New research from ImpulsePay reveals that the ‘charge to mobile’ service market – also known as direct carrier billing, whereby customers charge purchases to their mobile phone bill – has huge potential because it “reaches one and a half times as many consumers as credit cards and over four times as many as PayPal”.

It has been estimated that by 2017, global financial transactions through mobile payments will reach £1 trillion, with revenues billed to direct carrier billing expected to grow to £3.9 billion.

The cost of charge to mobile is billed to the customers’ mobile phone account if they are on a post-paid contract, or taken from available credit if they are on a pay-as-you-go tariff.

The study notes that by allowing customers to pay for goods using their phone number, “many new potential customers are available for merchants, including under 18s or the hundreds of thousands of households that don’t have a bank account.”

“Digital merchants are looking for a payment method that’s quick and universal,” said Tim Green, editor of payments site Mobile Money Revolution.

“They’re finding that many of their customers either don’t have bank cards or just drop out at checkout because the process is so awful. Charge to mobile has immense potential to solve these problems.”

The study claims there are over 85 million active mobile subscriptions in the UK alone, which means the service has the largest share of users of any mobile payment option in the UK, and online merchants have the potential to reach 93 per cent of all adults in the UK by including a charge to mobile option at checkout.

This would be an additional 47 per cent when compared to a stand-alone credit card option at checkout, or an additional 325 per cent more than PayPal, the study asserts.

The figures are based on the 58 million credit cards that were in circulation in the UK in early 2014, of which only 66 per cent were active, and the number of UK registered PayPal accounts, of which there are 20 million.

The study also takes into account similar smartphone apps that allow users to pay for goods direct from their mobiles, such as Barclays’ Pingit, which in 2014 had been downloaded 2.5 million times, equivalent to only 3 per cent of active mobile subscriptions.

Charge to mobile now has a transaction fee of 9.9 per cent, introduced last year, “alongside simpler payment flows,” said Paul Paterson, Commercial Director of ImpulsePay.

“The goal for charge to mobile has always been to reduce the rates enough in order to compete head to head with credit cards as a payment method,” he added.