While direct operator billing - or carrier billing - presents an opportunity for mobile operators to improve consumers' mobile commerce experience and drive the uptake of local apps, challenges around the service may cause them to be reluctant to extend the service.
This is according to World Wide Worx MD Arthur Goldstuck, who says the benefits of carrier billing are significant for all parties involved - from app developer and operator, to end-user - as the option makes the purchase of digital services and products more seamless.
However, says Goldstuck, apart from carrier billing systems not being "the greatest" in terms of integration at the moment, there are other challenges - such as the increased likelihood of bill shock and the fact that the Reserve Bank is wary of any service that makes airtime look like currency - that present a problem for operators.
"So, while having more carrier billing options would advance the apps environment and the uptake of local apps, carriers may not be too eager to look for additional [billing] options."
He says this is a common issue, rather than one that pertains specifically to SA. "People don't like to pay for anything that could lead to surprises."
Devil you know
Tech analyst Liron Segev, from TheTechieGuy.com, says there is not a lot of awareness around carrier billing options in SA, but payment for mobile services using a credit card - as per the most common method - may be a better option at the end of the day.
"When you pay for apps using your credit card, you always have recourse should something go wrong - for example, if you are charged for something wrongfully.
"You are always right when it comes to money coming off your credit card - whereas you don't really know who has the upper hand when it comes to other options."
Telkom carrier billing
Nevertheless, Telkom Mobile's move to introduce integrated carrier billing for local BlackBerry customers last week generated interest.
The operator said its new billing service enables Telkom Mobile customers to purchase applications from the BlackBerry World storefront and charge it directly to their mobile phone bill or airtime.
The service was made possible through Telkom Mobile's newly-developed event billing service, which Telkom says it plans to use for similar services on other platforms.
While the partnership with BlackBerry is the first carrier service Telkom's mobile arm has introduced, the company says it is "in the process of on-boarding more partners". Telkom could not give specifics, saying it would make announcements as services go live.
Event billing, explains Telkom Mobile, is a mobile payment solution that enables customers to pay for services offered by wireless application service providers using their mobile account. Payments are charged to the subscribers' postpaid account, or in the case of prepaid accounts, they are deducted from existing credit.
"It is a convenient solution that negates the need for a credit card or bank account. Typical purchases include applications, music and subscription services such as daily horoscopes."
Other operators
Vodacom, which has offered carrier billing since 2011, says its long-term plan is to offer carrier billing as a value-added service.
Vodacom currently offers direct carrier billing for the BlackBerry, Microsoft and Nokia app stores. Direct carrier billing is also available on Vodacom's App Store.
The operator first introduced carrier billing on its own app store in 2011. This was followed by a carrier billing option via BlackBerry in 2012, and Nokia and Microsoft in 2013.
The operator says the service was introduced in a bid to increase the penetration and usage of premium mobile apps, as well as to increase the market for local developers to offer premium apps and grow mobile commerce.
Cell C says carrier billing information is competitive and "as such Cell C cannot provide any details".
MTN had not responded by the time of publication.
How carrier billing works
Frost & Sullivan defines direct carrier billing, in its simple form, as a service that allows consumers to pay for purchased items along with their phone bill.
"Mobile subscribers authenticate an online or a mobile transaction at the time of purchase, and a charge - equivalent to the item being purchased - is placed on their phone bills. Consumers pay their bills at the end of the month, and a few days (or weeks) after that, the merchant is paid by the mobile operator.
"Thus, by offering a convenient way to pay for purchased items, direct carrier billing helps to improve the customer's mobile commerce experience and can become a growth driver for the mobile payments industry."
Vodacom: When purchasing an app, customers have the option of how they would like to pay. If a customer selects Vodacom as a preferred channel of payment, the request is authorised through the Vodacom system. An e-mail confirmation will then be sent to the customer confirming that the request was successful and the content can be downloaded. If the customer is on prepaid, the purchase is deducted from the customer's airtime balance. Postpaid customers will have the purchase added to their monthly bill.
Telkom Mobile: The Telkom Mobile Event Billing solution includes a double opt-in service to provide customers the added reassurance that they will not be billed for content offered by WASPs that they did not specifically authorise. The double opt-in service will require that customers confirm they would like to subscribe to the service offered by a WASP before Telkom Mobile will bill them for the subscription.
Customers will also have the option to contact the Telkom Mobile call centre to cancel their subscription at any time they wish to. Once the cancellation has been effected, the customer will receive a SMS notification to confirm the subscription has been cancelled.
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