The eBay company is quickly adopting the new mobile payments scenario with their large purchase of Zong, a company dedicated to mobile payments.
With an payment equal to the total value of the fruit and vegetable production of entire nations, eBay has made their intentions clear. Mobile payments are on the way. The beneficiary of this deal is a company with a strange name; Zong. They were a branch of another Swiss company named “Echovox”, and are very good at what they do. The purchase will bring many under the umbrella of eBay, just as their purchase of Paypal did.
The $240 million bought a company that has been heavily involved in the service of mobile payments. They cover 3.2 billion mobile users and are in 50 countries and 21 languages. Zong may be a strange name, but they are the only payments platform that mixes high conversion rates of using carrier billing with the low fees of payment cards. With this ability, Zong has been able to make shoppers into buyers at an impressive rate. They claim to be able to do it at up to ten times the rate of traditional payment methods.
So how is this going to work out in real life with a transaction ? The person who wants to buy an item or service will be able to enter their phone number into a participating web site, the system will send out a text message with a response for the buyer to make. When the correct response is made, the buyer’s cell carrier will put the charge on the buyer’s cell phone bill.
EBay was started way back in 1995 and Zong was started in 2008. In the short time that Zong has been around, they have raised a total of $27.5 million dollars. Their biggest past funders were Matrix Partners, a United States based private equity investment firm. Zong has worked with Facebook, and developed the world’s first “one click” mobile payment feature for the Android mobile operating system. This feature makes them very popular for mobile gaming, since an app can have an advertisment in it that will not stop the game if the player decides to buy.
Popular gadget sites have given Zong the title of “Paypal killer” in the past. It looks like they are now on the same team. With Paypal being mixed with Zong, eBay will be prepared to be a front runner in the world of auctions and mobile payments in general.
