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Google Play users on Vodafone, Airtel and Idea can soon purchase apps, and other services by directly paying from their phone balance. This is made possible through a carrier billing partnership between Google India and telecom operators including Airtel, Vodafone, and Idea, according to a BGR report. MediaNama has written to Google India for a confirmation.

Prepaid users constitute for over 95% of users in India, out of the billion existing connections; they will pay directly from prepaid balance. For postpaid users, the amount will be added to their bill at the end of the month or bill cycle. Idea Cellular was the first to strike the deal with Google in May; while note that the service is yet to be rolled out.

The partnership was also announced during a GooglePlayTime event in India; users have tweeted about this:

Why this is a big deal

Firstly:

Earlier, Idea had enabled carrier billing on Windows Store in India in December 2014, but the deal is probably of little use as the majority of the Indian market is Android based. Currently the top three vendors in India including Samsung, Micromax, and Lenovo jointly holds 45% of the market. Back in 2012, Google had tried to do a similar deal with Airtel for the Play Store, but the deal never went live. Reports emerged that the deal almost closed in 2014 , but it isn’t clear why the deal broke. Interestingly, Airtel’s Wynk app/service once had carrier billing integrated for in-app purchases, even though Play store guidelines prohibit third party billing.

Also Read: On making Carrier Billing independent of Carriers in India

Secondly:

Google users in India can pay only through Credit Cards, and through Google gift cards  for purchasing apps and digital content from Google Play. And this can affect how Indian users transact on Google Play, especially at a time when the company has launched its flagship streaming service like Google Play Music in India.

-Most paid content consumption happens via mobile devices: A report by global payments operator Fortumo points that over 80% of payments for digital content in India are from mobile devices. The report added that a majority of content consumption in India still happens over feature phones, even though smartphone penetration in the country is rapidly growing.

 -Two factor authentication for card-not-present transactions still is cumbersome, as payment has to go through multiple hops (about four in may cases) to complete a transaction. Sunil Kulkarni, managing director of Oxigen Services, says that a break in the payment chain will lead to a 25% failure of transactions.

-Very few people use credit cards to transact online: Indian’s prefer to transact using Debit cards over credit cards, and data shows that as of July 2016, the country had 697.22 million debit cards, compared to just 25.94 million credit cards, according to the Reserve Bank of India.

-RBI’s mandatory two factor authentication for card-not-present transactions still is cumbersome, as payment has to go through multiple hops to complete a transaction.

Mobile wallet payments are still now allowed as a payment option on any of the major app marketplaces.