Mobile operator billing has proven itself as a preferred payment method for digital goods. Part of that success is due to the low availability of credit cards in emerging markets. Another important factor (why even people in mature economies who have five different credit cards like it) has to do with convenience.
To pay with a credit card, you need to grab your wallet and enter a 16-digit credit card number, expiration date, billing address and security number — all on a small mobile screen. With mobile operator billing? Your phone number (if it isn’t already automatically detected) and 4-digit PIN. That’s it.
For digital goods, mobile operator billing often converts up to 10x better than credit cards. Also, attempts have been made to see if mobile operator billing's success translates from the world of apps, games and digital goods to intangibles like parking, movie and bus tickets.
But what about physical goods?
Everyone who has tried buying something online from a mobile phone knows that the experience sucks. The first time purchase, using your credit card, from a mobile website, very often has more than 7 steps and it looks something like this:
How many people actually complete this?
How can we simplify this?
We asked — if we can sell physical merchandise directly from the app with modern app-store-like shopping experience, mobile operator billing and pre-filled delivery address, would we see the similar conversion uplift that we’ve seen in digital goods?
Today, we’ve set out to test this in partnership with Rovio and SingTel in just-launched Angry Birds Plush Toys eShop in Singapore. Post-paid subscribers of the mobile operator SingTel can now buy Angry Birds plush toys through a much simplified mobile checkout process:
Step 1 - Branded plush toys make good candidates to be sold via mobile operator billing, because they are not very high-ticket items (costing between $5-$50), have relatively high margins and are usually impulse purchases.
This is relevant, because with impulse purchases, the decision whether to buy or not hinges on the simplicity of the purchase process. If the checkout flow is too complicated, people abandon the shopping cart.
Step 2 - Enter phone number. If you're on a mobile connection over 3G and mobile operator can detect your phone number it's already pre-filled and you can proceed directly to step 4.
Step 3 — If you’re not on 3G, confirm your payment with a PIN that you receive in a text message.
Step 4 — Enter delivery address. If the mobile operator has your mailing address already on file, they can simply ask for your consent to share it, and it would already be pre-filled! (This feature depends on mobile operator support and is not yet used in the Singapore pilot).
And — all done!
As you can see, with mobile operator billing and address pre-fill, it would be possible to offer true 3-click checkout for physical goods not only in the case of repeat purchases, but also for the first time purchases! — unprecedented with any other payment method.
So how much does this increase conversion rates as compared to conventional mobile checkout?
In the first week, we’re already seeing five times lower shopping cart abandonmentthan previously with credit-card billing based checkout. While it’s very early to draw any firm conclusions, early results are very promising.
If you’re based in Singapore, you can check out the Angry Birds Plush Toys eShop here.
If you’re interested in expanding your payment coverage through carrier billing, please fill out the form below and we will get in touch with you: