Carrier billing is hardly a new concept, but some coverage has focused on renewed carrier billing efforts from the likes of Microsoft, Apple, Amazon and Google. Part of the reason that carrier billing has not, thus far, gone very far is that most consumers trust their carriers less than a convicted child molester politician.
But carrier trust and likability aside, carrier billing has—on paper—a lot going for it. And payment facilitators are uniquely positioned to benefit from this move.
Carrier billing sidesteps some security concerns because the payment details reside with a company that already has them. Although that’s certainly not risk-free, it’s a zero increase in risk. More precisely, it’s less risky than turning over payment credentials to an unknown merchant for a one-time transaction, especially if it’s a faceless e-commerce site.
From the merchant’s perspective, there is the potential for much lower fees as interchange—in the traditional sense—is gone, especially if the consumer pays that carrier bill via check or, much more likely, ACH.
To the extent that these latest efforts make any headway with carrier billing, it is potentially great news for payment facilitators. Alternative payments of almost any type are perfect for payment facilitators because PFs are in the ideal position to help because they are already in the funding stream.
PFs already get paid as they distribute funds to merchants. Consider carrier billing just another payment sort, which the PF can handle for the merchant. But when handled through the PF, ease of operation and consistent reporting and accounting makes it far smoother.
Merchants appreciate payment alternatives, especially those that have the potential to lower transaction costs while making shoppers feel more secure. Mobile payments are slowly catching on, but the beauty of the mobile wallet is that the shopper grows at ease with the wallet, but the payment vehicle feels invisible.
In other words, a shopper can make a onetime change from a Visa card to an Amex or ACH or to carrier billing—and then all subsequent payments feel as effortless as before. The trick is in getting the wallet’s creators—be it Apple or Google—to embrace that payment mechanism. That’s why it is interesting that both Apple and Google are at least exploring carrier billing options.
But to the extent that a PF offers all of these payment options and support merchants throughout, carrier billing is just one more reason merchants will crave someone to deliver payment simplicity.