PayPal to enable purchases on mobile bills with Zong buy

EBay announced plans to buy Zong for $240 million

Charging goods, particularly of the digital variety, to a mobile-phone bill may get more commonplace in the U.S. now that eBay plans to buy Zong, a Silicon Valley company.

The deal is worth US$240 million, eBay said. Zong will become part of eBay's PayPal group once the deal goes through.

Zong's system makes it easy for phone users to pay for goods, typically inexpensive items like game credits, on their mobile phones. To make a purchase, a user clicks on a button on a website that says "Zong, buy with mobile." The user enters their mobile number on the payment screen that pops up.

Zong then sends the user a PIN code to their phone. After the user enters the code online, the purchase is complete.

The company has agreements with 250 mobile operators in 45 countries.

PayPal will be able to reach even more users through the acquisition, eBay said. "Zong's expertise in carrier billing means that it has the potential to reach the more than 4 billion people around the world who have mobile phones -- including people who don't have (or choose not to use) bank accounts or credit cards online. By combining Zong and PayPal, we believe we can offer more services to more customers," Scott Thompson, PayPal's president, wrote in a blog post about the deal.

Zong merchant customers that allow end users to charge goods to their cellphone bills include Facebook, Haboo and Playdom.

Carriers outside of the U.S. have been more interested in allowing customers to charge items to their bills, but that appears to be changing. Zong has deals with AT&T and, through BilltoMobile, Verizon, allowing customers of those networks to use its service. BilltoMobile is a Zong competitor but has an agreement with Verizon to provide the direct billing service. Boku is another provider of mobile carrier billing services.

Nancy Gohring covers mobile phones and cloud computing for The IDG News Service. Follow Nancy on Twitter at @idgnancy. Nancy's e-mail address is Nancy_Gohring@idg.com

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Nancy Gohring

IDG News Service
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