Local payment methods in Asia: what do merchants need to think about?

Fortumo headed to INMA Stockholm & Money20/20 Asia

The digital economy of South-East Asia is estimated to triple by 2025 to $240 billion. With close to 500 million people and smartphone ownership above 60%, the region is in focus for both international and local digital content merchants.

But despite the large consumer audience hungry for entertainment and widespread online through smartphones, monetization remains a challenge. Users can be acquired by offering free content and running promotions, but how to convert these users into paying customers?

The payments ecosystem of South-East Asia is fragmented. SuperData Research indicates that only half of digital gaming transactions move through traditional payment methods: debit or credit cards and direct debit. The other half is split up between alternative payments: direct carrier billing, digital wallets and prepaid cards. In other words, merchants who rely only on bank-based payments miss out on half of the revenue.

With each country in the region having dozens of alternative payment methods to integrate, where do you even start? Here are a few considerations to keep in mind when putting together your payments strategy for the region.

Shortest path to the consumer

Regardless of the payment solution used, any online payment requires the consumer to have money available in an online environment.

In case of credit and debit cards, this money comes directly from their bank account. Wallets are loaded with money through an offline cash transaction or through online banks. Prepaid cards require the consumer to purchase or recharge the card offline, e.g. in a 7-Eleven or Alfamart. In case of carrier billing, the money is deducted from the user’s prepaid SIM card or added to their monthly phone bill.

With each payment method there are several companies between the consumer and the merchant that allow the transaction to happen, with each company taking its cut of the payment:

Comparison of companies involved in payment processing - Fortumo

Wallets add an extra layer on top of a payment method that the consumer already can access, but take an additional step to make the payment. With card-based wallets, the user can also make the transaction directly with their bank card. In case the money needs to be loaded to the wallet offline, the same result can be achieved through a prepaid card.

In case of carrier billing and prepaid cards, the least amount of additional companies are involved and the link between the consumer and the merchant is the shortest. However…

Consumer convenience

Digital content payments - purchasing credits in a game, subscribing to a streaming service or buying a new sticker pack in a messaging app - are usually impulse-based. The decision to make the payment is done in a few seconds and there is also expectation that receiving access to the content will be instant. The longer it takes for the consumer to complete the payment, the more likely they are to change their mind.

Let’s assume the consumer has never used any alternative payment method before. Here is what they will need to do to complete their purchase:

  • Wallets require the user to create an account and load the money onto their account either online (through their bank) or offline (cash transaction)

  • Prepaid cards require the user to head to their local retailer and purchase a prepaid card (cash transaction)

  • Carrier billing is by default available and usable by any mobile phone owner immediately

Digital content is purchased and consumed on mobile devices and any additional steps they need to take to complete the transaction will cause some users to churn out. In case of wallets and prepaid cards, it is highly likely that the user will need to take these extra steps.

In a country like Indonesia, even the most popular wallets are used by less than 25% of the population. It is also highly improbable that the user carries around a topped up prepaid card on the off chance that they need to make an online payment. Carrier billing on the other hand will be available immediately.

Integration complexity and technical capabilities

In case the user has a bank card or account, one integration is usually required to cover all the major card providers such as Visa, MasterCard and AmEx. Integrating wallets and prepaid card providers needs to be done one by one.

GSMA lists out the various mobile money services available in each country on its Mobile Money Deployment Tracker. In South-East Asia, there are over 40 mobile money services available today.

This means digital merchants need to integrate, launch and manage multiple wallet and prepaid card partnerships for each country where they have users. Since many of the wallets and prepaid card providers operate only in one country, international expansion requires even more payment integrations.

Beside the significant overhead from multiple integrations, some wallets and prepaid cards also have technical limitations, for example the inability to use recurring payments. Others do not provide a great user experience: for example, the user needs to visit a retail store, buy a scratch card and enter the PIN code on the card to load money into their wallet. This makes their usage in case of impulse purchases very unlikely.

Carrier billing gives merchants a simpler alternative. Companies like Fortumo have integrated local telcos in the region and merchants can start collecting payments from subscribers of many telcos through one integration.

Carrier billing has also gone through some of the most extensive quality control processes from the technical and consumer experience perspective out of all alternative payment methods. This is illustrated by the fact that it is the only alternative payment method used by global companies including Google and Apple.

Security and privacy

The more data a merchant collects about its users, the more valuable they are as a target to criminals. Data on the user’s personal financial details is even more valuable. Mobile fraud in Asia is increasing, as is consumer fear of having their payment information stolen and misused.

Digital wallets need to ask for personal information in order to verify the legitimacy of the transaction and ensure no fraud is taking place. This is a double-edged sword because in order to ensure that transactions are legitimate, the consumer needs to share a lot of information about themselves: their email, a password, card number, expiry date, CVC code, country, postal code, name and their address.

What kind of information is collected with carrier billing? Only the user’s phone number. Since physical access to the SIM card and device are required to complete transactions, there is no need to collect sensitive personal and financial information about the user.

In summary, what to look out for?

There is no doubt that alternative payments are a key to success for digital content merchants in South-East Asia. However, not all alternative payment methods are created equal. When assessing which payment method to add, digital merchants should ask themselves the following questions:

  • Least amount of companies involved: How many companies sit between the merchant and consumer and take their cut from the transaction?

  • Immediate availability to consumers: Is the payment method available to all users immediately? Do they need to create an account or make an offline cash transactions to make the purchase?

  • Simple checkout flows: How many steps does the checkout flow include and how many fields does the user need to fill out in order to complete their transaction?

  • Integration simplicity: How many integrations are needed to reach optimal market coverage? Is there overhead from expanding into new countries?

  • Security and privacy: In case of a data leak with information collected using the payment method, how big will be the damage on you and the consumer?

If you’re interested in exploring carrier billing and understanding how the payment method stacks up against other alternative payment solutions in South-East Asia, get in touch.

How to monetize online dating services - and do it safely

How to monetize online dating services - and do it safely

Dating and social services have become one of the world’s strongest subscription businesses. In 2018 Tinder was the nr 2 non-game app by worldwide revenue. Dating apps made up three of the top 10 apps by consumer spend last year in the UK and six of the top 10 in France. There are now over 1,500 dating apps or sites available altogether.

Probably everyone has a serious Tinder-couple in their inner circle - maybe even a Tinder marriage (if you know it or not). Using dating apps is less and less a taboo and more and more a common form of entertainment and socializing. Apps might actually be helping more people build committed relationships.

According to one study Tinder users are more likely to be looking for a committed relationship than are offline daters. When around 30 percent of men who are not dating online say it is “challenging to commit,” only 9 percent of male Tinder users say they find it difficult to maintain a committed relationship. It can be attributed to having a realistic idea of the dating pool ahead of you - dating apps give quite a comprehensive overview of the dating scene, whereas offline daters are merely speculating what the pool might look like.

This technosexuality also has a dark side, for example questionable effect on mental health. There have also been complaints about these apps being unfriendly to women. As a reaction to that, Whitney Wolfe Herd, a former Tinder vice-president, launched an app called Bumble which relies on women to make the first contact with men. The firm - where 85% of staff are women - is now valued at over $1B, according to Forbes magazine. Tinder launched a similar feature in India.

Dating apps are now a firmly established (and profitable) part of the dating scene. Dating services have to keep up with the market changes and take their business model where the people are. And the people are on mobile devices, apparently. This includes integrating mobile payment methods (e.g. DCB) to maximize the amount of users able to make payments. But monetizing dating services also raises the question of payments’ safety. Carrier billing is significantly more secure from the consumer perspective, because no personal data is transmitted or stored during the checkout process.

Today people are more afraid of online identity theft than being robbed on the street. During the past decade, there have been several data breaches where private information on millions of users has been exposed. The biggest of them was the Sony PlayStation Network case in 2011 when 77 million accounts were hacked and estimated losses amounted to 171M dollars. In 2014, Sony agreed to a preliminary $15 million settlement in a class action lawsuit over the breach.

The data is even more sensitive in the case of dating, where users are in quite a private and vulnerable situation to begin with. Most notable example of this is the Ashley Madison data breach: it is a site for enabling extramarital affairs. When it’s user data was hacked and leaked, it resulted in thousands of marriages and relationships breaking up, also at least few suicides have been linked to the incident. Now imagine the consequences, if for example a gay dating app data would be leaked in a conservative country.

All in all, the dating services audience is increasingly becoming mobile. Carrier billing is the perfect match for monetizing these services in more than one way. On top of convenience and accessibility, it can be presented as a safest payment option to users who are afraid that their identity may be exposed online.

Read more about the digital dating scene and it’s monetization strategies from our recent dating white paper:

Fortumo headed to INMA Stockholm & Money20/20 Asia

Fortumo headed to INMA Stockholm & Money20/20 Asia

Next week, team Fortumo will be attending two events taking place in cities some 9600 kilometers apart.

During March 18th to 22nd, we will be attending INMA Media Subscriptions Week 2.0 in Stockholm, showcasing our PayRead platform for digital publishers. Digital publishers today are focused on increasing their paying user base and we will be there to show what role telcos will play in it. The potential for growth is great, as we have proven with Aftonbladet.

Fortumo headed to INMA Stockholm & Money20/20 Asia

From March 19th to 21st, we will also be attending Money20/20 Asia in Singapore. South-East Asia is a hotspot for both digital content and mobile commerce, so the event hits the nail on its head. Our CEO & Co-Founder Martin Koppel will be sharing his thoughts on what kind of help merchants can expect from telcos in their international expansion.

Attending either of the events? We’d love to catch up with you. So if you’re in attendance, get in touch and let’s set up a meeting.

Collaboration with telcos and among themselves could be the savior of media business

Collaboration with telcos and among themselves could be the savior of media business

We’ve covered the challenges and possible solutions for the media business in solving the monetization puzzle in the past. One way to crack it is through micropayments. This time we asked for the opinion of industry specialists: how can journalism survive this new era and what might be the innovative ways for publishers to monetize their content?

Traditional journalism: dying or evolving?

The experts believe that traditional journalism is most definitely not dead and that the demand for fresh news is constant throughout time. Yet Ragne Kõuts-Klemm, the Associate Professor in Sociology of Journalism in the University of Tartu notes that just broadcasting news is not the field where it would be possible to ask the readers to pay. The habit of free news has taken root and the consumers don’t want mere info. They want added value, which can be found in investigative journalism. It is especially important to keep a constant level of quality because if a customer is disappointed once, the next time they’re not willing to pay for content.

Karin Vene, the business development director of AS Ekspress Meedia says that technological developments have forced them to be more innovative and pay attention to the storytelling formats, packaging and platforms. Using audiovisual and multimedia solutions has become an everyday part of journalism.

At the same time, wide access to reliable and objective news is a matter of societal safety. Karin Vene brings out the impact of social media, as it is a good ground for spreading fake news. On the other hand, filter bubbles form more easily in the social networks and just relying on getting the news from there can result in one-sided or tilted perspective. This is a clear threat to democracy and free journalism. Ragne Kõuts-Klemm additionally brings out the fragmentation of the public sphere where the ability and willingness to compromise decreases.

Monetization lies in collaboration

The solution to online publishing monetization problems lies in collaboration. Ragne Kõuts-Klemm would direct the content producers in the way of telecoms and internet service providers as they have the first hand contact with the auditorium. As the connection providers benefit from their clients consuming content online, they should be equally interested in maintaining the demand for that content. The answer could lie in bigger collaboration (or even a symbiosis, if you may) between telcos and media companies, which should also include fair distribution of revenue.

Different media companies both in journalism and across different formats should consider cooperation also between themselves. Kõuts-Klemm also brings out that consumers don’t want to limit themselves with just one media brand. The answer might be combining different competing media publications into one fixed price package. Karin Vene sees additional monetizing options through streaming different events. Media houses also complement their services with additional digital services, e.g. cooking portal of the New York Times.

The times are challenging but definitely not hopeless for the media companies. Media companies should acknowledge the limitations of their monetization options, as simply publishing news is vital but not very lucrative. At the same time, they should focus on collaboration instead of competing: both with telcos and among themselves.

Fortumo recently launched PayRead, the frictionless payment solution for digital publishers. If you want to want to simplify your paywall or monetize your content, get in touch and we’ll get you started.

February in the digital industry: our monthly news summary

February in the digital industry: our monthly news summary

February has come and gone by in a blink. Time flies when there are two big industry events during mere four weeks. We attended both eSports BAR in Cannes and the Mobile World Congress in Barcelona.

We also published three reports from digital publishing case study about Aftonbladet’s experience, to white paper about using DCB in digital dating services to 2018 global DCB market report.

No worries, we still found time to keep our eye on the current news. Here is our recap of February digital industry news:

General Mobile



Digital content


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