Top 5 Reasons Digital Service Providers Should Consider Carrier Billing in Europe

European Market Overview

It’s no surprise that Europe has gone digital. Multiple lockdowns have forced many European businesses to recover from a drop in sales, considering new revenue streams and innovative new ways to sell their services – many of which have been focusing on digital.

So why is Europe such a lucrative market for digital service providers and carrier billing?

1.    High Level of Digital Adoption

Pre-COVID-19 pandemic, digital adoption in Europe was already at a high level (81%). Post-pandemic, this rate has soared to 95% — an increase that “would have taken two to three years in most industries at pre-pandemic growth rates.”

At a country comparison level, Germany previously had the lowest digital adoption rate, however it has now seen the largest COVID-19 uplift of 28%. It’s also worth noting that while European countries across the board have a high level of digital adoption, Finland and Denmark topped the chart with 99% and 98% of McKinsey survey respondents respectively “having used a digital service in the previous six months.” The pandemic has also decreased the difference between the countries with the highest and lowest digital adoption rates – previously 32%, now 10%.

All in all, it’s good news for digital service providers as European customers have become more tech savvy, more quickly – with more than 70% of survey respondents saying that they “expected to continue using digital services with the same frequency as they do now or even more often.”

With instantly accessible digital services comes an expectation of convenience, making fast and frictionless carrier billing experiences a likely payment choice for consumers.

2.    Average Transaction Value

Customers in the European market are willing to spend, using carrier billing as a payment method.

According to Statista, in 2019 the highest average carrier billing transaction value worldwide was in Western Europe at 5.96 U.S dollars, followed by Central and Eastern Europe at 3.83 U.S dollars, with popular digital content purchased via carrier billing including mobile games and in-game content. Fast forward to 2021 – in May 2021 in the UK alone, the average carrier billing transaction value stands at 16.7 U.S. dollars.

5G

5G in Europe is being driven by many factors such as more employees working from home, an increase in connected homes and cities, as well as edge computing devices.

At the end of 2020, the EU spent one-fifth of its €750 billion recovery fund on expanding digital capabilities and extending infrastructure to enable 5G services that can provide “up to 20 times faster internet speeds than what is currently available.”

Sweden-based equipment manufacturer, Ericsson has forecasted that Europe’s 5G coverage is set to “grow from around 1% of the mobile subscriptions across the continent in 2020 to 55 percent in western countries and 27% in central and eastern countries in the next five years”.

IOT

Going hand in hand with 5G progress, many European enterprises are also focused on implanting IoT to expand the services provided to customers as well as improve operational excellence.

3.    Emerging Technologies & Evolving Customer Needs

Consumer needs are evolving. Europe is staying ahead of the trend in terms of emerging technologies, to keep up with these needs. Operating in a highly-technological market goes hand in hand with offering up-to-date, cashless payments methods and easy ways to pay like carrier billing are becoming increasingly important to consumers.

4.    The Success of Digital Services in Europe

Digital Services in Europe are proven to be successful across the board.

ePublishing

• From 2021-2025, ePublishing revenue in Europe is set to have an annual growth rate (CAGR 2021-2025) of 3.05%, resulting in a projected market volume of US$7,194m by 2025.

Health & Fitness Apps

• In 2020 Germany and Turkey experienced the highest growth in health and fitness app downloads, while Germany, France and the UK saw the largest spikes in consumer spend.

Music

• Europe is the largest market for Spotify. Spotify has collaborated with numerous operators in Europe, resulting in increased conversions to paid subscriptions.

Ultimately the more ways there are to pay for digital services, the more users will end up paying. Offering carrier billing as a payment method can open a new world of users through simple, seamless and secure mobile payments.

5.    Exploring Additional Revenue Streams

Businesses are seeking new avenues of growth in a post-pandemic world, often having to adapt quickly, change their business strategies and find new ways to deliver services online.

European countries such as Sweden are ahead of the game when it comes to moving towards a cashless society – a pattern others are surely set to follow.

Carrier billing can help access new customers and reduce time to market with a single integration – a quick, simple, and convenient process for all involved. It’s no surprise that carrier billing is expected to account for 1 in 5 digital sales by 2024.

The World Economic Forum suggests that the European economy is set for a “U-shaped recovery” post-COVID-19. To aid in the upward movement, it’s important for digital service providers to rethink their services and processes, listen to their customers’ evolving needs and become adaptable and flexible.

Contact SLA Digital today to find out more about unlocking simple, seamless and secure mobile payment solutions within Europe and beyond.