Vesta Corporation, which specialises in electronic payment solutions, has released the results of an independent research study that it says indicates how an effective prepaid top-up strategy can deliver significant value to the prepaid mobile market. The study, based on operator interviews, shows that the implementation of a direct operator top-up strategy can bring double digit revenue gains and reduced costs.
Given the size of the prepaid market in Western Europe, says Vesta, this can equate to hundreds of millions of Euros annually. Direct operator top-up channels include all operator-managed top-up channels that rely on electronic transactions outside a retail environment, such as the operators website, IVR and handset applications.
Vesta says the research indicates the significant advantages that direct operator prepaid top-up has over other existing top-up methods, including improved performance metrics, lower costs and improved CRM capabilities.
In addition, it notes, direct handset top-up has the ability to remove the fragmentation and complexity impacting the take up of m-payment services, and drive new revenue streams for operators.
The research was carried out by independent telecom consultancy Northstream and is based on the feedback of leading wireless operators across Western Europe. The results have been published in a whitepaper, Time to Top-Up the Prepaid User Experience: How an effective top-up strategy can improve operator performance metrics and accelerate mobile payments.
According to the whitepaper, with overall growth in the prepaid market slowing, operators are looking at ways to reduce costs, while increasing prepaid customer loyalty and revenues. Non-cash (credit/debit card/bank) payment penetration has grown significantly in Europe, and 91% of operators interviewed intend to drive top-up transactions from costly, commission-based retail infrastructures to virtual non-cash top-up (NCTU) channels.
Aligned with this view, says Vesta, not only are operators exploring alternatives to retail top-up, but 100% of those interviewed want to shift their non-cash payment mechanisms from a bank-centric to a direct operator model.
Given this finding, the company says, it is somewhat surprising that less than 20% of the NCTU offerings analyzed in the research included handset-based top-up applications, even though top-up frequency using handset applications can be up to 80% higher than other channels. This increased frequency also results in an ARPU increase of 23%.
The main imperatives stated for adopting a direct top-up approach were avoiding zero credit service interruptions, increasing top-up frequency and improving customer experience with anytime, anywhere top-up availability via  handsets, the web and IVR. However, the research also indicated the ability of direct top-up to enhance CRM capabilities, enabling operators to identify high value customers and cross-sell, while customizing and optimizing user experience. Indeed, over 90% of operators interviewed highlighted the need to strengthen the way that top-up integrates with their online services and other operator-controlled channels.
When prepaid direct top-up is executed properly, it not only offers an opportunity to increase the ARPU of prepaid but also provides the foundation for operators to seamlessly offer a wide range of profitable mobile payment services from the same platform, says Vesta CMO, Chris Parsons. Aside from prepaid debit reload, other services such as peer-to-peer transfer, international remittance and mobile commerce become far more readily accessible.
You can download the whitepaper here.