Managed payment services offer fast route to market for telcos and...

Managed payment services offer fast route to market for telcos and merchants

Filippo Giachi, VP – Asia Pacific, Middle East & Africa, DOCOMO Digital

Faced with steadily declining revenue from traditional voice and messaging minutes, mobile network operators (MNOs) across the world are exploring new ways to make money from the sale and distribution of digital content across their networks. And with Coronavirus lockdown restrictions set to continue and even intensify, demand for streaming video, audio and gaming subscriptions alongside in-game content and productivity app downloads remains significantly higher than it was this time last year before the pandemic first emerged.

Operators can capitalise on that trend by helping sellers distribute content to a broader audience via their mobile networks, including their own large subscription bases in multiple geographies, and taking a percentage of each successful transaction completed via direct carrier billing (DCB). But forging partnerships and setting up billing system integration for each individual merchant whilst navigating local financial regulation can be complex and time-consuming – for many, the fastest route to market is to contact a third-party payment platform provider to do the legwork on their behalf. Payment service providers like DOCOMO Digital offer several benefits for MNOs looking to expand their merchant ecosystem and quickly start collecting revenue from different sources via App Stores, bundling deals, value-added services (VAS), over the top (OTT) subscriptions or non-digital goods for example.

"DOCOMO Digital offer several benefits for MNOs looking to expand their merchant ecosystem and quickly start collecting revenue from different sources via App Stores, bundling deals, valueadded services (VAS), over the top (OTT) subscriptions, or nondigital goods, for example."

That includes providing a single point of integration which standardises the onboarding process in line with operator guidelines from the outset. Once the first merchant is set up, others can be immediately and automatically added whenever required with customised options also available to accommodate individual service provider specifications and branded checkout experiences. As a modular, micro servicesbased solution DOCOMO Digital’s payment services platform (dubbed Sakura) simplifies integration by creating a single application as a suite of small services which use lightweight, technology agnostic protocols to communicate with the underlying infrastructure. Consequently, it can be easily integrated into MNO’s existing core infrastructure, reducing deployment costs and removing a lot of the complexity that would otherwise be involved." That ease of integration speeds up time-to-market for both telcos and merchants, with additional application programming interfaces (APIs) that link both parties’ systems subsequently handling the subscription/bundling management functions and broker charges between the two of them. DOCOMO Digital also handles merchant settlement and reconciliation reports – including automated subscriber refunds and compensation reports - which have previously proved difficult for telcos to process in a timely manner.

Operators can selectively approve or block individual services through the management and reporting dashboard which gives additional insight into billing performance and user activity from one month to the next. Support and maintenance resources included in the managed services contract also offer technical assistance to keep management and billing systems running smoothly to minimise any lost fees due to downtime.

There are other advantages for merchants beyond access to telco subscriber bases which run into millions of potential customers for their goods and services. They don’t have to spend time developing their own APIs to interact with telco systems for example. They can get to work with companies like DOCOMO Digital which already have much experience at facilitating digital payments for telcos and merchants and have specific knowledge of local markets where legislation governing financial transactions can vary considerably from one country to the next.

DOCOMO Digital’s Sakura payment services platform is already used by multiple MNOs around the world, and can be enhanced with the company’s fraud management and bad debt solution which uses advanced machine learning (ML) algorithms to protect operators from mobile payments fraud by identifying unusual behaviour and attack patterns in real-time. The need to meet national and regional rules on the purchase of digital and physical goods is a critical issue for telcos. However, many are also concerned about the processing and storage of customer data in off-premise systems operated by third-party payment providers. As such payment service providers need to reassure their telco customers that their hosting facilities operate in full compliance with data protection frameworks such as the European Union’s General Data Protection Regulation (GDPR) while simultaneously demonstrating that the managed services model (a combination of upfront implementation fees and subscription charges) provides better value for money compared to the telco manhours typically involved in the installation, configuration and maintenance of in-house systems to do the same thing.

All forms of managed service invariably provide the organisations leasing them with the common benefits associated with outsourcing responsibility for system, process, application and infrastructure provisioning and maintenance to a thirdparty provider.

Managed payment platforms like DOCOMO Digital’s have been finely tuned to meet the specific needs of telcos, however, by making in-app purchase flows for digital services seamless and quick for subscribers. In maximising the convenience and minimising the effort that operators expend negotiating and managing their merchant relationships, they also provide a solid foundation to quickly expand DCB revenue and sustaining a steady subscriber base by making it easy for consumers to purchase the goods and services they increasingly want.

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