IGAMING Unravelling Carrier Billing - DIMOCO
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1
Unravelling
Carrier Billing
iGAMING
Inassociation
In association Webinar
Webinar Media Media Partner
Partner
WHITE PAPER 2020/21
2
ABSTRACT
ABSTRACT
CONTENTS
If you are looking for instant customer acquisition, new-player on-
boarding, reduced cart abandonment and ten-times the penetration of
credit card – then look no further, because you might be leaving up to
70% of potential revenue on the table.
INTRODUCTION3
Direct carrier billing – where your customer uses their phone bill to pay A SNAPSHOT OF EUROPE’S MOBILE GAMBLING MARKET 5
and play – is a billing tool that’s available worldwide, to anyone with a
THE PAYMENT LANDSCAPE IN MOBILE GAMBLING 12
mobile, smart or feature phone, a tablet or even a smart TV and offers a
secure, one or two-click way to pay. WHAT IS DCB AND HOW DOES IT WORK? 19
WHY DCB + GAMBLING OPERATORS IS A WINNER 21
Backed by the EU’s Payment Services Directive (PSD2), it also comes
At a Glance - The value of DCB 24
with in-built protection for both players and gaming operators –
players being usually only allowed to spend €50 maximum per day with PUTTING DCB INTO PRACTICE IN GAMING 25
no more than €300 per month. Case Study - Pete the Liverpool fan leveraged with DCB 25
Case Study - Bridget wants to play blackjack 26
In this white paper we will show you how to leverage the power of Case Study - Making lotteries something millennials will love 27
carrier billing to lift your igaming services to new levels by unlocking
the latent demand of a huge number of potential customers - REGULATION, COMPLIANCE AND SECURITY 28
customers wanting to get on board so long as there is an easy way to GLOSSARY30
pay.
REFERENCES31
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INTRODUCTION
INTRODUCTION
Online and mobile gambling in Europe is big business – but shouldn’t it absolutely demand that services should be instant and easy; and want
be bigger? While a dedicated number of players engage with igaming payment mechanisms to match.
games across the continent, there are many more who would join in if it
were easier to do so. And all that is possible: direct carrier billing (DCB) – where digital goods
and services can be charged to a mobile phone bill or debited from pre-
During the coronavirus pandemic and the associated societal lockdowns paid phone credit – is a payment solution that ticks all these boxes –
that swept across continents, the hunger for online and mobile and more.
entertainment grew rapidly – however, while many did turn to casino
games, lotteries and even virtual sports betting, many more casual Offering instant and secure
gamers [who wanted a flutter] didn’t. gratification online, DCB –
also known as carrier billing,
One of the biggest barriers to getting new people to play igaming operator billing, direct mobile
games on their devices has always been how to pay to play. This isn’t billing – allows for services to
an issue reserved for the gambling industry, it is one that impacts the be rapidly paid for with one or
whole digital content business. For igaming operators, it has seen two clicks, with age verification
them miss out on a whole cohort of players who would play if they did and credit worthiness built in.
not perceive the payment option itself to be a barrier. Many simply do All the user needs is a SIM card
not have a credit / debit card or paypal, some have trust issues with and a network connection.
unfamiliar services or brands and some just want the process to be far
quicker and easier. As we shall see in this white
paper, DCB is an ideal solution
This is also a common issue for all online services that aim to target for the igaming sector as a
millennials and ‘first-wave’ Gen-Z – who are coming of age now – who result. It is perfect for on-
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4
boarding all those would-be players who lack the confidence or time
to set up a card-based account, while making it safe, secure, and
responsible to game freely.
It is quick and easy to implement, works anywhere and can be used by
anyone with a phone, it is a ubiquitous and simple way to pay. It also
taps into the nascent demand by Gen-Z and millennial consumers for
new, more immediate services and it can be used by almost 3 billion
people worldwide.
No, it isn’t perfect, but it offers so many strong advantages, especially
as a means to initially sign up and monetise new players, that it is
seriously worth looking into how it works and how to make it work for
your igaming business.
This white paper, brought to you in association with DIMOCO, a DCB
provider, and Melodi Media, a content services provider, shows you
what the opportunity for mobile and online gambling is in Europe, how
much latent demand there is among the ‘unsigned’ and how DCB can be
used to fill the gap.
The white paper also addresses some of the concerns around
DCB, including additional cost and complexity and provides a fresh
perspective on how it can be leveraged to creates new business
opportunities and new revenue streams.
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SNAPSHOT
A SNAPSHOT OF EUROPE’S MOBILE GAMBLING MARKET
Europe’s mobile gambling industry has seen impressive growth over Gross
Gross Gaming
Gaming Revenue
Revenue (GGR)
(GGR) in billion
in billion Euros
Euros
the past decade and has become one of the standout success stories
in mobile. With more consumers than ever turning to their phones for Italy 18.7
entertainment and engagement, many have also found themselves
United Kingdom 17.2
looking to their devices to gamble.
Germany 14.2
This has seen igaming of all kinds – lotteries, casino, sports book, Loot France 10.6
Boxes [in non-gambling games] and even quasi-esports/gaming tie ups 8.8
Spain
– increasingly attracting players through the mobile channel. So how
Netherlands 2.7
big is the mobile opportunity, who is driving it and what are the tropes
of mobile that are making m-gaming such a success? Sweden 2.2
Greece 2.1
The European gaming market
Finland 2.1
The global online gambling market was valued at around $45 billion in
2017 and is projected to hit $94 billion by 2024, according to Statista1. Portugal 1.8
With many European countries liberalising and legalising their online Belgium 1.8
gambling markets, the growth opportunity in Europe is immense.
Czech Republic 1.7
The gambling yield in Europe is also very high, with Italy and the Ireland 1.7
UK leading the way, followed by Germany, France and Spain. Gross Austria 1.6
gambling yield in the UK is around €16.5 billion, compared to a European 0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0
average of €18.7 billion and accounts for around 0.7% of Europe’s GDP.
Source: Statista
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Distribution of online gaming by type In 2018, the spread of gaming was led by sports betting, which accounts
for some 45% of the market. Online casinos are close behind on 32%,
while lotteries (12%), online poker (5%), Bingo (4%) make up the lion’s
share of the rest.
40%
According to the UK’s Gambling Commission2, those participating in
spread betting (93%), sports betting (73%) and casino games (59%)
were more likely to participate in these activities online.
Share of market
30%
The most evident increases in online participation occurred among
horse races (55%, a 10% increase from 2017) and dog races (48%, a
20%
10% increase from 2017). A small increase also occurred within other
lotteries (47%, a 5% increase from 2017).
How mobile are they?
10% When it comes to mobile, the global mobile gambling market was worth
around €26.2 billion in 2019 and is likely to hit €50 billion by the end
of 2025, with a compound growth rate of 10.7%, according to Market
42.5 32.4 12.6 5 4.3 3.2 Research Future3.
0
In 2018, Europe was the leading mobile gambling market with a 57.20%
Online Online Lottery Online Bingo Others share, whereas Asia-Pacific is expected to be the fastest-growing
sports casinos poker mobile gambling market at the highest CAGR of 13.8% between 2018
betting
and 2025, the research shows.
Source: Statista
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VIRTUAL GAMING
THE RISE OF VIRTUAL GAMING AND ESPORTS BETTING
Due to the coronavirus pandemic, there has been a rise in people simulation of live sports games and classic games6.
betting on ‘virtual’ events.
EveryMatrix has collated data from 10 bookmakers, showing that
Virtual horse and dog racing was already becoming a key area for esports betting activities have grown 40-fold between 9 March and 19
igaming over the past few years – up from 63% of punters in the UK April 2020. Generating an estimated 80% of the total betting volume
in 2016 to 66% in 2018 – and lockdown has ushered in a huge new can be attributed to FIFA and NBA2K.
audience watching virtual events and betting on them.
As to traditional or classic games, the report notes that League of
For example, in the US NASCAR drew an audience of 1.3 million to its Legends (38%), CS: GO (29%) and Dota 2 (18%) accounted for 85% of
virtual eNASCAR iRacing Pro Invitational Series4, a SIM race/esports the total esports betting volume in that segment.
event modelled after the motorsport.
With so many consumers hooked, it is unlikely that, even when live
Before the Covid-19 outbreak struck, analysts expected the esports events start up again, they will continue to want to play and interact
betting market to generate anything between $12 billion between with these services.
$15 billion in terms of total wagers. There would also have been half
a billion esports enthusiasts, a term used by Newzoo to describe These ‘new’ igaming services serve to highlight how vital it is to offer
individuals who are actively participating in esports – whether as instant payment and gratification to play. These are the archetypal
competitors, audiences, consumers or other. These numbers have now new players that gaming firms need to attract and which they need to
changed5. service instantly.
In analysing the market, EveryMatrix considers two main types of They also need to give them an excellent service from the get-go, as
esports competitions, taking into account the growing interest in these new ways of betting and new content types are unlikely to be
eNASCAR, NBA2K and FIFA 20. The report differentiates between going away, even when lockdown ends.
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Change in
Change in what
what people
people play
play
80
60
40
20
0
National Other Bingo Football Horse Dog Sports Betting Virtual Spread Casino
Lottery lotteries pools races races betting on other dog or betting games
Draws events horse races
Year to Dec 2015 79% 69% 79% 68% 64% 81% 36% 43% 63% 0 66%
Year to Dec 2016 79% 63% 85% 58% 66% 77% 46% 42% 64% 15% 61%
Year to Dec 2017 76% 59% 71% 58% 69% 78% 37% 33% 69% 31% 58%
Year to Dec 2018 75% 56% 69% 63% 64% 80% 40% 54% 66% 40% 62%
Source: UK Gambling Commission
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When playing when using a smartphone,
The study by the UK’s Gambling Commission2 revealed that 46% of Where areare
where people playing
you likely towhile using a smartphone?
do this?
people questioned have gambled ‘online’ in some way, shape or form in
the past year, with 55% of those having done so on mobile.
At home 70
According to this same study, The UK’s National Lottery draw remains
the most popular gambling activity, followed by scratchcards and other
lotteries. Football and horse racing are the most popular sports betting At work 25
activities.
Who is playing, where and when? Public transport 23
There are an estimated 2.5 billion gamblers worldwide, generating
some €140 billion in revenues. Of this, mobile gaming on smartphone
and tablet accounted for 45% of the global gaming market in 2019 – by In the pub 15
far the largest proportion, according to Newzoo7.
Of these, 70% are gambling at home primarily, with 25% at work and At someone 15
23% on the way to and from work, while 15% are in the pub8. else's house
When it comes to gender, more women than ever are playing gambling Somewhere else 2
games, accounting for at least 43% of the market – driven by their
access to mobile and social media and the lifting stigma around 0 10 20 30 40 50 60 70
gambling. The rise of scratch cards, bingo and lotteries has also helped
drive up female gambling use. Source: OpenBet
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Who is playing?
60
50
40
30
20
10
0
All Males Females 16-24 25-34 35-44 45-54 55-64 65+
respondents year olds year olds year olds year olds year olds year olds
Year to Dec 2015 45% 49% 41% 33% 38% 44% 54% 52% 45%
Year to Dec 2016 48% 53% 44% 38% 48% 49% 53% 53% 48%
Year to Dec 2017 45% 48% 41% 35% 48% 43% 48% 50% 45%
Year to Dec 2018 46% 51% 41% 36% 46% 44% 52% 55% 42%
Source: UK Gambling Commission
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How often do you gamble? According to the UK’s Gambling Commission research2, more than
half of gamblers (52%) gamble at least once a week and 18% of all
Year to Dec 2015 respondents have gambled online in the past four weeks.
Year to Dec 2016
35 Year to Dec 2017
Gambling and mobile payments
Year to Dec 2018
Increasingly, Europe’s gamers are looking to play on mobile and, more
30 presciently, pay on mobile.
25 According to PwC’s 2019 consumer behaviour research9, 55% of
online consumers believe that mobile payments make buying less
complicated. As many as 70% of users under the age of 40 say they
20
intend to use mobile payment once it is made available to them, while
47% of these users also say they prefer mobile payments, because they
15
no longer have to check if there is enough cash in the wallet, account or
pocket.
10
It becomes obvious that users online are becoming more educated and
5 aware of different options, ease of use and variety, they want to see
them all. And igaming operators need to be where the punters are and
20%
24%
29%
29%
22%
39%
32%
23%
33%
35%
21%
13%
31%
15%
17%
17%
offering the payment tools that they want to use.
0
2+ days Once Once a Less than
a week a week month, less once a month
than once a week
Source: UK Gambling Commission
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PAYMENT LANDSCAPE
THE PAYMENT LANDSCAPE IN MOBILE GAMBLING
As the gaming industry increasingly becomes digital – along with many Reasons for abandonment during checkout
industries – the shift in how people pay to play has also seen a transition.
Extra costs too
high (shipping, tax, fees) 50%
While cash isn’t going anywhere – it is private, easily authenticated and
readily available out in the ‘real world’ – digital payment tools at the The site wanted me
to create an account 28%
interface of play, be it mobile or online, are growing.
Too long/complicated
checkout process 21%
And what a proliferation of digital payment tools there are! With all
I couldn't see/calculate
digital services, the rule of thumb is that the more ways a user can total order cost up-front 18%
pay, the more likely they are to buy, and this applies as much to mobile Delivery was
18%
gaming as it does anywhere else. The following section outlines the too slow
range billing options available to most digital merchants / vendors / I didn't trust the site with
my credit card information 17%
brands etc.
Website had
errors/crashed 13%
Credit card: the default setting
For most online transactions, be they within gambling or e- and Returns policy
wasn't satisfactory 10%
m-commerce, for many players credit card has been the default option
There weren't enough
to pay to play. However, credit cards have limitations when looking to payment methods 6%
help people play ‘in the moment’. The credit card
was declined 4%
A typical credit card has a unique 16-digit number, a three (or 0 10 20 30 40 50
sometimes six) digit CCV number on the back, a four digit – five if you
count the ‘slash’ – start date and a similar expiry date. Source: Brilliance
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In many payment instances online – so called ‘card not present’ Cart abandoment by device
payments – all these details need to be entered into the payment form 81
on the device to make a payment. This is time consuming and, in the
case of mobile phones [with small keypads], very difficult to do. As a 80
result, while card payments are a simple and secure way to get money
into an online service, they do create significant friction from a user 79
perspective.
78
Percentage Abandonment
As consumers become ever-more fixated on instant gratification from
the things they do on the web, this friction is holding people back from 77
playing, especially on mobile and increasingly on smart TVs, where the
interface for inputting data is certainly not user-friendly. 76
This has to be costing gaming companies money. If we look at the 75
broader ecommerce marketplace as a bell weather of consumer
behaviour, research by Baymard – which averaged out 41 different sets 74
of research into US cart abandonment rates found that on average
69.6% of shopping carts are abandoned at the point of payment10. While 73
most [58.6%] didn’t go through with payment because they were just
browsing, 21% and 17% didn’t pay as the ‘payment process and card 72
details were too complex and they didn’t trust the site with card details
respectively.
Phone Summary Tablet Computer
When it comes to devices, mobiles are where consumers have the most Source: Brilliance
trouble with using credit cards, with research by Brilliance11 showing
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that more than 80% of abandonments happen on mobile devices, in no account. They also avoid having to share card details, or account
small part due to payments being hard to make. numbers with an ewallet and simply require a usernames and
password.
While credit cards have been the bedrock of online payments, in the
gambling sector they are starting to meet with resistance as punters For gambling operators, ewallets also offer much quicker processing
now seek for more convenient ways to pay to play. against slower traditional processes such as bank transfers, cheques
or refunds back to the original payment card.
What other payment options are available?
Payment Apps
Ewallets and Mwallets Closely allied to mwallets, payment apps run natively on a mobile
Wallets allow users to store ways to pay digitally. While ewallets device. It must be pre-loaded with the card details with the phones
and mobile (mwallets) are often lumped together, there is a subtle in-built security then used to initiate and
difference: mwallets typically store payment details/card details authenticate payments. The line between
within a locally accessible app on the mobile device, where ewallets payments apps and mwallets is
tend to be cloud-based and so accessible from a desktop, laptop, evermore blurred, but typically a
70%
mobile browser or an app. mobile wallet can be loaded with
card details or credit and used
Three of the four most widely used mobile wallets are currently directly, while a payment app
device- or operating-system-specific. These include Apple Pay, tends to handle payment
Samsung Pay, and Android Pay. Only PayPal, among the four leading card details with lower
brands, works across all major devices. friction than adding
OF USERS UNDER
in card details on a THE AGE OF 40 SAY
There are many advantages to using ewallets on gaming sites. For payment page each time THEY INTEND TO USE
punters, they provide a protective barrier through which payments a payment needs to be MOBILE PAYMENT
can be made using the player’s preferred debit / credit card or bank made.
ONCE IT IS MADE
AVAILABLE TO THEM
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The advantages of payment apps are the same as with e and Instant Bank Transfers
mwallets, offering quick, easy and frictionless ways to pay within Instant bank transfers are a means of transferring money from
games and websites. one bank account to another electronically. The name ‘instant’ is
something of a misnomer as it can take anything up to five days, but
Money transfers since the introduction of PSD regulations across Europe (not to be
A money transfer is when someone transfers money from their confused with PSD2), banks can offer instant payments between
credit card and pays it into a bank, building society or gambling accounts that should, in theory, see the funds move in no more than
account and forms part of the payments made by the card owner. two hours.
For gambling services, money transfers are a secure way to pay, In gaming, instant bank transfers are used when a player has the
which protects both the player and the operator as the transfer is bank account details of their online account and can transfer money
carried out directly between banks and bank accounts, and so they – or make a payment, in effect – from their
are protected by the banks’ security systems. Banks have some of account to that of the operator. The
the strongest, strictest encryptions in place to ensure that their advantage here, once again, is that
money and that of customers remains where it should. As such, the transaction is very secure and
45%
wire transfers are very heavily encrypted and protected as they easily traced as it runs between
move from one bank account to another. bank accounts.
This also applies to mobile banking, which is encrypted by the same Direct carrier billing (DCB)
protocols, and tends to have a 2 or 3-step verification process This is an increasingly
in place. What some users are not so sure about is the fact they important payment
OF ALL ONLINE
have to share their banking details with the receiver. However, solution for mobile IGAMERS ARE USING
everything resides on a secure web page and data is encrypted by content and services MOBILE, GENERATING
both the casino and the bank, so the chances of a security breech enabling the consumer €50 BILLION IN
are low. to charge the cost
SPENDING
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24.5
BILLION BETS
directly to their mobile phone bill
or take it directly from the pre-paid
Cryptocurrencies
Cryptocurrencies – currencies not backed by a central bank and
HAD BEEN / credit balance they have on their
phone.
operating, to a large extent, outside of the traditional financial
network – are increasingly popular with consumers and players.
PLACED WITH They are less popular with many businesses and organistations as
BITCOINS As previously stated, the advantage they sit somewhere in the middle of ‘convenience and compliance’.
BY 2017 of DCB is that it offers a fast way to pay
with an extremely high level of security. That said, cryptocurrencies such as Bitcoin and Ethereum are
Remember, the money that moves from the becoming a key way for consumers to pay for online and mobile
mobile phone company to the gambling operator is services. In gambling, cryptocurrencies have become popular with
protected by the mobile network operator (MNO). players who place particular importance on anonymity. This has led
many leading casino brands – including NetEnt and Microgaming
For gambling operators, DCB also represents a secure and – to develop games that accept bitcoin along with others that now
guaranteed way to receive money and, whilst it is more costly per exclusively deal with Bitcoin as a means of placing a bet.
transaction [compared with other payment methods], the ease of
use significantly increases sign ups of more new players. Many According to the Bitcoin Strip - a website that tracks online Bitcoin
would therefore argue that a large proportion of the transaction cost casino statistics - more than 24.5 billion bets had been placed [using
should effectively be seen as highly attractive “cost of acquisition” bitcoins] by 201712 – while there is no more recent research, the figure
and therefore be included as a function of marketing. is likely to now be much higher still.
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Penetration of payment methods offered by merchants Localisation of payments
With a plethora of payment options available it’s important to also
understand the international and regional variations in preferred
payment solutions. This will impact where and what services should
be offered and how best to optimise conversion rates at the point of
72.2%
acquisition.
When it comes to online payment methods offered by merchants
across Europe, the landscape is dominated by PayPal, Visa and
American Express 15.2%
Mastercard. However, the types of payments that consumers want to
54%
Sofortuberweisung 4.9% use is harder to assess. Credit or debit cards and PayPal were the top
48.3%
two payment methods accounting for nearly
Bank Transfer 9.9%
three-quarters of ecommerce sales
VISA Electron 6.8%
in Europe in 2018, according to the
Maestro 13%
72%
Europe Online Payment Methods
WebMoney 2.9%
2019 report from Research and
Bitcoin 6.3%
iDeal 8.2%
Dankort 2.9%
Cheque 3.6%
Markets13.
Klarna 3.7%
JCB 3.5%
MasterCard
However, there is a much
more mixed bag in terms OF MERCHANTS IN
PayPal
of how consumers spend EUROPE OFFER PAYPAL,
VISA
than that across different
European countries. In BUT CONSUMERS USE A
the Netherlands, for VARIETY OF METHODS
Source: Data Provider
instance, bank-backed DUE TO SECURITY
FEARS
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iDeal is the favoured way to pay, while the Russian online market is TopTop 3 payment
3 payment methods
options in Europe
offered in percentages
by European merchants (%)
dominated Webmoney, Germany by Sofortuberweisung – or instant
Austria Norway
bank transfer – and Dankort in Denmark.
91 56 53 71 53 46
Belgium Poland
Google Pay, Apple Pay and Samsung Pay are also starting to grow, 72 73 68 60 49 46
especially in Russia, driven by increasing security fears among all online Czech Republic Portugal
consumers about how they pay. 45.2 41 35 78 48 41
Denmark Russia
With the majority of merchants placing PayPal, Visa and Mastercard on 80 71 35 81 72 35
their sites, however, these three payment types are high on the list in Finland Slovakia
every country’s consumer spending charts – but consumers tend to use 64.2 60 40 58 53 51
a mixture of payment tools depending on the site they are using, what France Spain
they are doing online and how much they are spending, says Research 81 57 53 91 54 48
and Markets report. Germany Sweden
95 24 23 89 79 71
Greece Switzerland
Carrier billing is missing from most data sets as many analysts simply
74 69 62 84 61 58
overlook it. However, DCB is increasingly popular in many European
Hungary The Netherlands
countries – and beyond – thanks to the increasingly mobile nature of
59 56 52 80 56 41
consumer behaviour, the need for instant gratification and ease of use.
Ireland The United Kingdom
As we shall see in the next section, DCB is becoming not only a useful 84 55 46 80 55 44
tool for gambling operators – online and on mobile – but a popular Italy Ukraine
payment tool across the continent with a significant number of 94 49 45 74 64 35
consumers.
Source: Data Provider
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DIRECT CARRIER BILLING
WHAT IS DCB AND HOW DOES IT WORK?
Direct carrier billing (DCB), is on an upward trajectory across Europe
as it not only taps into the nascent and growing consumer hunger for
immediate mobile content consumption, but also offers a highly secure
way to pay.
What is DCB?
The industry definition of Direct Carrier Billing (DCB) is
“A remote payment method allowing users to pay for online
and quasi physical goods – such as tickets for travel –
products, support, services and content with their mobile
devices (mobile phones, tablets and Smart TVs)”.
This pure telcommunications payment method lets players /
consumers use a ‘pay by mobile’ option on their phone, handset, or
tablet to directly charge the transaction amount to their monthly bill.
DCB simply requires the consumer to enter their mobile phone number
to make a payment. Contrast this with card-based payments where the
user must share their name, card number, home address etc.
Since there is an inherently shorter checkout flow, merchants using
both payment methods report up to ten-times better conversion rates
with DCB than with credit cards.
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How does it work?
From a consumer point of view DCB is extremely straightforward and can be broken down into this simple flow:
Post-paid contact with a Product order from a 4 Receipt of purchase 5 Invoice
1 mobile network operator 2 service provider 3 Payment
DCB Service Provider €5.99
€5.99 DCB provider
provider PLAY
PLAY
There are five steps to the process, which billing provider to the player’s contracted STEP 4: The mobile phone company (MNO)
would work in a gambling environment: mobile phone company (MNO) - with whom the confirms to the DCB provider that the user has
user has his/her mobile phone number and SIM the funds to pay for the gambling deposit. NB
STEP 1: The user decides to deposit money card registered. This can be a pre-paid or post- with no personal data going to the payment
into a gaming account with an online or mobile paid account, so long as there is enough credit. provider.
gambling operator, to buy a lottery ticket or to
be able to place bets. On the gaming site they STEP 3: The MNO then verifies the user in its STEP 5: The total amount of transactions made
see that one of the payment options of ‘Pay by database and accepts payment. The payment by users of a given mobile network operator
phone’. amount is then added to the monthly mobile within a specified period of time is transferred
phone bill issued by the MNO to their user / by the mobile network operator in question
STEP 2: The user selects ‘Pay by phone; to customer (if they are a contract-based) or to the merchant, in this case the gambling
pay using DCB. The payment order is then deducted from their balance if they are a pay- operator to credit an account, pay for a bed, or
transmitted by the gaming operator’s carrier as-you-go customer. buy a lottery ticket.
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DCB+GAMBLING
DCB AND GAMBLING OPERATORS - A WINNING COMBINATION
If ease of use, ubiquity, one or two-click payments and a growing
money transfers and more – because it does not rely on banking
infrastructure. While the other payment methods are convenient for
point-of-sale purchases, DCB offers the best purchasing experience in
desire amongst European consumers to use it weren’t reason enough online environments.
to look seriously at Direct Carrier Billing (DCB), the following section
outlines several other important reasons why more and more gambling There is no need to sign up to some new service or payment provider
operators are now likely to start putting DCB front and centre of their to make it work, it just works. It also requires two clicks to pay and to
mobile strategies. confirm payment – second only to Amazon’s one-click payment process
in terms of convenience and ease of use. This convenience also makes it
Reach and convenience ideal for ‘on the go’ betting e.g. at sporting events or in a bar watching a
The simple fact that anyone with a mobile phone can use DCB makes this match. This convenience ushers in a whole new way of offering gaming
an attractive proposition for any digital content business. They don’t have services – if you need an instant way to bet,
to have a bank account, they don’t need a credit card, they just need a SIM then DCB is the tool to make that happen.
card and a phone number. It is also not limited to smartphones – even
70%
those with a feature phone from back in the day can still use it to pay – Bringing new players and new
making DCB the only truly mobile payment solution. revenue streams
While DCB is likely to help
However, it is not just limited to phones. While the phone is the make the process of adding
payment interface, carrier billing can also be used to make payments cash to accounts or placing
for content and services on other platforms. For example, a consumer “on the fly” bets, it is OF FIRST TIME USERS
can buy a music streaming subscription on a tablet, computer or smart also likely – through its CONVERT WITH
TV by confirming the payment on their phone. convenience and ease of
use – to encourage more CARRIER BILLING
There is also the convenience of using the mobile to pay. DCB is players to pay and play. COMPARED TO 12%
different from other mobile payment methods – the mobile wallets, WITH CREDIT CARD
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According to conventional wisdom, around half of players that visit played and enjoyed, the probability of migrating them across to a
gaming websites never make a deposit. Many players don’t have wallet or card-based account – has improved dramatically.
credit or debit cards; many others don’t have bank accounts. Many
more, who do, just aren’t keen to share their personal / valuable Adding security and reliability
details on gaming sites. Others still don’t want to go through the One of carrier billing’s biggest advantages over other payment
laborious process of setting up an ewallet or some other third-party types is the high level of security – both on a technical level and
tool. However, the point not to be overlooked is that a significantly in terms of identity protection. Remember, when paying with DCB,
large proportion do want to gamble. DCB offers the chance to no personal data is transmitted during the payment process,
bring these recalcitrant players on board and supporting evidence so there is zero risk of identity theft. The mechanism itself also
clearly backs this up. According to Juniper Research14, DCB scores a requires the user to authorise the transaction on a physical device
conversion rate of 70% for first transactions, compared with credit – thus making “card-not-present” fraud virtually impossible. This
cards at 10 – 12%, with other research reporting conversion rates up increases consumer trust and as a result,
tenfold15. improves the payment conversion
rate whilst protecting the gaming
According to Annual Market Review by Mobile Squared15, more than operator from chargebacks and
15%
1,000,000 users have also used DCB as their preferred payment bad publicity.
method while betting online, reading news online, purchasing
dating services or adult content. Carrier billing solutions [from
reputable service providers]
In addition, DIMOCO has concluded that using carrier billing also come with some of the
can bring a 10-15% increase in revenues to any digital content telecom industry’s most
INCREASES IN
business16. sophisticated transaction REVENUE ESTIMATED
monitoring tools and TO BE BROUGHT IN
Carrier billing also represents an excellent on-boarding tool, offering fraud protection solutions WHEN USING
new players an easy way to try out gaming services. Once they have – “fitted as standard”.
CARRIER BILLING
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The business model for carrier billing can basically trade with anyone who has a mobile phone number
Unlike other mobile payment mechanisms, DCB is essentially a anywhere in the world – which makes DCB the most compelling of
revenue-share-based payment tool, between the gambling operator, payment tools.
payment service providers and mobile network operator – taking an
agreed percentage from each transaction. This commercial model is So, whilst the fees for using it are slightly higher, the increase in
usually agreed on a case-by-case basis but is generally considered transaction volumes will heavily outweigh the perceived costs.
higher [per transaction] than say credit card however, it’s not actually However, as a result, of DCB’s growing popularity, these costs are
as expensive as it might seem. Simply consider the ease-of-use for starting to come down.
consumers coupled with its immense reach and a gambling operator
Digital content annual spend (%) split by billing mechanism 2017-2022
Other Other Other Other Other Other
9.1% 9.6% 10.3% 11.2% 12.3% 13.5%
Direct Direct Direct Direct Direct Direct
Carrier Carrier Carrier Carrier Carrier Carrier
Billing Billing Billing Billing Billing Billing
10.6% 12.9% 15.5% 17.4% 19.2% 20.4%
Credit Card Credit Card Credit Card Credit Card Credit Card Credit Card
80.3% 77.5% 74.2% 71.3% 68.5% 66.1%
2017 2018 2019 2020 2021 2022
Source: Juniper Research
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In fact, it is becoming increasingly popular across Europe for all
ecommerce transactions and a study by Juniper Research17 also found
that DCB scores convert 70% for first transactions, compared with
AT A GLANCE The value of DCB
credit cards struggling at 10 – 12%.
There are a wealth of reason why carrier billing offers huge
advantages to the igaming industry.
As a result of its growing popularity, the costs are also starting to come
down too. ● Instant customer acquisition.
● Improve on-boarding [especially for 1st timers].
● Vastly reduces basket abandonment rates – many potential
players that just don’t want to use a payment card – at least at
the point of initial engagement.
● Anyone with a mobile phone and SIM can pay for services up to
€300 pm.
● It’s quick, typically involving 2 clicks.
● Mobile penetration is approx. 10 x credit card
● It’s easy to implement – by working with a specialist aggregator
[with direct, secure connections into mobile operators].
● Once trust has been established, it is far easier to migrate
users to credit card – developing a significantly bigger and
more profitable customer base.
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PUTTING INTO PRACTICE
PUTTING DCB INTO PRACTICE IN GAMING
So where can direct carrier billing be used most effectively in the igaming industry?
CASE STUDY
The simple answer is everywhere. Lotteries, sports books, casino gaming and even
loot boxes in other games can all benefit from the implementation of DCB.
Pete the Liverpool fan leveraged with DCB
Pete is a huge Liverpool FC fan and holder of a season ticket, with great seats Just in time to see Salah slot it past the keeper.
at the Kop. He is having the time of his life at the stadium and his gut feeling Currently, sportsbook operators invest huge amounts into advertisements,
plus the three beers at the pub on his way to the game tells him that his half-time commercials, branded jerseys and much more, creating excitement
team is definitely going to win today. and sparking interest. However, without carrier billing, it gives no option to
Seeing all the banner ads reminds him of his betting account he created a spectators to make a deposit without pulling out a credit card, entering email
while back. He takes his phone out of his shellsuit pocket; he wants to bet on address and password from the wallet, entering the banking details.
that win. The user’s average attention span on an igaming website is approximately
Having to enter his full name, credit card number, expiry date, authorisation seven seconds. You can heavily influence what happens within these seven
code and more is simply too much and too distracting from the action – he seconds – the user can look for his login details, search for his card in his
nearly missed another Mo Salah goal. So, naturally he leaves the site and wallet, or to press a button and confirm a payment.
forgets all about it. If a player loses interest, he will eventually land in your churn group, leaving
A conversion offering a one-click solution would have saved that bet for the him in the company of others whom you’ve lost to a lacking variety of
betting merchant. payment options. 41% of players consider the ease of deposits to be one of
So rewind and start again. Pete is convinced in his beery haze that the men the most important factors when deciding to try a new betting platform.
in red are going to triumph and Mo Salah is about to score any time now. With a regular acquisition campaign, a single player costing you €100 CPA,
He pops his phone out of his pocket, fires up the betting app advertised all probably an understated figure, it’s ironically a gamble in itself. Giving your
around the stadium, selects his odds and bet, clicks ‘play’ and is asked to pay churn group an opportunity to experience the deposit process differently will
via his phone bill. He clicks ‘OK’, is asked if he’s sure and told how much it will allow you to use the in-house resources and bring long gone players back to
cost and, and he places his bet. the game.
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CASE STUDYBridget wants to play blackjack
Bridget is a busy working mum, but she has always loved a hang or three of gambling account to play with next time.
blackjack and considers herself lucky with the cards. When Bridget decides to cash out, she will need to sign up to the casino with
While waiting in for the kids to come out of school, she takes a look at a credit or debit card if she wants to collect her winnings, but for now she is
some mobile casino sites and finds one that does a great line in interactive happy to carry on playing with what she has won and topping it up with DCB
blackjack, where she can play against players from all over the world. – it is so easy to do.
She looks at how to set up an account to play and starts to enter her name,
address and credit card details, but sitting in the car, tapping on a tiny phone
keyboard she rapidly loses interest: by the time she’s done this – and got her
card out of her purse in the trunk – school will be out and the moment will
have passed.
Instead she Googles ‘Blackjack sites that use pay by phone’ and finds top of
the list an excellent looking site that will give her an entry stake as a new
user.
Looking to spend a bit more, she looks at how to quickly top up and play.
She finds the site’s ‘pay by phone’ option and she clicks it, verifies her ID with
another click and in a second she’s in – her age being verified by the fact that
she has a mobile phone contract.
She selects the €10 stake, which is immediately credited to her account and
she is dealt her hand.
After some tense to-ing fro-ing with the fellow players, the cards are turned
over and she has 21! She wins and her account is credited.
She has won €100, which since it is more than her initial balance she put on
her DCB account she is allowed, by the MNO, to have that credited to her
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CASE STUDY
Making lotteries something millennials will love
It is hard to admit, but today’s lottery business model is largely out of date It’s inherent two-factor authentication makes it incredibly secure, with the
and ignores the way many people live their digital lives. It also overlooks mobile network operator having already having required the customer to
how millennials and first-wave Gen Z-ers – who are coming of age right prove their age to get a contract and having all those details on file.
now – want to be entertained. DCB also enables anyone with a mobile phone to be able to purchase
‘Pick six numbers and wait a week’ is already boring enough to these two a lottery service safely, with the PSD2 regulations that govern DCB,
cohorts, but force them to have to locate and physically walk to a retailer stipulating that the user can only buy digital goods to a limit of €50 per
to play is asking too much. transaction and €300 per month. This is entirely compatible with the
Instead, lottery operators need to be more omni-channel and they need to responsible gaming philosophies of lotteries the world over.
make lotteries more immediate and exciting, while tapping into how young Couple this with the fact that registering new users with DCB is faster
people use their phones. and less onerous than with a credit card or banking details and bringing
Most people, let alone millennials, have a smartphone – and this is the lotteries into the 21st Century and making them more ‘millennial friendly’
platform where they turn for entertainment. Lotteries need to be here if has never been easier.
they are to succeed. In fact, industry metrics state that players are 10-times more likely to
In fact, in its annual report, Ontario Lottery and Gaming Corp (OLG) said purchase following registration with DCB than with a credit card or bank
millennials aren’t buying lottery tickets like their elders: “Even though account. DCB also allows a user to debit anytime from a prepaid card as
about 45% of adult Ontarians play the lottery regularly, only 7% of adults well as directly charge their mobile phone account. Many more people have
under 35 years of age play the lottery at least once a week”. a mobile phone than have a credit card. For all these reasons, DCB suits a
‘one-time’ purchase of lottery tickets via a mobile app.
Why? Millennials have been conditioned to expect instant but high levels
of service. They will not queue up to buy a lottery ticket, nor will they
queue up to validate one to see if it’s a winner. They want to be able to buy
a ticket at the push of a button and be told if they are a winner or not.
Direct Carrier Billing makes it incredibly easy to pay for these sorts of
immediate online purchases and are ideally suited to the needs of lotteries.
In association Webinar Media Partner28 REGULATION REGULATION, COMPLIANCE AND SECURITY The igaming industry in Europe is one of the most regulated in the world – second perhaps to the European financial industry – and payments for gambling services are one of the most stringently regulated facets of the industry within that. Carrier billing is also highly regulated, under both the regulations that surround mobile network operators, as well as under the wealth of financial services regulation, ePayments laws and the European Commission’s flagship payment rules, the Second Payment Services Directive (PSD2). Together, this means that carrier billing offers a highly secure and very well-regulated payment option that will add value to igaming services, making them safer and encouraging responsible play - protecting both the operator and consumer. So what are the regulatory and compliance wins that DCB can bring to igaming? Excellent KYC – upon receiving a local phone contract with a mobile telephone operator (MNO), every subscriber is required to pass a Know Your Customer (KYC) check. This guarantees that all deposits made to a gambling account are not done anonymously – at least not to the MNO. In association Webinar Media Partner
29
In addition, the MNO can also recognise over-18 users, thus providing Hugely reduces fraud – Unless the person attempting fraud actually
another layer of security before processing the payment. has the victim’s device, fraud cannot be committed. Simple. As
long as the consumer’s devices are safe, the risk of fraud occurring
Payment caps – Thanks to PSD2 there is an inherent payment cap of is greatly minimised. For additional security, smart transaction
€50 per transaction, which allows gaming operators to be responsible monitoring systems offered by some DCB service providers can keep all
and create a controlled environment for customers – particularly for transactions under control with default and customisable features like
impulsive play. Additionally – and in accordance with PSD2 – a monthly roaming tracking, location, deposit frequency etc.
limit of €300 is set on transactions thereby guaranteeing that players
cannot over-extend themselves – as operators seek to minimise Taken together, these inherent facets of carrier billing make it an ideal
exposure to “problem accounts”. tool for the highly regulated world of iGaming and mobile gambling.
DCB has seen huge expansion over the last few years and is continuing
Avoiding the SCA bottleneck – Secure customer authentication to grow, with several million punters using it regularly to place bets,
(SCA) is the latest payment industry buzzword and applies to all across Europe and the wider world.
online transactions and the regulation affects the entire payments
industry within the European Economic Area (EEA). It stipulates that In fact, betting is now the third largest category of services by Year-
all customers paying digitally and/or online need to be securely on-Year growth rate of DCB users with 22%, giving way to charities
authenticated. This often puts an extra two steps into the payment (36%) and entertainment (26%). The reason is simple, DCB is not just a
flow – and, as we’ve discussed, asking too many questions or payment method, a DCB vendor’s direct connection to telco providers
requesting too much data at the point of purchase – is a significant allows us to be agile and innovative, starting from big SMS campaigns,
barrier to completing a successful transaction. With DCB however, none up to elaborate targeting, based on that you’ve chosen the right partner.
of the transactions require SCA and removes this friction – and makes it
a truly two-click payment tool.
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GLOSSARY
GLOSSARY
If you are new to carrier billing and world of telecoms, here are some Mobile Network Operator (MNO) A mobile telco that operates its own
helpful definitions of telecoms and billing specific terms telecoms network to which a consumers SIM card and phone number
are attached
Apple Pay Apple’s iOS compatible mobile wallet and payment solution
on iPhones and iPads M-payment / Mobile payment Using a mobile device to make a payment
Android Pay Google’s open sourced mobile wallet solution on Android Payment Services Directive (PSD2) The Revised Payment Services
devices Directive (PSD2, Directive (EU) 2015/2366, which replaced the Payment
Services Directive (PSD), Directive 2007/64/EC) is an EU Directive,
Carrier Billing Short for Direct Carrier Billing (DCB), is an online administered by the European Commission (Directorate General
payment method that lets a phone user to make purchases of digital Internal Market) to regulate payment services and payment service
services by charging it to their mobile phone bill or taking it form providers throughout the European Union (EU) and European Economic
their pre-pay account balance. It is available to all smartphone and Area (EEA). The PSD directive’s purpose was to increase pan-European
feature phone owners, so long as they have a SIM card and a network competition and participation in the payments industry, also from non-
connection. Also known as Operator Billing, Direct Operator Billing, banks, and to provide for a level playing field by harmonising consumer
Direct Mobile Billing protection and the rights and obligations for payment providers and
users. The key objectives of the PSD2 directive are creating a more
Direct Carrier Billing (DCB) see Carrier Billing. Also known as Operator integrated European payments market, making payments safer and
Billing, Direct Operator Billing, Direct Mobile Billing more secure and protecting consumers
Mobile Gambling The playing of any gambling game on a mobile device, Pre-paid mobile A contractless mobile phone service where the user
such as a feature phone, smartphone, tablet or watch pays money in advance as ‘credit’ that they then run down as they use
the phone for calls, texts, data and services
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Post-paid mobile A standard contracted mobile phone service, where
the user is credit checked by the service operator and is given a phone
to use. They then pay for their calls, data and services monthly when
REFERENCES
REFERENCES
1. https://www.statista.com/statistics/270728/market-volume-of-online-gaming-
worldwide/
they get a bill 2. https://www.gamblingcommission.gov.uk/PDF/survey-data/Gambling-
participation-in-2018-behaviour-awareness-and-attitudes.pdf
3. https://www.marketresearchfuture.com/reports/mobile-gambling-market-5142
Samsung Pay Handset maker Samsung’s mobile wallet solution, based
4. https://www.gamblingnews.com/news/nevada-regulator-approves-placing-
on Android Pay, that works in Samsung devices bets-on-enascar-races/
5. https://newzoo.com/insights/trend-reports/newzoo-global-esports-market-
SIM card The Subscriber Identity Module (SIM) is the small chip on a report-2020-light-version/
plastic card used in smartphones globally and which stores data on the 6. https://www.gamblingnews.com/news/deep-dive-into-everymatrix-the-state-
subscriber and the phone, the contract they have and more so that they of-esports-betting-2020/
can connect to and be billed for using GSM cellular networks 7. https://newzoo.com/insights/articles/the-global-games-market-will-generate-
152-1-billion-in-2019-as-the-u-s-overtakes-china-as-the-biggest-market/
8. https://www.openbet.com/files/file/view/name/Player%20Research%20
Study%20-%20key%20findings.pdf
9. https://www.pwc.com
10. https://baymard.com/lists/cart-abandonment-rate
11. https://www.barilliance.com/cart-abandonment-rate-statistics/
12. https://news.bitcoin.com/bitcoin-gamblers-wagered-4-5-billion-btc-2014/
13. https://www.researchandmarkets.com/reports/5005516/europe-online-
payment-methods-2020?w=4
14. https://www.juniperresearch.com/researchstore/content-digital-media/digital-
content-business-models
15. https://mobilesquared.co.uk/vas-2018-2023/
16. https://dimoco.eu/carrierbilling/betting/
17. https://www.juniperresearch.com/researchstore/content-commerce/digital-
content-business-models
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SPONSOR
DIMOCO: Your payment partner for DCB in iGaming
Direct Carrier Billing is relatively new to the betting industry, but it Furthermore, DCB is not just a payment method, a DCB vendor’s direct
comes with such a great array of possibilities that it is starting to connection to telco providers allows us to be agile and innovative,
garner more interest from the iGaming sector. starting from big SMS campaigns, up to elaborate targeting.
It is important to stress right away that carrier billing is not suggested With a growing iGaming customer base DIMOCO plans to expand
to replace all existing a gambling operator’s other payment options. its services into several new countries, in addition to working on the
Rather, it is more of ‘a perfect complement’ to the existing payment development of direct bet purchase without an account top-up. Overall,
tools that allows all operators to increase and maximise their active the technology behind Carrier Billing will be greatly enhanced with a
players and offer a payment option that everybody already holds in potential to expand into other components of online gambling, not only
hand. the payments side.
By adopting carrier billing gaming operators can cater to all potential
players without forcing them to provide any personal details, such as
credit card or bank information, as well as offering a payment options
to players that may not have cards or other ways to pay.
Besides being convenient, seamless and instant, there are two other
factors that turn this mobile payment solution from being a ‘nice to
have’ option into a merchant’s strongest tool in conversion strategy and
churn: it is a powerful tool for instant gratification and it is compliant
with all payment regulations across Europe and beyond.
At DIMOCO we are very agile when it comes to our technology and can
easily adapt the DCB solution depending on the country, your player
registration process or other demand.
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