Mobile payments provider Boku has now completed a deal with Sprint, making it the final major US carrier to enable carrier billing through Boku. The startup operates in more than 60 countries and claims to process "hundreds of millions" in payments accordingly. It has relationships with more than two hundred mobile carriers around the world.
Companies like Zong (now part of PayPal) and Boku got started to enable online users (mostly younger people) to purchase virtual goods in a simple and secure way. They evolved to enable purchase of physical goods offline. While Zong was acquired Boku and smaller payments companies like it risk being marginalized in North America and Europe by banks, credit card issuers and others (e.g., Google, PayPal, Square), which are reaching out to a broader population of users that already have credit cards.
In developing countries carrier billing may be an effective approach for users and merchants in the absence of a more conventional credit card infrastructure. However in developed countries -- with carrier bills already very high -- few individuals (except those without traditional platic cards) will want to load up their carrier statements with additional costs. You may dispute me on this but I firmly believe that in the US, for most adults with existing credit, carrier billing is going to be a non-starter.
Boku cites a Strategy Analytics survey that argues, "consumers are twice as interested in operator billing as using traditional credit/debit cards." I simply don't accept these findings as valid. Another survey (US only) by electronics site Retrevo found the opposite in June of last year:
Companies such as Boku need to branch out into physical goods and move outside of carrier billing to withstand the onslaught from other players with greater brand recognition and momentum. Indeed, earlier this year Boku did an NFC payments deal with Mastercard in the UK as part of an effort to do so.