Big changes in Mobile Carrier Billing Will Affect Payment Possibilities

In most businesses, it makes a difference whether a firm's direct costs are 40 percent or 10 percent. Up to this point, revenue splits of about 60 percent for the merchant and 40 percent for a mobile carrier have sharply limited the types of products that can be sold using the mobile device and carrier billing.

In other words, products bought and billed directly to the mobile statement have imposed higher transaction costs, by far, than use of credit and debit cards, for example. Zong knows all about carrier billing, but has been predicting there would be significant movement on the charges, as Zong volume has grown. That appears to be happening.

The carriers are dropping the revenue splits to closer to 10 percent, from 40 percent. “The carriers won’t go below 10 percent for digital or virtual goods, but they will lower their rates for physical,” says David Marcus, the CEO of Zong.

Zong Sees Mobile Payments Coming for Physical Goods Sooner Than You Think