A first introduction for startup to integrate with telco payment method.

1. Payment with Telco
Alternative payment method that can boost
your apps purchase in emerging markets
Anton Rifco
anton.rifco@gmail.com
Saturday, 4 May, 13

2. Why Telco Payment?
Your potential customers in emerging
markets most likely doesn’t have CC
There’s “only” 7.8 mio CC holders in Indonesia*. The
population there is 240 mio (3000% of its CC holders).
While the forecasted mobile penetration will be 173.5%
by 2017**
Too many CC Fraud cases in Emerging
market, which makes VISA & MasterCard
reject transaction originated from there
* )http://www.thejakartapost.com/news/2013/01/14/tougher-business-credit-card-issuers-2013.html
**)http://www.marketresearch.com/Business-Monitor-International-v304/Indonesia-Telecommunications-Q1-7259408/
Saturday, 4 May, 13

3. Why Telco Payment?
Because it’s convenient for users
Saturday, 4 May, 13

4. Type of Transactions
SMS purchase
Users send SMS with “keyword” to specific short-code (4545)
USSD purchase
• Users press USSD short code *123*1*2# then press call. Or...
• Users enters tree based USSD (UMB) on short code *123#
WAP (browser-based) purchase
Users click purchase button in a specific website
Saturday, 4 May, 13

5. How to ?
Different telco has different
implementation for the integration.
But.. these are the common generic flows:
• Incoming MO (Message Originating) with trxid
• Charging Request in MT (Message Terminating)
• Charging Response (DN) arrives within few seconds
Saturday, 4 May, 13

6. How to ?
Some other Telcos implements:
• MSISDN* detection in HTTP header
HTTP_X_UP_CALLING_LINE_ID
• One-time-password method (sms) per each
transaction
• HTTP redirection to Telco’s WAP gateway to detect
Msisdn / perform the charging
*) MSISDN, Mobile Station International Subscriber Directory Number. Or, known as phone number in international format,
+62812222
Saturday, 4 May, 13

7. Problems
Due to the inexistence of standard
across Telcos, it’s very hard for
Content Providers (CP) to do
integration
Normally Telco wants bigger portion
(>50%) of the revenue share,
especially with new players (CP)
*) Content Providers (CP) is the company to provide the value added service to end users (e.g. game, ring back tone,
etc.)
Saturday, 4 May, 13

8. Alternative for CP
Due to the problems mentioned
earlier, Normally smaller CP* goes to
bigger CP for the payment integration
This way, those smaller CP only got
very small portion of the revenue
*) Content Providers (CP) is the company to provide the value added service to end users (e.g. game, ring back tone,
etc.)
Saturday, 4 May, 13

9. Situation in the
Telco
In the era of communication, services
are provided by websites and apps
Those services override most Telco
services, such as callings,
messaging, and even value added
services
Telco seems to have sad future,
becoming dumb pipes :(
Saturday, 4 May, 13

10. The Telco Ways
Telcos are struggling to find ways to
become smarter pipes :)
To act smarter, they need to take
smarter strategies
Especially, for the messaging
channel, instead of giving away free
sms promotions, they can alter the
SMSC* resources to Content App
*) SMSC, Short Message Services Center, centralized machine to manage the text communication b/w subscribers, or
subscribers to applications
Saturday, 4 May, 13

11. Telcos for Startup
Today is the era of start-ups*
More startup, result in more services
Startups need alternative of payment
system that can reach every people
(remember, most people own phone)
*) startups or Startup Companies, is a company, a partnership or temporary organization designed to search for a
repeatable and scalable business model.
Saturday, 4 May, 13

12. Telcos for Startup
If only Telcos can reduce
bureaucratic process in their Payment
System integration, they can have
more partners
More partners result in well-occupied
resources
Then, they can reduce their revenue
share to <20%. pleaseee... :)
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13. Resurrection of
Telco
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14. Thank you
The writer is a telco and startup enthusiast and practitioner.
He worked in the biggest Telco company in Indonesia, one of the biggest
Telco vendor in world, and in a Singapore-based Content Provider. Currently
he’s starting his own venture in digital tourism industry
Saturday, 4 May, 13