Carrier billing has two primary advantages over card-based payments in online environments:
- Bigger coverage. Very few (if any) countries in the world have more bank card owners than mobile phone owners and in most countries; mobile phones are available to several times more people than bank cards.
- Higher conversion. Carrier billing is frictionless and does not require a user to enter any information such as their card number, name or address during the checkout process. In online environments, this means fewer users give up on the payment and more successfully complete it.
So how much do you stand to gain from the increased coverage and conversion that carrier billing brings?
We have created a free tool that helps you find the answer. The carrier billing revenue calculator asks for your existing card-based payments performance for a specific market and estimates how much additional money you could be earning.
In order to illustrate the logic of the calculator, let’s calculate a sample estimate for India, a market well suited for carrier billing:
- Let’s say you have 100,000 users to your service in the market and 5% (5000) of these users are already paying you through bank cards
- Each paying user pays you $5 per month, which means your monthly revenue from card-based payments in India is $25,000
- Based on World Bank Data, debit card ownership in India is 22%, meaning that only 22,000 users from your 100,000 are even able to make payments to you
- That means 17,000 of your users have a bank card, are not paying users and would most likely not be paying with carrier billing either, so let’s leave them aside
- Taking into account that mobile ownership in India stands at 77%, we are left with 60,000 users who have access to your service, own a mobile phone but don’t own a bank card
- Assuming the conversion rate and spend is the same with carrier billing as with bank cards, 3000 additional users would be making payments to you, generating an additional $15,000 per month
Of course, this is a rough estimate due to several reasons. If you have a mobile service or app, all of your users will have a mobile phone and the mobile penetration rate in the market is irrelevant. At the same time, conversion is likely to be higher with carrier billing. Most Fortumo merchants report on average 10x higher conversion with carrier billing compared to bank cards. And finally, spending of users will also differ based on the payment method.
In order to account for these differences, the revenue calculator gives you 4 estimates:
- Assuming spend and conversion is the same as with bank-based payments
- Assuming spend is the same and conversion 10x higher compared to bank-based payments
- Assuming spending is similar to users of other merchants using carrier billing and conversion is the same as bank-based payments
- Assuming spending is similar to users of other merchants using carrier billing and conversion is 10x higher compared to bank-based payments
Want to find out what the different estimates are for you, for any of the 90+ markets that Fortumo covers?
Click "Download now", enter your contact details and you will get access to the calculator immediately!
If you have any questions about the calculator, let us know in the comments section. And if you want to start using carrier billing, you can sign up with Fortumo for free.