22 MAY 2019

4 new ways of looking at your payments data

POSTED UNDER Direct Carrier Billing Mobile Marketing Payments
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Mattias Liivak

Head of Marketing & PR, Fortumo

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  • Modify pricing based on payment success rates
  • Account for currency fluctuations in pricing
  • Incentivize heavy users and block friendly fraud
  • Target users by their SIM card type

Improving payment conversion is one of the most significant ways how companies can increase their revenue without investing additional resources into user acquisition and marketing. Simply put, growing your payment conversion rate from 4 to 5% means 25% more paying users and revenue.

We have previously written about traditional ways of increasing user conversion: optimizing checkout flows to remove noise and unnecessary steps, localizing pricing to match consumer income, timing promotions to days and weeks when users are most likely to engage, and offering alternative payment methods to reach the underbanked.

Here are 4 more data-based tactics you can use to increase your revenue.

Pricing localization based on payment success rates

If we leave aside technical errors, carrier billing has two primary reasons for payment failures: insufficient account balance (prepaid SIMs, no money on the SIM card to complete the transaction) and spend limits (postpaid SIMs, daily, weekly or monthly payment limit reached).

Local legislation may also require telcos to set the upper amount that a consumer can spend through carrier billing. For example, in Europe PSD2 allows telcos to process transactions up to €50 if they do not have a financial license. This can also cause high-value transactions to fail.

Looking at payment success rates gives an indication on whether your pricing is suitable. Price points that are above the average account balance of prepaid SIM users will cause a number of payments to fail, and they can also bump the postpaid SIM users over their spend limit. A sample success rate might look something like this:

  • $1.9 – 91.9% success rate

  • $4.49 – 84.2% success rate

  • $10.99 – 45.9% success rate

Combining the success rate data with the total amount of transactions helps evaluate whether it makes sense to close the price point and direct users towards smaller purchases. Conversely, if higher price points have lower success rates and transaction volume but bring in more total revenue, the pricing can be pushed higher.

Pricing localization based on currency exchange rates

Selling services or goods internationally means the currency exchange rate impacts how much money you are making with each transaction. Let’s say you are are selling something to consumers in India at a price of 99 INR. On the date of writing this post, the dollar value of that transaction was $1.42. On October 10th last year, it would have been $1.33. On June 6th last year, $1.47. Without changing anything on your end, the money you receive for each transaction has fluctuated by 10% over the year.

We don’t advocate changing prices when the exchange rates fluctuate by a few percentage points but it’s worth keeping an eye on longer term trends. If there are substantial changes taking place with currencies (as has happened with the Russian ruble) pricing can be modified to account for the shift in purchasing power.

Encouraging positive and discouraging negative behavior

Not all customers are created equal. For mobile games, 80 to 90% of the revenue is generated by only 10 to 20% of the users. Filter out heavy users and create targeted upselling offers to them, in order to incentivize them to continue making payments in the future.

On the reverse, negative payment behavior should be discouraged. Negative in this context means friendly fraud. It happens when a user knowingly makes a purchase, later disputes it and demands their money back. Our own internal practice is that when users request a refund from Fortumo, we block such users from making future purchases. We recommend merchants dealing with their own refunds to adopt the same approach.

Why? The risk that they will attempt friendly fraud again is higher than average. Not only do refunds usually involve a substantial fee (getting the money somehow back to the user), but encouraging users to sign up for a paid service and later reverse the decision can become a headache, especially for subscription businesses.

Targeting users based on their SIM card type

With carrier billing, postpaid users tend to have a higher ARPU than prepaid users. They are not limited in spending by their account balance and generally people with a fixed telco contract have more disposable income. On the other hand, the prepaid SIM card user base is much bigger in almost every country, compensating for the lower ARPU.

Today, telcos usually do not pass on the SIM card type data during transactions. However, when transactions fail, it’s possible to identify what type of SIM card was used. This can be used by merchants for two purposes:

  • Postpaid accounts: focused marketing and incentivization to make more payments

  • Prepaid accounts: guiding users towards more suitable (lower) price points


Out of these 4 recommendations, only the last one is applicable exclusively for carrier billing, while the other principles can be adopted even if you are using only bank payments or digital wallets. In case of carrier billing, merchants using Fortumo can easily pull the data on payment success rates, refunds and user type (prepaid or postpaid) from our Reporting API. Want to discuss how to better use the data Fortumo provides you? Get in touch.

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