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Gerald Tauchner, CEO, DIMOCO: "Direct Operator Billing - the most powerful & successful payment method for billing digital content"

Tuesday 20 August 2013 | 02:03 PM CET

Gerald Tauchner, CEO, DIMOCO. DIMOCO develops, operates and markets a Mobile Messaging and Payment Transaction Hub. With this hub DIMOCO bundles mobile operator connections in the European countries and connections to messaging hubs worldwide. Over these connections DIMOCO provides business customers with the means to handle SMS messaging solutions and mobile operator payment services – the billing of digital content with the consumers’ mobile network operator bill.

As the app economy continues to gain momentum, MNOs see themselves faced with the growing challenge of securing a share of the mobile commerce revenue flowing across their networks. Within this context, direct operator billing is emerging as a powerful weapon for MNOs. How can MNOs and direct operator billing services providers cooperate in order to secure a significant share of the mobile commerce market?

Gerald Tauchner: Direct Operator Billing is the most powerful and most successful payment method for billing digital content. I wouldn’t call it a weapon for mobile network operators, I would rather stick to the fact that direct carrier billing is the chance for digital content providers to profit from higher conversion rates and gain more revenue at the end of the day.

What we do in making direct carrier billing even more successful than it is right now is to concentrate on our strong business relationships with mobile network operators and to improve billing / payment opportunities where we can. Our goal is to make the payment method for business customers and consumers as easy and user-friendly as possible. Therefore, it was and still is DIMOCOs’ advantage to be directly connected to mobile network operators.

In your opinion, will direct carrier billers grow to be significant players in the mobile commerce space? If yes, what would be some of the main reasons for this?

Gerald Tauchner: We are not talking about future scenarios; we are talking about the present. In comparison with all the other types of mobile payment billing methods, direct carrier billing is already the most successful billing method in the digital content industry today.

It will continue to grow in the same way over the next few years. For example Juniper Research predicts a total remote mobile payment gross transaction value for digital goods of 200 billion USD in 2017.

The reason for this development is the evolution within the digital generation. More and more digital content is used – in different segments – plus what we see is that the digital generation is on multi-screens, consuming digital content everywhere, anytime. Direct carrier billing is the billing method that can easily be used on and for every electronic device – without registration, with a fast check out process for consumers, as well as simple integration by the content provider.

In countries where the credit card penetration rate is not that high, direct carrier billing has even more potential. All these users can be payable customers if content providers integrate the billing method into their check out process.

What is DIMOCO’s strategy at the present moment when it comes to establishing a solid presence worldwide? What are some of the most relevant developments for your company over the past 12 months?

Gerald Tauchner: Our strategy was and still is that DIMOCO is going to cover more and more countries. With our direct connections to mobile network operators we are at the forefront in these countries, that’s what our customers really appreciate about working with us.

In your opinion, what are some of the main challenges for direct operator billing services providers? Is consumer adoption / consumer awareness one of them?
Gerald Tauchner: The most amusing challenge is explaining to people who are still talking about future opportunities that a payment method that can be used by the masses already exists – there is no need to wait for new technologies!

As the operator of a successful mobile carrier billing service, your company is ideally placed to provide a realistic overview of the state of the m-payments ecosystem in Europe. What are some of its main characteristics and where is it headed?

Gerald Tauchner: Operator payment is rapidly converting from Premium SMS Services to a flexible and convenient payment method for digital internet goods. This approach is already known under the term “mobile remote payment for digital goods” in contrast to “proximity payment for physical goods” where NFC is expected to be the predominant payment method in the future.

Obviously, for remote payments NFC will not be much of a factor. For the remote use case, payments through direct operator billing interfaces in combination with user-friendly and secure authorization methods like mobile TAN have already proven to be a very strong and competitive factor. Just take the online gaming industry, where in every region Operator Payment is always among the top three payment methods for browser games, social games and the so called massively multiplayer online games (MMO games) - far ahead of any credit card payments!

Given the fact that the virtual goods business, which is inherent to the online gaming industry already has a global revenue potential of roughly eight billion USD and grows like 30% each year, we are not talking about a niche industry anymore. From a business perspective the digital goods economy and mobile operator payment just perfectly fits together. And as we see other business verticals like the media industry catching up quickly, operator payment will get an additional push towards a widely accepted and embraced payment method. Operator payment is not intending to substitute any other payment method like credit card or cash but rather complements those method with even being a frontrunner in new digital business models like the virtual goods economy.

What are some of DIMOCO’s plans for the future? Are then any particular trends in the direct carrier billing services space that you feel will become relevant in the coming two / three years?

Gerald Tauchner: The digital content market will continuously grow and the billing method with the broadest reach will win, just adding that after cash direct carrier billing already has the broadest potential reach.