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Information Systems Frontiers
Published in: Information Systems Frontiers 6/2016

01-12-2016

Correlates of using the billing system of a mobile network operator to pay for digital goods and services

Authors: Torsten J. Gerpott, Phil Meinert

Published in: Information Systems Frontiers | Issue 6/2016

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Abstract

In many countries mobile network operators (MNOs) offer their customers the possibility to pay for digitized content, applications or services which they buy over their mobile smartphone via the carriers’ billing systems. To date, customer take-up of this mobile carrier billing (MCB) payment option is predominantly modest. At the same time, there is little empirical evidence on individual level factors significantly associated with the acceptance of MCB payment which differentiates firstly the principal adoption of the service in the sense of a yes-or-no decision and secondly the intensity of service usage among adopters. Therefore, the present study explores correlates between a total of 10 socio-demographic, contract-, communication habits- and smartphone-related variables on the one hand and the two MCB payment acceptance criteria on the other in a sample of 5010 postpaid residential customers of the German subsidiary of a multinational MNO. In contrast to many prior investigations, MCB payment adoption and usage intensity measures in the present work reflect real (and not retrospective subjective estimates of or intended) payment behaviors. A Probit regression analysis indicates that, compared to non-adopters, customers who have paid via MCB are male, have a shorter MNO tenure, have higher mobile service spending, generate more mobile Internet traffic, send more SMS and use a smartphone whose OS manufacturer offers MCB payment on its own online market place. In the subsample of adopters of MCB payments higher mean monthly MCB settlement amounts are generated by male and older subscribers who have a shorter MNO tenure, create more mobile Internet traffic, use mobile voice telephony more and SMS less heavily and who are equipped with a smartphone whose OS manufacturer does not offer MCB payment on its online market place. Findings are discussed in terms of their implications for scholarly research on antecedents of the acceptance of novel telecommunication-based service offerings such as MCB payments and of basic levers of MNOs for improving the customer take-up of their MCB payment offerings and the usage intensity of the service among its adopters.
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Footnotes
1
The focal payment service of MNOs does not cover physical goods. One likely reason behind this limitation is that MNOs have already introduced additional services to pay for physical goods (e.g., near field communication (NFC)-based services). Put differently, MNOs have launched several payment systems which address different market segments and try to supplement (and do not substitute) each other.
 
2
A viable alternative regression approach for a dichotomous dependent variable is the Logit model. It assumes a logistic distribution of the stochastical error term in the equation whereas the Probit regression assumes a normal distribution (Wooldridge 2013). In our sample Probit and Logit regression results were substantively very similar. However, the Probit model fitted the data somewhat better than the Logit model. As a consequence, we only report the Probit regression results as the first outcome of the two-part approach.
 
3
Likelihood (L) ratio = −2 x [ ln L (Tobit model) – ln L (Probit model) – ln L (Linear OLS or truncated regression) ] = −2 x [ −6578.24 – (−2832.40) – (−3266.54 or −3216.12) ] = 959.44 or 1059.44. The critical value at the 99.99th percentile of the χ2-distribution with 10 degrees of freedom amounts to 35.56. This implies that the fit of each of the two-part procedures with the data is significantly better than the fit of the single-step Tobit approach.
 
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Metadata
Title
Correlates of using the billing system of a mobile network operator to pay for digital goods and services
Authors
Torsten J. Gerpott
Phil Meinert
Publication date
01-12-2016
Publisher
Springer US
Published in
Information Systems Frontiers / Issue 6/2016
Print ISSN: 1387-3326
Electronic ISSN: 1572-9419
DOI
https://doi.org/10.1007/s10796-016-9694-2

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