SPOTLIGHT | In this edition of the About-Payments Spotlight we give the stage to carrier billing company Fortumo. Fortumo was born out of a simple question: if mobile phones can be used for all kinds of things besides talking and texting, why are they not used for payments?
At least three times more people have mobile phones than credit cards. The more emerging the market is, the bigger the difference in favor of mobile phones over credit cards. That's why back in 2007 Rain Rannu, Veljo Otsason and Martin Koppel (interviewed), having spent most of their working life in the mobile industry, started Fortumo.
Fortumo was the first carrier billing company to create a self-service setup and instant activation, enabling any developer regardless of size or location to set up, get approved and go live with mobile payments within 30 minutes and to monitize their content or service. By focusing on emerging markets and hard-to-monetize regions, Fortumo is now enabling developers to effectively make money from over 90 countries.
1. How would you describe your business to merchants new-to-game?“Fortumo is a direct carrier billing company – we enable users to make payments online by charging purchases to their phone bill. This means that they do not need to have a credit card or even a bank account to make purchases online. If we look at the global digital ecosystem, there are more than 3 billion users who do have access to the internet but no access to traditional bank-based payment methods. We enable merchants to connect to these users. Our global coverage ranges from Latin America to South-East Asia and carrier billing through Fortumo is available to end-users in 90 markets through approximately 30 different mobile operators.”
2. What makes you different from other Payment Service Providers / Merchant Acquirers?“We enable merchants to connect carrier billing in 90+ markets through 350 mobile operators by doing a single integration to our platform. Fortumo takes out the pain of negotiating and integrating carrier billing with each mobile operator separately and integrating once gives access to payments in over 90 markets. On top of that, we take care of paying any taxes in local markets on behalf of our merchants. Our payment products automatically recognize the device being used and optimize the checkout window to provide the best purchase experience possible on any device. We also have a complex fraud monitoring system in place and our risk management team oversees that we detect any potential fraud before it becomes an issue.”
3. What are the triggers for online merchants to switch to your platform?“We do not recommend merchants to use just one payment method as this limits their potential paying user reach. For example, in the US credit cards work fine for collecting online payments. But in markets like India, Brazil and Kenya for example – where credit card penetration can be as low as 1 percent – carrier billing is the best way to monetize a majority of users. Most merchants partner with Fortumo because they get access to paying users in 90 markets by doing a single integration.”
4. What merchants or markets are you targeting?“Fortumo works mainly with virtual and digital goods merchants – music and video streaming services, app developers, game developers and social networks. Our direct carrier billing platform is also used by app stores and device manufacturers and we were the first in the carrier billing industry to pilot the sale of physical goods in partnership with SingTel and Rovio.”
5. How can merchants integrate with your platform?We provide merchants with a turnkey solution to start collecting payments on the web (desktop, mobile, feature phone, smart TVs) as well as turnkey solutions for in-app purchasing to Android, Windows Phone and Windows 8 apps. In addition to that, we provide an API to merchants if they wish to make customizations to their billing set-up and checkout process. All the technical documentation about integrating Fortumo is available at https://developers.fortumo.com/. Most companies are able to set up payment services and go live with carrier billing in less than a week.
6. What may merchants expect in nearby future from your company?“We are looking to other transaction solutions which are working in emerging markets, like e-wallets. During 2015, we are moving to newer segments, and some of these may be more suited for wallets. We are talking to major wallet providers in emerging regions where wallets have the highest penetration, and we’ll run pilots and look at how strongly this business will go.”
7. What are the important trends in online payments from your point of view?“Emerging markets are driving the growth of smartphones. In the next few years, a sizeable chunk of any online merchant’s user base will be people who have means to access online content but no way for paying for it. This is an important thing to keep in mind for any online business - quite soon credit card based payment solutions will simply not be sufficient to collect revenue from a majority of people.”
8. What is your best advice to merchants expanding their business cross-border?“Adopting a local mindset is the key to becoming successful in foreign markets. The best way to understand local user behavior is to actually visit the country and learn about the local digital ecosystem. For example, many people don’t understand the need for localization – less than 20% of people in the world speak English and having your payment solution only available in English makes it very difficult for users to make payments even if they want to.”
9. Cards and Alternative Payment Methods: Competitors or Best Friends?“The two solutions are not mutually exclusive – credit cards have their strong points in large ticket value transactions and mature economies where bank account penetration is high. Alternative payment methods perform best in other areas – for example there is no superior checkout experience on mobile devices to carrier billing as all the information required is already known to the mobile operator and payments can be completed in one click without the user having to set up any additional accounts. If we look at the biggest global online businesses, they use cards and alternative payment methods side by side as it’s the logical path to the biggest revenue.”
The CompanyFortumo provides carrier billing in over 90 countries through 350 mobile operators, including a number of exclusive direct carrier billing partnerships. Founded in 2007, Fortumo has offices in Estonia, San Francisco, Beijing, Delhi, Mumbai, Singapore and London and is backed by Intel Capital and Greycroft Partners. More than 120,000 merchants have signed up with Fortumo and during 2014, the company processed more than 300 million payments.
Who are your Payment Partners?Fortumo is partnered with more than 350 mobile operators in over 90 countries, the full list of coverage and partnerships can be seen at http://fortumo.com/countries.
Are there any upcoming events where merchants can meet you?During the next year, the biggest events Fortumo will be attending are Gamescom, Money 2020 and Mobile World Congress.
Are there specific company white papers or information for merchants to tap into?Fortumo produces a lot of white papers to help merchants get a better understanding of the global carrier billing market. The white papers are available at https://blog.fortumo.com/category/white-paper/.
Contact and Social InformationIf you are interested in working with Fortumo, sign up for a free account at https://fortumo.com/register and we will get in touch with you. You can also follow us on social media and check out our blog:
Also read the other Spotlight articles in our About-Payments Spotlight Series:
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