tangible benefits for merchants and travellers alike.
One of the big growth areas is bike and scooter rentals. A case in point is nextbike, the European market leader in bike sharing.
As far back as 2021, it introduced DCB across its German operations using Zahl einfach per Handyrechnung (Simply Pay by Mobile), the domestic payments brand created by the country’s MNO community and facilitated by DIMOCO.
There is no need for the customer to register or enter sensitive data such as credit card or bank account details.
And, to get the message out, an extensive joint-marketing campaign was developed, including eye-catching, on-bike advertising banners and a cashback promotion of up to EUR5.
It’s a similar story with electronic vehicle charging.
In this instance, Germany’s m8mit app, operated by msu solutions I Kraftwerk, has been enabled for CB, again using the Zahl einfach per Handyrechnung system.
The m8mitt app gives users easy access to a network of over 120,000 charging points and promises a barrier-free charging experience.
Again, the message was reinforced by a joint-marketing push, which included social media posts, in-app messages and discount promotions. And, for ad hoc charging, the CB solution is now used for 28% of billing.
CB has also been adopted by several leading transit operators and, again, the results speak for themselves.
Studies from Germany show that more than 70% of all tickets sold are single tickets, short-distance tickets, and day tickets, and are therefore classified as occasional travellers.
Many transit operators have been specifically targeting this target group for years, as it can have such a positive impact on passenger numbers and therefore revenues. And CB can provide a solution.
A good example is in Leipzig, where the city’s mass transit operator, Leipziger Verkehrsbetriebe (LVB) has offered the option of Zahl einfach per Handyrechnung for several years, giving customers a straightforward way to complete a purchase and making it accessible to those customers who, for example, would otherwise be unable to purchase tickets due to a lack of an account.
In Bonn, CB has had a similar impact for mass transit operator SWB Bus and Bahn. Here, Zahl einfach per Handyrechnung has emerged as the primary payment method for in-app ticket sales and is established as the most popular payment option for occasional riders.
So, good indications that, by providing more ease and convenience to travellers, CB can help mobility merchants and transit operators to reach more customer, reduce more friction, and capture more revenues. And, on average CB, has led to an average 10% uplift in sales
Poised for further success in Germany and beyond
In the mobility sector, many of the early beneficiaries of CB have been innovative, forward-thinking merchants and transit operators based in Germany. Learning from their experience, many more organisations can now benefit.
Every mobility merchant or operator in every geography faces similar issues. CB represents a near-universal, ready-made solution.
And equipped with a straightforward SDK-enabled integration process, it’s becoming easier and easier to implement – with the potential to provide millions more travellers with a quick, easy payment option.
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