Samee Zafar, EDC Director based in London met with Michael Tomlins, CEO of Infomedia, a leading provider of Direct Carrier Billing (DCB), enabling brands, publishers, and merchants, to conveniently charge digital purchases to consumers’ mobile phones.
Please tell us about Direct Carrier Billing (DCB) and how it is different from other types of payments? Can it only be used for digital commerce?
Direct Carrier Billing (DCB) is a globally recognised payment solution that allows merchants to charge the cost of digital content to their customer’s mobile phone bill with as little as one click. The check-out process is quick, safe and seamless as no information is required from the end user (such as credit card details or CVC codes) in order to make the payment.
There are over 5.5 billion mobile phone users globally compared to 1.5bn credit card holders and so it has the power to increase participation in the digital economy for many people that currently rely almost solely on cash.
In countries such as Japan where DCB is a much more established payments mechanism (c. $12 billion is transacted annually), consumers can purchase physical goods from big brands such as Amazon and charge the cost of the transaction directly to their mobile phone bill.
Is DCB more relevant for a market that does not have mature banking and payments infrastructure? Can it prove equally useful in more developed markets?
It would be fair to say that most countries have mature banking and payments systems however there are still many people who, mainly for religious and cultural reasons, choose not to use a credit or debit card on a regular basis. DCB provides these people with a simple, safe way to pay for all manner of purchase types.
In Western economies, with a much higher propensity to use payments cards, check-out conversion benefits come to the fore, particularly for low value (sub $15) digital purchases. We are seeing DCB being used increasingly by large brands such as Google and Spotify for these types of purchases. You may also have seen Amazon’s recent announcement to use DCB in the UK.
DCB benefits from very high margins. Will these margins continue, or will they be squeezed in the future due to competitive pressures?
The origins of DCB were in the billing of carrier-controlled content and so commissions were set at a level greater than many other payments mechanisms. However, as the market has matured and purchases have extended to music, films and other high-value services, we have seen carrier commissions reduce to accommodate these services. Although still larger than commissions for card payments, this is largely offset by the better check-out conversion rates experienced using DCB.
As DCB continues to achieve greater penetration in other non-digital transaction types, for example, parking, ticketing and transport, the industry is adapting current commission structures in order to be able to accommodate the new markets and services.
What do you do in your spare time? What are your hobbies?
I enjoy cycling and every year I take part in the ‘Cycling to Help Cure Cancer’ event powered by Le Cure. The event is currently in its fifth year and is a 4-day cycling tour across the French Alps. The 4 days can deem very challenging however extremely rewarding to see that Le Cure has already raised over £1m for the Royal Marsden Cancer Charity and created four Le Cure research fellowships. Golf is also another strong passion of mine and I like to fit in a few rounds as and when I can.