# The Future of Direct Carrier Billing in 2018
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2018-02-02
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: PSD2 Impact on Direct Carrier Billing Services
Meta Description: Discover how the new Payment Services Directive is revolutionising the payment industry and paving the way for innovative DCB services with improved customer
Tags: featured
Tag URLs: featured (https://financedigest.com/tag/featured)
URL: https://financedigest.com/the-future-of-direct-carrier-billing-in-2018html

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/fd020218-1-1-1736843015622-compressed.jpg)

By **Hiroyuki Sato**, Founder & CEO of DOCOMO Digital

On the 13th January 2018, the new Payment Services Directive (PSD2) came into effect, revolutionising the entire payments industry and affecting everything from the way consumers pay for goods and services, to the safety and security of their data online. The directive has already begun  paving the way for new generations of payment providers and Direct Carrier Billing (DCB) services which are offering a more compelling customer focused strategy, compared to the existing legacy providers.

The new regulation update is standardising and improving payment efficiency across the EU fintech industry, all whilst promoting [innovation and competition between banks and new payment service](https://www.financedigest.com/accelerating-financial-services-innovation-with-the-promise-of-data-mesh.html "Accelerating financial services innovation with the promise of data mesh ") providers (PSPs). These new services will look to challenge [existing companies](https://www.financedigest.com/diabetic-nephropathy-market-to-generate-profitable-avenues-for-existing-companies-as-well-as-new-players.html "Diabetic Nephropathy Market to Generate Profitable Avenues for Existing Companies as Well as New Players") such as MasterCard and Visa by offering a range of services that make banking hassle-free and are shaped to improve the customer experience.

Whilst PSD2 will encourage a new wave of [innovative and integrated](https://www.financedigest.com/the-white-chocolate-market-to-integrate-inquisition-with-innovation.html "The White Chocolate Market To Integrate Inquisition With Innovation") payment methods, it is important to note that Direct Carrier Billing (DCB) services are facing some of the strictest requirements from the new directive.

**The Future for DCB [Services Post](https://www.financedigest.com/financial-services-industry-blazes-the-trail-for-cloud-migration-post-pandemic.html "Financial services industry blazes the trail for cloud migration post-pandemic") PDS2**

A recent report from Ovum [forecasts](https://igniteoutsourcing.com/publications/direct-carrier-billing/) that total DCB revenues will increase to $24.7bn in 2019 from $14.5bn in 2014, and since it’s inclusion on Google Play, DCB sales have grown by 300%.

DCB services offers consumers, merchants and [Mobile Network Operators](https://www.financedigest.com/augmented-reality-ar-virtual-reality-vr-to-dictate-the-growth-of-mobile-operating-tables-market.html "Augmented Reality (AR)/Virtual Reality (VR) to dictate the growth of Mobile Operating Tables Market") (MNOs) a whole host of opportunities within the payment industry. The service has become increasingly popular amongst [consumers completing transactions globally](https://www.financedigest.com/top-5-players-to-account-for-45-of-global-consumer-appliance-coatings-market-share-through-2031.html "Top 5 Players to Account for 45% of Global Consumer Appliance Coatings Market Share Through 2031") because of its simplicity, security and accessibility.

However, PSD2 has constricted the rules on DCB for consumers who have become accustomed to buying [digital goods and services via their mobile phone](https://www.financedigest.com/snap-happy-79-of-brits-ditch-digital-cameras-in-favour-of-phone-photos.html "Snap Happy: 79% of Brits ditch digital cameras in favour of phone photos"). The new directive is [seeing single DCB transactions being capped](https://www.financedigest.com/eu-sees-more-work-ahead-to-implement-russian-oil-price-cap.html "EU sees more work ahead to implement Russian oil price cap") to a maximum of €50 per transaction, with a maximum monthly limit of €300.

PSD2 will continue to allow Electronic Money Institutions (EMIs) to extend the scope of DCB from digital content to the purchase of physical goods. Until now, the original directive restricted what goods, such as wallpaper, music and ringtones, could be billed to a mobile phone user’s bill after purchase. This [regulation was significantly holding back the market](https://www.financedigest.com/u-s-markets-regulator-takes-aim-at-coinbase-lending-product.html "U.S. markets regulator takes aim at Coinbase lending product") for carriers and merchants, so there is plenty of reason for optimism in the DCB market, despite more strict regulations.

Payment providers across Europe are starting to adopt the new legislations that will not only standardise and improve payment efficiency across the European Union, but also provide fresh [opportunities for growth](https://www.financedigest.com/infant-positioning-aids-market-application-trends-growth-opportunities-and-worldwide-forecast-to-2027.html "Infant Positioning Aids Market Application, Trends, Growth, Opportunities and Worldwide Forecast to 2027") to DCB services. If DCB services are to be successful under PSD2, operators and regulators will be starting to [consider the full](https://www.financedigest.com/frances-schneider-considers-full-buyout-of-aveva.html "France’s Schneider considers full buyout of AVEVA") user experience and make sure to clearly outline the changes for their consumers, including the new price limits.

According to Juniper Research, the potential value of digital content in Europe via carrier billing is [predicted](https://www.juniperresearch.com/press/press-releases/operators-eye-content-revenues-as-billing) to rise from just over 2.6bn euros in 2015 to nearly 14bn euro in 2020. This gives merchants a whole host of [opportunities to generate more added value in digital](https://www.financedigest.com/an-analysis-of-vc-investment-in-the-defence-sector-and-the-mods-readiness-to-exploit-digital-opportunities.html "An analysis of VC investment in the Defence sector and the MOD’s readiness to exploit digital opportunities") content areas such as ticketing, gaming and gambling. Merchants who offer DCB services will be able to sell more and convert more potential customers, and push DCB as a more popular method of payment due to lower processing fees. However, the new PSD2 law will be [creating considerable on-boarding friction when having to adjust their internal infrastructure to allow for a new set of processes](https://www.financedigest.com/growth-of-mineral-processing-and-mining-industrie-is-creating-demand-for-rotary-trommel-market.html "Growth Of Mineral Processing And Mining Industrie Is Creating Demand For Rotary Trommel Market"). This will significantly delay implementation and may prevent the [launch entirely for merchants and DCB services](https://www.financedigest.com/visa-launches-crypto-advisory-service-for-financial-institutions-merchants.html "Visa launches crypto advisory service for financial institutions, merchants").

Merchants are able to offer their own payment [services and retrieve customer data](https://www.financedigest.com/financial-services-and-data-how-do-we-meet-the-challenge.html "Financial services and data – how do we meet the challenge?") from their banks, allowing for a faster and more seamless transaction online with increased security. This will be eliminating the need for customers to be redirected to another service or platform to process [payment and giving merchants the change to offer a full turnkey customer experience](https://www.financedigest.com/how-netflix-justeat-and-uber-raised-the-bar-for-the-payments-experience.html "How Netflix, JustEat and Uber raised the bar for the payments experience").

**A safer process for consumers**

As a method of payment, DCB offers compelling benefits for consumers, with it being one of the most accessible methods of payments whilst being safe and easy to use.

PSD2 will not only be encouraging the [emergence of new payment methods in the market](https://www.financedigest.com/allergy-immunotherapy-market-emerging-players-may-yields-new-opportunities-2017-2025.html "Allergy Immunotherapy Market: Emerging Players May Yields New Opportunities 2017-2025"), it will also create a level playing field for new and existing service providers to innovate, create and ultimately give customers increased choice and availability. It is putting the consumer [back in charge and offering a more secure](https://www.financedigest.com/security-backed-mortgages-essential-tips-and-guidance.html "Security-Backed Mortgages – Essential Tips and Guidance") protection of data that merchants will have to abide by.

Since the customer has an already established relationship with their carrier provider, most are very comfortable [paying for goods and services through their phone bill](https://www.financedigest.com/bny-mellons-new-solution-leads-the-digital-bill-pay-revolution.html "BNY Mellon’s New Solution Leads the Digital Bill-Pay Revolution"). The new two-factor authentication and [risk management](https://www.financedigest.com/audit-finds-holes-in-ecbs-management-of-bank-credit-risk.html "Audit finds holes in ECB’s management of bank credit risk") processes offer excellent fraud protection without adversely affecting the purchase experience. Merchants won’t have access to the [consumer’s personal information that DCB services will manage and keep](https://www.financedigest.com/keeping-up-with-heightened-consumer-expectations-in-financial-services.html "Keeping up with heightened consumer expectations in financial services") secure.

With the consumer being at the heart of the PSD2 update, it’s vital that DCB services, merchants and MNO’s change their offerings to suit the [needs of existing and new consumers](https://www.financedigest.com/money-orders-vs-checks-what-you-need-to-know-as-a-consumer.html "Money Orders vs Checks: What You Need to Know as a Consumer"). It’s an uncertain future for direct carrier billing now PSD2 has been live since  January, but with EMI’s allowing DCB services and merchants the continued choice to offer a more compelling purchase landscape and new opportunities arising for a [subscription based model](https://www.financedigest.com/the-rise-of-the-subscription-model.html "The rise of the subscription model"), it looks to be a bright future still.


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---