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The Green SheetGreen Sheet

The Green Sheet Online Edition

December 26, 2007 • Issue 07:12:02

New Products

Dialing for digital content

Product: Bill2Phone
Company: BSG Clearing Solutions

BSG Clearing Solutions' Bill2Phone is simple and straightforward: In purchasing online digital content, why not charge it to the consumer's local phone bill?

BSG worked for two years with the major wireline carriers to develop a way for consumers to purchase digital content online and bill it to their home telephone bill. The company also recently launched a mobile payment solution that allows subscribers to add mobile content purchases to their wireless phone bill.

The end result is Bill2Phone, a way for merchants to expand consumer reach to include vast segments of society that do not have access to traditional electronic payment methods like credit and debit cards - namely teens and the unbanked.

According to statistics cited by BSG, 60 million to 80 million U.S. consumers are unbanked, and 15% of the total U.S. population are teenagers. Approximately 50% of shoppers abandon online shopping carts when credit cards are the only payment option.

Furthermore, a study by Brulant Inc., an e-commerce consultancy, found a 267% increase in the use of nontraditional payment methods from the largest e-commerce online stores.

Therefore, the potential customer base for Bill2Phone's technology is huge. According to BSG, its technology can reach 150 million wireline households in the United States (which is 90% of the country), making the combined wireless and wireline reach to be around 390 million.

Bill2Phone runs on BSG's Advanced Payment Gateway, a Payment Card Industry Data Security Standard compliant payment processing platform that connects e-commerce merchants to 1,400 LECs nationwide and all major wireless carriers.

It can be used to shop online for "mobile consumables" - tools and features associated with wireless phones, such as games, videos, news, horoscopes, sports highlights and stock market updates.

Users initiate transactions from their phones or through merchant Web sites by simply inputing their local phone numbers.

Then BSG's automated system takes over, authorizing and authenticating user IDs, followed by standard bankcard transaction processing steps, ending in settlement with merchants. When a customer's phone bill arrives, charges for online purchases appear on it.

According to BSG, Bill2Phone reduces online cart abandonment by offering consumers an easy way to pay for online purchases without credit cards. And it increases online sale conversion because Bill2Phone's fraud prevention technology screens out nonpaying or nonbillable individuals.

Abie Reifer, Chief Technology Officer at BSG, said there are an estimated 240 million mobile devices in use today. Calling this "a big number," Reifer said, "[Bill2Phone] opens up to our merchants new avenues [of potential revenue]." And it gives those merchants "tools to offer and expand their operations."

ISOs in on the action

Tim Riley, GM of BSG's Payment Services, said, "By tapping many unserved customers, Bill2Phone can drastically open up new revenue opportunities for merchants. This solution gives ISOs and merchant level salespeople an opportunity to offer a product that greatly expands a merchant's purchasing demographic and differentiate themselves from other competitors."

In its relationship with an ISO, Riley said, "BSG [would] be responsible for providing the Bill2Phone brand, underwriting, various approvals and actual merchant boarding.

"Some services, like settlements and risk management can be shared between BSG and the ISO, depending on arrangements.

"BSG also provides many value-added services, such as merchant care, customer billing support and advanced reporting capabilities. ... ISOs and agents can receive a wholesale rate and participate in revenues for any merchant accounts that are sold above the contracted wholesale rate."

ISOs interested in offering the Bill2Phone service as a value-added product are encouraged to contact Greg Carter, President of BSG Clearing Solutions, North America, at the phone number following this story.

BSG Clearing Solutions

The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.

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