Direct carrier billing remains one of telemedia’s most effective payment tools, but changing consumer habits, merchant economics and new browser security measures mean it can no longer carry the whole load. The answer is not to replace DCB with cards, but to build a broader, carefully managed payment stack, as a recent Telemedia webinar explored.
TL;DR:
• Direct carrier billing remains central to telemedia, offering a simple and inclusive way to pay for one-off content and subscriptions.
• But consumers increasingly expect choice, while merchants want wider reach, faster settlement and better returns.
• Adding cards, wallets and other payment methods alongside DCB can deliver that — provided merchants understand Visa and Mastercard’s anti-fraud rules, monitor transactions closely and make security and transparency the foundations of every payment journey.
For much of the telemedia industry, direct carrier billing has been less a payment option than part of the underlying business model. It lets consumers pay for digital content and services through a relationship they already have with their mobile operator, without entering card details or even holding a bank account. It works for one-off purchases and subscriptions, reaches mobile-first audiences and, at its best, turns checkout into a couple of clicks.
None of that is about to disappear. Indeed, research from Juniper Research cited during a recent Telemedia webinar sponsored by NextGen Payment suggests that the value transacted through DCB will rise from $51bn in 2026 to more than $87bn in 2030.
Yet the context around DCB is changing. Consumers increasingly expect to choose how they pay. Merchants want access to customers beyond their carrier relationships, faster settlement and a larger share of each sale. Meanwhile, the move towards HTTPS by default threatens to make some of the slickest DCB journeys less seamless.
The emerging case for cards, then, is not an argument against DCB. It is an argument against relying on any single rail.
“We’re not talking about you replacing DCB as a payment option for your consumers,” explains Nisha Suwali, Chief Revenue Officer at NextGen Payment in the webinar. “What we want to really talk about is the value that cards bring when you add them alongside your current DCB rails.”
DCB still does what cards cannot
DCB retains some formidable advantages. It reaches people who do not have cards or bank accounts, as well as those who simply prefer the convenience of charging a purchase to their mobile bill. The operator has an existing relationship with the customer and, in many cases, has already verified them. This helps keep chargebacks low and makes DCB particularly effective for digital goods and recurring services.
It is also well suited to markets in which the mobile account is a more established digital-payment credential than a bank card. For a merchant selling low-cost content at scale, that access and ease of use can outweigh DCB’s higher cost.
Cards, however, fill the gaps. Visa and Mastercard operate across more than 200 countries and allow merchants to reach consumers beyond their existing operator footprint. They also support higher-value purchases that may exceed carrier-imposed transaction or monthly limits. If DCB is unavailable, a card can rescue the sale rather than leave the customer at a dead end.
Digital wallets soften the traditional usability distinction too. Apple Pay and Google Pay can offer a rapid, authenticated checkout without making a consumer type in a long card number.
That matters because the shift is not simply from carrier billing to plastic. It is towards a customer selecting whichever stored credential feels most convenient and trustworthy at that moment.
“Giving the customer the payment experience they prefer allows you to convert that sale,” says Suwali. The implication is straightforward: the checkout should adapt to the customer, not demand that the customer adapt to the merchant’s preferred rail.
The merchant economics are changing
Choice matters on the merchant side as well. NextGen Payment’s illustrative comparison in the webinar suggested that a merchant may return 40% to 50% of a DCB transaction to the operator. On a £10 purchase, it may therefore retain £5 to £6, with settlement potentially taking between one and three months.
For cards in higher-risk sectors, Suwali put typical processing at roughly 3% to 4%, plus 15p to 25p per transaction, with the merchant retaining around 93% to 95% before other costs. Settlement can take one to three days and, in some cases, arrive the next day.
That is not a like-for-like total-cost calculation. Card acceptance can also bring gateway, scheme, chargeback and high-risk registration fees, as well as monthly minimums. Fraud losses and poorly managed disputes can erode the apparent advantage very quickly. But the difference in basic transaction economics and cash flow is large enough to make cards difficult to ignore.
Cards can also make international expansion operationally simpler. DCB coverage depends on relationships with operators and aggregators in each territory. A card strategy gives a merchant a broadly recognised rail across multiple markets, while DCB can continue to optimise conversion wherever strong carrier connections exist.
As Suwali puts it: “DCB opens the doors for those mobile-first markets, but cards enable you to unlock that global scale.”
HTTPS weakens DCB’s friction advantage
This diversification becomes more pressing as Chrome moves towards HTTPS by default. A key feature of many DCB journeys is header enrichment, through which the operator can use network information to identify the mobile subscriber and remove steps from checkout. When browser traffic is secured using HTTPS, that information cannot be passed in the traditional way.
Research from Digital Virgo cited in the webinar indicates that about 90% of two-click payment flows could be affected, not least because Chrome accounts for around three-quarters of mobile browser traffic.
Alternative approaches are being developed, including number verification through GSMA Open Gateway APIs, but implementation will take work across the ecosystem.
“It does change how DCB works, and it does make DCB in some instances likely to be slightly more clunky than it was,” says Paul Skeldon, Editor-in-Chief of Telemedia Magazine. “One of the advantages of carrier billing is that it is slick, and that is often used to offset the fact that it is slightly more expensive than using other payment methods.”
HTTPS does not kill DCB. It does, however, weaken the wisdom of sending every prospective customer down a single route. Merchants need fallbacks, intelligent routing and a checkout capable of presenting the best available method for the user, territory, price point and device.
Cards are not “set and forget”
The counterweight to the attractive reach and economics of cards is compliance. A merchant must pass underwriting and be clear about what it sells. For subscriptions in particular, the checkout must explicitly tell the customer that payments will recur, require an active opt-in and provide a simple cancellation route. Communications, terms and merchant descriptors must make later transactions recognisable.
This is the foundation of fraud and dispute control. If customers repeatedly say they did not realise they had subscribed, that is not merely a chargeback problem; it is evidence of a defective sales journey.
Visa’s Acquirer Monitoring Programme, or VAMP, combines fraud and non-fraud disputes into one ratio. Under the thresholds outlined in the webinar, a merchant enters the excessive tier when both its monthly ratio exceeds 1.5% and it records more than 1,500 combined fraud and non-fraud disputes. Charges can then reach $8 per dispute, with more serious consequences possible if the breach continues.
The volume floor is crucial: exceeding 1.5% alone does not automatically place a merchant in the programme. Nevertheless, there is no grace period before charges apply, so data must be monitored before the threshold is crossed.
Mastercard’s Scam Merchant Monitoring Programme, introduced in July, takes a wider view of warning signals. For newer merchants with more than 500 transactions in a rolling 30-day period, a combined refund and chargeback rate above 5% can prompt investigation. So too can a sharp fall in approval rates, an approval rate below 30%, issuer scam reports, suspect website content or the unjustified use of multiple merchant IDs.
Mastercard’s Global Merchant Audit Programme (GMAP), due to be fully introduced in April 2027, also combines confirmed fraud with non-fraud disputes and monitors at sub-merchant level. The thresholds and potential fines sound severe, particularly for excessive cases, but merchants must meet the relevant volume, value and ratio criteria together; five disputed transactions on their own are not enough.
“What we’re trying to do is make merchants aware of the card-scheme requirements so that there are no surprises,” says Ben Rees, Head of Merchant Monitoring at Paynt. “It can be managed.”
Compliance becomes a data operation
Managing it starts before the first transaction. Merchants should choose an acquirer and payment partner familiar with subscriptions, digital content and higher-risk categories; design clear checkout and cancellation journeys; deploy 3D Secure; and agree realistic fraud, refund and chargeback tolerances.
Once live, they need to monitor approval rates, decline reasons, retries, refunds and dispute codes daily, weekly and monthly. A hard decline on a lost or stolen card should not trigger repeated attempts. Failed subscription payments can be spaced out, capped or suppressed for 24 or 72 hours where appropriate, rather than retried so aggressively that they damage approval ratios and attract scrutiny.
Chargeback alerts can enable a refund before a dispute becomes a formal chargeback. Visa’s Compelling Evidence 3.0 can add recognised device, IP address and purchase-history data to help customers and issuers identify legitimate transactions, reducing friendly fraud. Authenticated wallet and 3D Secure payments can also shift liability in qualifying cases, although merchants must still monitor the transactions and their dispute ratios.
Much of this work should be shared with a capable acquirer. “Once we are satisfied that a merchant is meeting the card-scheme requirements, then a lot of the onus is on us as an acquirer,” Rees explains. That includes issuing alerts, spotting a merchant approaching a threshold and recommending remediation before the problem becomes a penalty.
The schemes will continue to tighten their rules as fraud changes, so compliance is not a one-off project. “It requires a good acquirer and ongoing actions taken by both the merchant and the acquirer,” Rees adds. “Nothing to be feared. It’s something that we deal with many times every day.”
One checkout, many rails
The real lesson is not that cards are cheaper than DCB, nor that DCB is easier than cards. Each statement can be true in the right transaction. DCB offers inclusion, familiarity and low-friction access to mobile-first customers. Cards offer global coverage, faster settlement, higher spending potential and better merchant payout. Wallets add convenient authentication, while local bank-transfer and alternative-payment methods may be decisive in particular markets.
Modern content merchants therefore need breadth, orchestration and control. They should keep DCB where it converts, add cards where they extend reach or improve economics, offer wallets where they reduce friction and support local methods where consumers expect them. Then they must route intelligently and monitor relentlessly.
Consumers want choice. Merchants want reach and yield. The way to satisfy both is to offer more ways to pay – while making security, clarity and compliance the common layer beneath every one of them.
