Answer
Oct 05, 2021 - 11:09 AM
There are pros and cons to each method which we examine below and lots of nuances about the specific implementation of Direct Carrier Billing that will affect your conversion rate.
But yes, in general, if your brand is a no name brand or your ecommerce store is new, Direct Carrier Billing has a higher purchase conversion rate i.e. percentage of site/mobile visitors who buy from your site.
Research by Juniper shows that DCB has a conversion rate that’s 10% to 14% percentage higher than the conversion rate of credit cards.
But although studies have shown that Direct Carrier Billing (DCB) will grow from its 2018 position of $28 billion to $90 billion by 2024, credit cards remain the primary payment method with over 2.08 billion credit cards in circulation globally, and annual volume is estimated to be up to $1.82 trillion by 2024.
Why Customers Love Credit Card Billing (CCB)
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Credit cards, perhaps the most-trusted method of e-payments, came into the e-commerce scene in 1994. These cards are issued by banks or credit unions and allow the cardholder to pay for products and services. The cardholder accrues the amount spent as debt and also has to pay interest.
Interestingly, in 2020, over 79% of Americans own at least one card, with over 1.12 billion cards in circulation. So why do customers love credit card billing? Well, for one, it’s:
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Convenient: CCB is a trusted and established payment ecosystem, so it’s easy to use.
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Special Bonuses: Making purchases with credit cards often attracts special perks like extended warranties, bonuses, and rewards from loyalty programs like air miles.
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Popular: Several organizations offer these services, meaning they’re more credit card options to choose from.
Why Customers Love Direct Carrier Billing (DCB)
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Direct Carrier Billing is a simplified payment method that allows customers to use mobile billing while purchasing items online. The transaction is usually executed with the help of a secure PIN and an OTP (One Time Password)
One thing that makes DCB appealing is that transactions performed with this method are charged straight to their mobile phone bill, and users don’t need any other payment methods like a credit card, just a mobile device and a SIM card.
But that’s not the only reason why users love using direct carrier billing; here are a few:
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Speed: DCB is perhaps one of the fastest payment methods available. Payments through DCB are instantaneous and take less than 10 seconds to complete.
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Accessibility: Users have easy access to DCB. All you need is a phone, a network provider, a SIM card, and you’re good to go.
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Security: User identity and payment details are secured and protected by network providers.
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Replaces credit cards: DCBs are an excellent alternative to credit cards, especially in the unbanked regions of the world.
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Independent of Banks: DCBs don’t rely on banking infrastructure to complete a transaction.
And sure enough, with all these advantages, customers quickly embraced DCBs. Conversion rates vary between industry, country, customer devices, channels, and payment methods but in general Millennials and Gen Z who prefer speed, prefer DCB.
50% of checkout abandonment happens because of poor checkout flows, and numbers can take a massive toll on your business.
In this race to satisfy the speed demands of today’s customers, it’s pretty clear that DCB and CCB are a mile apart. DCB takes under 10 seconds to complete each transaction, while CCB can take as much as 30 seconds.
But short processing time isn’t the only reason why DCB outperforms CCB because with DCB, there are only two steps involved in the payment process, and there isn’t any need to input external information. Meanwhile, with CCB, users must perform several steps before each transaction is completed.
DCB just hasn’t taken off in the US in a big way, perhaps because credit cards are much more widely used than in the rest of the world.
The major carriers also seem to have de-emphasized it. They made splashy announcements a few years ago but have been quieter recently.
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