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Spotify, Facebook tap carrier billing for streamlined checkout

Spotify and Facebook are leveraging mobile payment firm Boku’s new Phone-on-File platform, which enables customers to store mobile phone numbers as their payment method of choice, offering a streamlined checkout process for one-time and repeat purchases.

Boku claims to be the premiere carrier billing provider that enables phone numbers to challenge credit cards via any platform for subscriptions or frequent purchases. Facebook and Spotify both offer opt-ins at consumers’ first purchases that ask to have their numbers on file for future checkouts, a further step in the growing amount of tap-to-pay services available on mobile.

“This will help generate more commerce as it allows consumers to more quickly complete a purchase and, in turn, drives significantly higher conversion for merchants,” said Ray Ramillosa, vice president of marketing for Boku, San Francisco, CA.

“As carrier billing continues to mature and function more and more like credit cards do, you’ll also see carrier billing offered as a payment method in more and more places.”

Cross-platform solution
The Phone-on-File feature is the first of its kind that has been created with direct carrier approval and that asks customers to agree to a standing authorization to merchants, which will enable their phone bills to be charged up to a certain limit.

Following the rollout of Facebook’s “Buy now” button, this move brings the social network even further into the mcommerce sector, lending credence to predictions that social commerce will be a trend to watch in 2015 (see story). Merchants using carrier billing will benefit from the one-click checkout function as well.

Boku believes that mobile phone numbers are an effective method for streamlined purchasing options.

“Mobile phone numbers, particularly when paired with an SMS exchange (e.g. user has to reply Y or enter a PIN code sent via text to confirm) can serve as an efficient and secure means of authenticating the user,” Mr. Ramillosa said. “In the case of Boku’s Phone-on-File, the user only has to complete this authentication once before their streamlined checkout experience is enabled.”

Easy sign up
Phone-on-File may also help Spotify and Facebook compete with conglomerates such as Amazon with easy one-click checkouts. Consumers will receive a one-time SMS authentication upon signing up for the platform.

After the first authentication is confirmed, users can bypass the usual second authentication that is required, providing for faster service. The feature can also be accessed from any purchasing platform, including mobile applications, mobile Web and desktop.

Boku hopes this feature will help bolster merchant’s conversion rates. The company has integrated Phone-on-File with a handful of merchants worldwide and has seen an average lift of conversion of 5 percent, with user billing failures also reduced by 50 percent.

For merchants, retailers and brands seeking to ramp up sales on mobile, Boku advises that alternative payment methods could be a smart solution.

“Consider alternative payments, including payment methods such as carrier billing, as part of your monetization strategies if you haven’t already,” Mr. Ramillosa said.

“While credit cards are dominant in some parts of the world, alternative payment methods provide a means by which merchants and brands can reach and convert customers that can’t or won’t pay with credit cards and/or bank accounts.”

Final Take
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York