Payment with Telco

Alternative payment method that can boost your apps purchase in emerging markets Anton Rifco anton.rifco@gmail.com
Saturday, 4 May, 13

Why Telco Payment?

Your potential customers in emerging markets most likely doesnt have CC
Theres only 7.8 mio CC holders in Indonesia*. The population there is 240 mio (3000% of its CC holders). While the forecasted mobile penetration will be 173.5% by 2017**

Too many CC Fraud cases in Emerging market, which makes VISA & MasterCard reject transaction originated from there
* )http://www.thejakartapost.com/news/2013/01/14/tougher-business-credit-card-issuers-2013.html **)http://www.marketresearch.com/Business-Monitor-International-v304/Indonesia-Telecommunications-Q1-7259408/ Saturday, 4 May, 13

Why Telco Payment?

Because its convenient for users

Saturday, 4 May, 13

Type of Transactions
SMS purchase
Users send SMS with keyword to specific short-code (4545)

USSD purchase

Users press USSD short code *123*1*2# then press call. Or... Users enters tree based USSD (UMB) on short code *123#

WAP (browser-based) purchase

Users click purchase button in a specific website

Saturday, 4 May, 13

How to ?
Different telco has different implementation for the integration. But.. these are the common generic flows:

Incoming MO (Message Originating) with trxid Charging Request in MT (Message Terminating) Charging Response (DN) arrives within few seconds

Saturday, 4 May, 13

How to ?
Some other Telcos implements:

MSISDN* detection in HTTP header HTTP_X_UP_CALLING_LINE_ID One-time-password method (sms) per each transaction HTTP redirection to Telcos WAP gateway to detect Msisdn / perform the charging

*) MSISDN, Mobile Station International Subscriber Directory Number. Or, known as phone number in international format, +62812222 Saturday, 4 May, 13

Problems
Due to the inexistence of standard across Telcos, its very hard for Content Providers (CP) to do integration Normally Telco wants bigger portion (>50%) of the revenue share, especially with new players (CP)
*) Content Providers (CP) is the company to provide the value added service to end users (e.g. game, ring back tone, etc.) Saturday, 4 May, 13

Alternative for CP
Due to the problems mentioned earlier, Normally smaller CP* goes to bigger CP for the payment integration This way, those smaller CP only got very small portion of the revenue

*) Content Providers (CP) is the company to provide the value added service to end users (e.g. game, ring back tone, etc.) Saturday, 4 May, 13

Situation in the Telco

In the era of communication, services are provided by websites and apps Those services override most Telco services, such as callings, messaging, and even value added services Telco seems to have sad future, becoming dumb pipes :(

Saturday, 4 May, 13

The Telco Ways

Telcos are struggling to find ways to become smarter pipes :) To act smarter, they need to take smarter strategies Especially, for the messaging channel, instead of giving away free sms promotions, they can alter the SMSC* resources to Content App
*) SMSC, Short Message Services Center, centralized machine to manage the text communication b/w subscribers, or subscribers to applications Saturday, 4 May, 13

Telcos for Startup

Today is the era of start-ups* More startup, result in more services Startups need alternative of payment system that can reach every people (remember, most people own phone)

*) startups or Startup Companies, is a company, a partnership or temporary organization designed to search for a repeatable and scalable business model. Saturday, 4 May, 13

Telcos for Startup

If only Telcos can reduce bureaucratic process in their Payment System integration, they can have more partners More partners result in well-occupied resources Then, they can reduce their revenue share to <20%. pleaseee... :)

Saturday, 4 May, 13

Resurrection of Telco

Saturday, 4 May, 13

Thank you

The writer is a telco and startup enthusiast and practitioner. He worked in the biggest Telco company in Indonesia, one of the biggest Telco vendor in world, and in a Singapore-based Content Provider. Currently hes starting his own venture in digital tourism industry

Saturday, 4 May, 13