Why operators need to gamble on carrier billing
Rob Weisz, CEO of mobile payments specialist fonix, on the advantages carrier billing can offer to operators
Despite smartphone penetration reaching 1.91 billion globally, desktop remains the dominate platform in online real money gaming, accounting for 86% of all bets placed. Â However, with the desktop gaming market reaching saturation point, the industryâs next phase of growth will undoubtedly be driven by mobile, so why arenât more operators getting on board with carrier billing?
For many online gaming operators, it comes down to two key issues. Firstly, the fees, which largely stand between 11% and 15% for mobile carrier billing in the UK. In an industry completely driven by numbers, many operators see carrier billing as being too expensive.
Then thereâs the payment experience. Carrier billing hasnât always been the smoothest process as players had to come out of the game experience to visit an external payment site to make a deposit, but times are changing.Â
The tide is turning
It was once inconceivable in the video games industry that revenues from console would ever be exceeded by those of mobile games. However, this year that could well be the reality with the online gaming industry destined to follow suit.
Many of the challenges that were previously inherent with carrier billing are finally being eroded. Carriers have recently changed their commercial approach to this emerging payment solution and are keen to drive aggressive pricing for key sectors in partnership with carrier billing payment intermediaries.
In addition, weâve seen the emergence of breakthrough technologies and consumer flows which enable operators to seamlessly integrate direct carrier billing within their existing cashier options, allowing players to top-up their accounts without leaving the game and missing a moment of the action.
Itâs the immediacy of mobile which is perhaps the biggest threat to the dominance of desktop. With 4G networks and Wi-Fi available almost everywhere plus the screen sizes of mobiles and tablets constantly increasing, the advantages of stability and player experience which were once unique to desktop can now also be found on mobile.
As a result, mobileâs share of the total number of online bets placed is currently growing at a rate of 2% per month, which means that in itâs not going to be long before we see a point where desktop is dethroned and mobile takes over as the dominant platform.
Operators missing the big picture
While carrier billing does cost more than credit card, what many operators are missing is direct carrier billing also serves as a highly effective acquisition and CRM channel.  Smartphones allow players to act on impulse and visit a gaming website or download an app whenever the mood takes them. Itâs here that the strength of carrier billing as an acquisition tool really comes into play, especially now that frictionless deposits can made.
Therefore, players can be on board and spending money sixty seconds after visiting the app or site, which is one of the key reasons why operators such as Small Screen Casinos, which operates âThe Phone Casinoâ are embracing carrier billing.  Since adopting smart carrier billing, Small Screen Casinoâs has seen a real uplift in both the acquisition of new players and the conversion of free gamers into real money players.
Through effective SMS CRM, it has converted around 70% of customers to debit/credit card within four weeks, making carrier billing much cheaper and more effective than the best bonus offers it could give for acquisition.
In the last eighteen months the cost of acquiring new players has surged and reports suggest these costs could be set to double within the year. As a result, its no surprise that operators are looking to optimize their acquisition spend and are looking again at direct carrier billing and the acquisition uplift and subsequent benefits to incremental revenue it can deliver.
The bottom line is that desktop wonât always be the safe bet that it has been for online gaming operators. As the mobile continues to increase its share of the total bets placed online, it will be those operators who are able to look beyond their preconceptions of how mobile carrier billing has evolved that are set to win big as mobile gets set to dominate.