In a move to monetize its mobile usage, Facebook appears to have launched telecom operator billing in India, in partnership with Airtel, Loop and Uninor. The social networking giant today announced a simplified two step carrier billing process with a majority of the carriers in the US and the UK, saying that it will roll out this process to other telcos globally.
While we’re not sure if this tie-up with Airtel, Loop and Uninor is new, we haven’t noticed it before. We tried buying facebook credits via Airtel, and here’s how it went:
Buying Facebook Credits On Airtel
- We tried buying Farmville Cash and noticed a ‘Buy with Mobile’ option
- We selected a package
- Got a confirmation prompt with my default phone number selected as a payment option.
- Another prompt to verify or re-enter the mobile number.
- We were asked to send an SMS to Zong’s code
- We received the confirmatory message on our phone after sending the SMS.
Facebook says that it has simplified the process now: down to two from what used to be seven steps, including SMS verification, which we’ve illustrated above.
Telco Billing: Opportunities & Challenges
Note that in India, credit and debit card payments require a second factor of authentication, which is the 3D secure method online, and the incredibly unreliable and painful OTP (One Time Password) method on mobile. This barrier to buying can be overcome with telecom operator billing, but it usually comes with its own issues – most telcos prefer to take a really high transaction charge for payments through their gateways. We wonder what kind of a deal Facebook has managed, and also how soon it gets paid when a customer buys. Most of India’s mobile customers are prepaid, so there is money that is already in their wallets (i.e. prepaid accounts).
Also interesting to note that Vodafone isn’t in this list yet. We’ve heard from many many people in VAS that Vodafone is now offering a 70:30 revenue share. Among the three telcos that Facebook has on board, Airtel is the key one: it is the largest telecom operator is the country, leading with both the most number of connections, and the number of active connections. Uninor and Loop are much much smaller, and Facebook should look to tie up with Vodafone, Idea Cellular and Reliance Communications in particular.
If you ask us, we would prefer that Facebook continue with the process of asking customers to verify their transaction via SMS. It might be more cumbersome and lead to some transactions not being completed, but that is better than a situation where telecom operators defraud customers by debiting their balance without their consent. This kind of a scam has been going on for a while in VAS, especially with subscription services and in case of purchases of games and wallpapers.
What Happens To MOL?
Last year, Facebook had tied up with MOL for the purchase of Facebook Credits, through scratch cards. Undoubtedly, telecom operator billing is easier and more impulse driven, and we wonder what will happen to MOL now.
(with inputs from Anupam Saxena)