4 digital trends impacting online dating services

Microtransactions or subscriptions: one doesn’t exclude the other for digital publishers

Dating has moved online and has no plan on leaving it soon. You can read more about the digital dating scene and it’s monetization strategies from our recent dating white paper. But let’s look at four main trends in the digital dating ecosystem which explain the growing need for carrier billing.

Trend #1: The majority of new potential users are located in mobile-first emerging markets.

Dating services like Tinder generate almost all their revenue from subscriptions and the best place for user acquisition today are the relatively unsaturated emerging markets. Smartphone ownership is growing the fastest there. Internet adoption is slowing down in Western markets, but accelerating in growing economies like Malaysia and Indonesia.

Match Group has been working on taking its cash cow Tinder to emerging markets. It’s rival Bumble launched in India at the end of 2018.

Lower income markets are challenging. Converting users with less disposable income means additional resources need to be invested in localization.

Credit card reach is lacking in emerging markets.

  • US credit card ownership: 66%

  • UK credit card ownership: 65%

vs

  • India credit card ownership: 3%

  • Indonesia credit card ownership: 2%

Where does carrier billing fit in?

Unlike bank cards or mobile wallets, carrier billing is by default available to any mobile phone owner. Carrier billing usage by dating service providers by regions is already the following:

  • 17,4% in Asia-Pacific

  • 20,9% in Eastern Europe

  • 13,6% in Western Europe

  • 20,7% in Latin America

  • 14,8% in Middle East/Africa

  • 6,0% in North America

Global total 14,5%

Trend #2: Dating is moving online and to mobiles altogether

Oh the times have changed and now you have a one in three chance of meeting your future significant other online. And by online we mean mobile - frequent online daters in the U.S. use mobile dating apps over two times more than online services on their PCs. This trend shows no signs on slowing down. It’s no wonder, since people also use the internet and even watch videos increasingly on mobile devices.

It’s quite clear that mobile will dominate the future of dating. Using or finding love (or something else) on a dating app is no longer a taboo. Dating services who wish to profit from mobile platforms have no other option than to make their existing services mobile friendly.

Where does carrier billing fit in?

As digital content is more and more consumed on the mobile devices, the payment solutions have to keep up with the users’ needs. Credit card checkout flows are inconvenient on mobile devices, negatively impacting conversion rates. With carrier billing, the user only needs to provide their phone number. Conversion rates are up to 10x higher on mobile devices with carrier billing compared to credit cards.

Trend #3: Users are willing to pay for dating services

As said earlier, dating is a growing subscription business. 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. Tinder’s paying user count broke the 4M barrier in 2018. You can even hire virtual dating assistants to handle the gruesome matchmaking part themselves and take some of the rejection off your shoulders.

And app makers claim paying for online dating is worth it - Coffee Meets Bagel co-founder has said that men who pay for the upgraded version have 43 percent higher number of mutual likes than non-payers and that conversation lengths increase by 12 percent. As more and more users are willing to pay for the service, it’s even more important to make in-app payments and casual spending as simple as possible.

Obviously it is a positive news for the dating service providers but only if they are quick to harness all it’s potential and offer convenient solutions to the casual players. 83% users pick a digital service payment method because of ease of use.

Where does carrier billing fit in?

As said before, mobile payments are a natural fit for mobile content, also it’s universally accessible to people in emerging markets. On top of that, ease of use is the main factor to select mobile payment regardless of the location. It’s fast, safe and enables user to pay with just a few clicks.

Trend #4: Stricter regulations for card-based payments

The European Banking Authority started requiring stronger authentication process for card-based payments. The technical standards on strong customer authentication (SCA) and common and secure communication under the PSD2 will be implemented from September of 2019.

More complex authentication can lead to lower conversion rates with card payments. Merchants operating in the European Economic Area (EEA) might need to say goodbye to their frictionless payment flows or find alternative SCA-compliant solutions.

Where does carrier billing fit in?

Those regulations don’t apply to carrier billing. This means the simplicity of the process remain unaffected. If you’re concerned about the impact of SCA on your conversion and want to minimize the impact, consider adding carrier billing as an alternative payment method.