What is mobile carrier billing?

Mobile billing, also known as mobile carrier billing, is an alternative payment method that allows customers to pay for purchases directly on their phone bills rather than making payments with a more traditional payment method like credit or debit card, bank transfer or cash. Mobile carrier billing originated before smartphones, but continues to grow worldwide in both developed and emerging markets because it’s convenient, secure and accessible to underaged users or unbanked customers.

Types of mobile carrier billing

Pay By SMS

As its name implies, SMS payments (sometimes called premium SMS payments) allow customers to make payments from their phone with text messages. There are two ways customers can pay by SMS:

(MT) Mobile Terminated SMS Billing

Sometimes called reverse SMS billing, MT SMS billing is when a customer is billed upon receiving a text from a merchant. Usually the customer “opts in” by sending an SMS code to a specific number to initiate contact with the merchant. The merchant then sends a message and the customer is billed. MT billing is a great mobile billing solution for subscription content because the customer is charged for each SMS they receive and can usually “opt out” of a subscription by simply responding to one of the premium SMS they’ve received.

(MO) Mobile Originated SMS Billing

MO SMS billing means the customer is charged upon sending a premium SMS to a short-code. In other words, the SMS originates from the phone and the customer is charged a premium SMS rate on their mobile bill.

Direct Carrier Billing (DCB)

Also called direct operator billing, DCB is a more streamlined payment method than premium SMS billing because users do not need to register, log-in or send an SMS to complete checkout. Direct carrier billing is especially popular for mobile websites, applications, and games. Merchants can support direct carrier billing from customers who are using their mobile phones or from users checking out from a computer or tablet. This is also sometimes called Mobile Transaction Billing or Mobile Transaction Processing. Typically, carriers need to receive special clearance from their Central Banks in order to offer this service, a requirement because their product turns into a money service business on top of their regular carrier services. As a result, this is not available in all countries.

 On a Mobile Phone: WAP Billing

WAP (Wireless Application Protocol) billing is a type of direct carrier billing and was one of the first mobile billing solutions for mobile content downloads or subscriptions. Customers can make “one-click” purchases directly from their phones if they’re using a WAP browser or application, which is able to automatically detect the devices’ MSISDN (Mobile Subscriber Integrated Services Digital Network Number) that’s typically stored in the phone’s SIM card. This data can include the mobile subscriber’s network, country, and subscriber number. The WAP can then tell the mobile provider to bill the subscriber for their purchase. There’s also a web-based solution where the confirmation is done on the computer itself, used rarely in some countries.

Mobile Airtime Transfer

In certain countries, mobile carriers have built distribution networks for payments collection in a P2P manner. Users who have a special SIM card are able to transfer credits to users who want to purchase credits from them. This allows the Mobile Carrier to reach out to a wide network, without having to rely on physical stores or entities. This is a common distribution method in Africa and in Southeast Asia. Some countries have also authorized P2P transfers where users can transfer airtime from one another. This method is sometimes utilized as a payment method when the airtime is transferred to a service and the airtime is then sold in a secondary market, allowing both a reseller to make a profit and for the service to receive the proceeds of the airtime traded.

Accept mobile payments with Paymentwall

Paymentwall offers a mobile payment solution called Mobiamo. Mobiamo allows merchants to accept mobile payments via Direct Carrier Billing, Premium SMS, or WAP in more than 80 countries worldwide. In some regions, Mobiamo even supports recurring billing for subscription-based payment models. Paymentwall’s secure mobile carrier billing system works with more than 150 mobile carriers and offers flexible pricing options, 24/7 customer support, and advanced analytics tools. Click here to learn more about Mobiamo.