For those interested, I recommend taking the time to listen to Karen's interview of Jim. The essential message of this story is that as Jim said, Carriers are not 'inserted' into the flow, Carriers are 'leveraged'. What does that mean? Of course Carriers are fundamentally viewed as providers of wireless connectivity that enables wireless communicating. This is traditional legacy thinking in the telecom industry that predates wireless, going back to the wireline world. With the advent of the digital economy, companies like Danal BillToMobile and others had the vision and wisdom to recognize that Carriers had another set of assets - besides their networks - that could be 'leveraged' to become incremental revenue generators. What are those other assets? Direct, known and trusted billing relationships with consumers. Frankly, web merchants and the likes of Danal have been ahead of many in Carrier leadership in recognizing this asset's potential. Rather quietly, and as Karen said - outside the U.S. more than inside the U.S. - Carrier billing of Commerce (often referred to as Direct Carrier Billing [DCB]) has become a $12B+ industry, projected to almost double in the coming years.

Back in the late 1990s AOL quietly pioneered DCB with AT&T via a 3rd party (that predates Danal). AOL wanted to test to determine if a 5% lift in customer acquisition could be realized with this alternative billing option (recognizing that sizable percentages of consumers were either without credit cards and/or fearful of transacting online with their credit, debit or checking accounts). In spite of extensive workarounds that were inconveniences to consumers (necessary to meet stringent FTC and FCC standards before $MM upgrades could be made to Carrier legacy billing infrastructure), AOL realized a lift of over 12%. In the ensuing years, once investments were made in Carrier billing infrastructure, web merchants were often reaching larger addressable markets in the magnitude of 15-30%+. Unfortunately slamming and cramming abuses of core LD services in the U.S. stigmatized Carrier billing, causing many in U.S. Carrier leadership to back down from pushing the boundaries of DCB, however, in international markets DCB has become a vital component in the suite of payment options web merchants offer their customers.

Interesting that Jim said he knows of only one other company that authenticates with Carriers like Danal does. Why? There are well over a dozen companies globally that do what Danal does in terms of working with Carriers to allow the Carrier's users to bill mobile commerce transactions with 3rd party web merchants to their mobile phone bill (premium digital services and in some cases now physical products). These DCB supplier-partners to Carriers include Bango, Boku, Dimoco, Fortumo, ArpuPlus, Neomobile, SLA Mobile, Net-M DoCoMo, and others.

As Jim said, in spite all the hacking and security breaches going on since the dawn of the digital economy, Carriers/MNOs and their SIM cards have not be breached. While I hear the concept of better authentication in this Danal-Orange story, it is still not clear to me from the interview what the incremental improvement in authentication is for Carriers involved in DCB (vs. for instance financial institutions that understandably could realize security improvements by adding this authentication capability into their ecosystems).

On the topic of conversion there is a distinction to make in defense of DCB. Jim mentioned that conversion is lower than the industry would like to see. True, but note that per a DCB infographic by Amdocs & Mobile Payments Today, DCB conversion rates are 5 times higher than credit cards. Certainly higher DCB conversion rates are desired, but that brief discussion on conversion rates may have given a wrong perception of DCB as DCB's conversion rate is impressive compared to credit card.

Good to see Danal's vision in 'leveraging' the billing assets of Carriers beyond even commerce. Slowly but surely, Carriers are increasingly realizing that the billing portion of their business is not a cost center but part of their crown jewels - invaluable in our increasingly ubiquitous digital world.