What Role for Carrier Billing in Digital Ticketing?

May 2023

Fintech & Payments

Michael Greenwood

Principal Analyst

As we discuss in our latest carrier billing research, carrier billing’s role in digital ticketing varies by region.

In developed economies, many users have established payment methods integrated into their mobile device. The digitalisation of ticketing is increasing the use of mobile payments for both event tickets, and transport tickets, but this is not inherently going to lead to a significant growth in the carrier billing market. Carrier billing offers frictionless mobile payments that would be well suited to paying for regular small ticketing costs.
 
In Europe, there is the issue of a spending limit. These limits, $54 (€50) per transfer and $325 (€300) per billing month, make carrier billing limited in its ability to cover high-value spending. Most plane tickets exceed the transfer limit, equally many live concerts and sports tickets also cost more than this spend limit.

This also presents issues in the EU for the use of carrier billing for MaaS solutions. The aim of MaaS is to have all the transactions for urban transport under one roof. This would be made up of many small payments, almost never effected by the one-off payment spend limit, but would add up to a significant cost over time.

In cities with more expensive transport systems, using carrier billing to pay for everyday transport would leave very little leftover spending with the monthly limit. Many users will choose to use an alternative payment method that does not have the spending limit.

Juniper Research’s View

Ticketing presents a significant opportunity for carrier billing vendors. The growth of mobile digital ticketing means that consumers will be looking to make payments for these tickets with a seamless mobile payment method, such as carrier billing.

Due to spending limits, EU-based vendors should look to focus its offering on low-value regular payments, such as parking or cinema tickets. For vendors outside of the EU, especially in developing countries where mobile payments are already popular, vendors should look to integrate their payment solution into emerging MaaS solutions. This does not only provide an excellent source of revenue, but also gives them access to a rich vein of high-value consumer data, which can help them improve their own offering and supply to other interested parties.
 
Carrier billing will not gain a strong position in digital ticketing markets where it is not already an established payment method. In developing markets, it has the potential to become a popular mobile payment method for ticketing, particularly travel. This use, characterised by smaller-value, regular payments, plays to carrier billing's strengths.

The primary barrier here, however, is the lack of infrastructure on the transport network of these countries. In places such as Thailand and Kenya, improvements are already under way, but this is not the case everywhere else. If integrated with NFC (Near-field Communication), this would allow a truly seamless payment experience. There will be competition from digital wallets and banking apps, which can offer the same user experience. In many developing countries, the unbanked population is significant; limiting the reach of banking apps. Digital wallets are a meaningful competitor for carrier billing, and vendors should look to leverage existing relationships between MNOs and users to maximise the use of their service.

Want more insights and statistics?

Download our latest carrier billing whitepaper, which examines the role that carrier billing is playing, and will play, in the eCommerce sector across the developing world. You can also visit our infographics area, where you'll find an infographic containing our latest carrier billing market statistics.