Apple Pay launches new carrier billing payment service in Russia

Despite Apple Pay’s slowdown in the US, the company has quietly launched a carrier billing service to its iTunes customers in Russia, the same service introduced in Germany in October. It has partnered with the third-largest mobile operator in the country, Beeline, owned by the Dutch VimpelCom. Instead of the high fees (usually between 10% and 30%) associated with carrier charges, it is believed that Apple has secured a more favourable, single digit fee. Research firm Altimeter Group stated that the move “opens up the market significantly.”

It’s fair to say that Tim Cook’s ‘Year of Apple Pay’ never really took of as recent reports show that in the US the mobile payment service’s growth has slowed down, whilst in the UK the majority of people, even those who are using Apple Pay, are not aware of any Apple Pay points or symbols.

However, this just confirms the healthy attitude of most people about mobile payments: it’s an evolution rather than a revolution.

And Apple has now taken that process of evolution in a new direction by launching a carrier billing service to its iTunes customers in Russia. Users simply type in their mobile number when they purchase music, books or games from the store.

The company has done this relatively surreptitiously, and it’s not even the first time it ventured into alternative digital payments. At the end of October, the company launched the same way of paying in Germany with a partnership with O2/Telefonica.

In Russia, Apple is partnering with Beeline, the country’s third-largest mobile operator that is owned by the Dutch VimpelCom.

Apple’s foray into the world of carrier-billing brings much needed credibility and publicity to a technology that in reality been around longer than most other mobile payments.

One of the biggest reasons carrier-billing has failed to capture the minds, and the wallets, of the people is because of the high fees associated with the carrier charge, usually between 10 and 30 per cent compared to the credit card’s usual 2 per cent. However, in recent years those fees have been brought down, and it is likely that Apple has secured an agreement that would keep the fees in single digits.

“It opens up the market significantly. A lot more people have phones and phone accounts,” Charlene Li, an analyst at research firm Altimeter Group, told CNBC.