The death of the ATM has been widely predicted over the last few years as consumers grow increasingly accustomed to paying for products and services online, through apps, and paywave technology. Another payment system growing in popularity slowly but steadily is direct carrier billing (DCB).
Perhaps one of the first introductions to the concept for many of us would have been buying new ringtones via SMS in the good old days of, say, 2004, where charges were accrued onto a user’s mobile phone plan. Over the years, the concept has evolved to where companies can now provide users access to buy all manners of things through their phone, including bus or sporting tickets, and a Spotify or Netflix subscription.
With those more interesting use cases for the most part happening overseas, Australian startup AdsMetric is looking to educate, develop, and grow the market locally – with carriers such as Vodafone not currently enabling DCB, there is significant room for growth.
Chris Laurent, who cofounded the startup along with Lesley Villaverde and Rob Salha, explained, “What makes DCB really unique is that it’s a one tap process, removing all the friction in the payment funnel. Instead of having to enter credit card details and putting your name in, the system pulls information from your carrier, with your mobile number as an identifier, and then matches that securely off the back end and bills you instantly on your mobile phone bill.”
There are two sides of the market: aggregators and content providers. Content providers, such as Netflix or app developers, will go to aggregators, essentially network builders, who have the connection to the mobile payment gateway owned by the telco, in order to facilitate DCB. UK aggregator Boku, for example, recently partnered with a number of telcos across Europe to enable DCB from the Google Play store for 75 million subscribers.
AdsMetric’s core product is Sumo Carrier, a billing and analytics platform managing compliance and refund issues on behalf of carriers, and detailed statistics for businesses using DCB. Its API allows aggregators and content providers to tap into hundreds of metrics, including customer lifetime value, average return per user, and monthly recurring revenue.
Founded in 2012, AdsMetric originally began as a mobile marketing company, then shifted into building its own direct carrier billing-enabled mobile products as the mobile landscape kept evolving. However, Laurent said, there was no off-the-shelf analytics platform available to measure or track performance, and it was at that point that the idea for another shift came.
“We had to crunch numbers in an Excel spreadsheet and estimate when we were going to break even. As a startup that’s crazy thinking, estimating breaking even, if at all, with a live product. As soon as we finished building the first version, we quickly realised what we had and made the pivot towards building the next generation of DCB solutions,” he said.
At this time, aggregators working in the space would access the payment gateway from the carrier and grant event permissions the content provider, with the aggregator connecting the content provider through an API, letting them build their own products. As such, Laurent said that as AdsMetric began building solutions for publicly listed mobile companies in Australia and New Zealand, the team realised that there was a need for a comprehensive dashboard providing analytics rather than running directly to a blind API with no visibility on performance insights.
While a number of consumers still have reservations about in-app payments and features like Apple Pay, Laurent said expectations are that DCB will become the next payment system to be widely accepted; however, at the moment he said it still “feels like it’s very underground.”
We’re trying to bring DCB into consumer acceptance by fostering the growth of great product offerings and this dashboard will help aggregators and content providers do this by allowing them to visualise and predict performance metrics in real-time,” he said.
“In the past, it used to be things like silly ringtones people downloaded, and I think that kind of product left a bad mark on the industry. Now you see companies like Spotify and Netflix coming into the industry with more legitimate offerings, and at the same time you’ve got other smaller companies that want to implement this type of payment method but know nothing about carrier billing nor have the infrastructure to deal with it, and that’s where we step in.”
With the core of an aggregator’s business being to bring on new clients and convert them into content providers, Laurent said AdsMetric is focused on attracting aggregators to its platform, positioning Sumo Carrier as the dashboard that will help its content providers grow. The pricing of the Sumo Carrier product is based on licensing, with clients charged a flat fee depending on the type and number of tools or metrics they want access to.
Given the rapid advancements in the mobile payments space and the ever-changing regulations looking to keep up, Laurent said it hasn’t always been easy to explain DCB and the work of AdsMetric to investors. Despite this, the startup closed a seed funding round last Christmas Eve from Domenic Carosa of Dominet Digital Investments. Having founded companies including Crowd Mobile, Cardosa has significant experience in the space.
As it looks to build relationships with Optus and Telstra, Laurent said the investment will help AdsMetric expand overseas, with the startup looking to establish relationships with telcos based in Brazil, Europe, the Philippines, and Hong Kong over the next 12 months.
Laurent also hopes Sumo Carrier will help the local market mature and open it up to the purchasing of physical goods.
Image: Chris Laurent. Source: Supplied.