Fortumo's latest market report takes a look at the carrier billing landscape in Western Europe: Germany, France, United Kingdom, Italy, Spain, Netherlands, Belgium, Greece, Portugal, Austria, Switzerland and Ireland.
While Western Europe has high bank account ownership and credit card ownership ranges from 12% to 66%, carrier billing sees heavy usage by merchants primarily thanks to two reasons:
Simplicity: carrier billing checkout flows are substantially shorter compared to any other online payment method, usually requiring the user only to enter their phone number to complete the payment. This means less users cancel the checkout process, especially in case of impulse purchases.
Security: A growing amount of consumers have grown concern over identity theft and card-based fraud which has significantly increased over the past few years. With carrier billing, consumers’ personal data is not shared during the transaction which gives them an added sense of security to go through with the transaction.
Due to the Payment Services Directive 2 (PSD2) being implemented across Europe recently, merchants selling digital content and services are likely to see a substantial drop in card-based payment conversion. This is due to strong authentication requirements that will become mandatory later in 2019. As a result, merchants will likely look for supplemental, alternative payment methods which provide better conversion. Carrier billing is one of the strongest candidates thanks to its widespread reach (any mobile device user can make payments) and exemption from the PSD2 regulations.
Additional growth for carrier billing will also be coming from segments that have traditionally not used carrier billing in Western Europe: digital publishers, public transportation services and ticketing providers.
While carrier billing is widely used by these segments in the Nordics (see our case studies with EasyPark and Aftonbladet), merchants in Western Europe have so far not adapted them. However, excellent commercial conditions and technical quality of modern carrier billing platforms will likely lead to significant uptake of carrier billing in these segments in the near future.
In the report, we have profiled the digital ecosystem and demographics of each of the major Western European markets. We have additionally included internal data from Fortumo, sharing information on what carrier billing solutions look like in the country, as well as data on user spending behavior which merchants can use to localize their payment strategy.
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