Singtel has found a new revenue stream by tapping a growing market known as "over the top" purchases for mobile devices.
OTT transactions are when a phone user buys, for example, an item or service from a third party - such as a shared ride, an app, a song or a pair of shoes. Singtel's mobile payment system is used - as opposed, for example, to credit cards.
These transactions are different from when a phone user buys video content, for instance, directly from Internet service providers such as Singtel.
On top of selling minutes and gigabytes of data, Singtel will now get revenue each time a so-called "mobile wallet" transaction takes place.
It has developed a new system called Open Platform, which lets mobile commerce (m-commerce) vendors hook up to it to facilitate payments, Singtel said yesterday.
Each time customers use their mobile wallet to make an OTT purchase, the telco gets a commission.
This system is open to online retailers and service providers who want to connect to the payment platforms of telcos in the Singtel group in Asia, Australia, India and Africa.
The Open Platform also includes direct carrier billing. This occurs, for example, when consumers buy apps from the Android app store, Google Play, and charge it to their Singtel bills.
Taxi-hailing app start-up GrabTaxi is the latest to hop on to the Open Platform. Yesterday it inked a deal with Singtel to do this. Other customers of Open Platform include online retailer Lazada and gaming house Asiasoft.
Mobile customers of Singtel's affiliates, namely AIS in Thailand, Globe in Philippines and Telkomsel in Indonesia, will be able to book vehicles using the GrabTaxi app and pay for rides using their mobile wallets.
For now, the telco is focusing on emerging markets where credit card penetration is lower.
The Singtel statement added that GrabTaxi drivers will also be encouraged to use their mobile wallets to accept payments. They will be offered customised data-centric mobile plans tailored in anticipation of their higher data usage needs.
Singtel's chief executive (international) Mark Chong said telcos can collect payments very well. "Telco billing relationships are a key enabler in developing markets where less than 10 per cent of the population own credit cards or bank accounts."
The collaboration will enable more mobile customers to enjoy cashless payments through their smartphones, he said.
Speaking to The Straits Times ahead of the deal, Mr Chong said that the world is going OTT via many services like messaging and social media. Telco networks were considered "dumb pipes" because the OTT services were using them without having to pay for it.
By creating the Open Platform, Singtel is offering a one-stop shop for online retailers and service providers to facilitate payment.
Because the Singtel group of companies are spread out across Asia, Australia, India and Africa, these m-commerce vendors will find it more convenient to facilitate payment as they do not have to approach different telcos.
Singtel's subsidiary online entertainment service Hooq is also the telco's attempt to play in the OTT market. Hooq is a mobile-centric service that is available in the Philippines and Thailand.