eBay to Buy Mobile Payment Service Zong

Acquisition will improve PayPal's role in mobile payments, digital goods.

by Auctiva.com staff writer
- Jul 07, 2011

eBay Inc. will pay $240 million in cash to buy mobile payment service Zong, the companies announced Thursday.

eBay will eventually add Zong to PayPal, eBay's payment processor, helping PayPal increase its leadership role in mobile payments and digital goods, says Scott Thompson, PayPal's president.

Zong allows customers to pay for items with mobile phones or computers by adding a payment method to their wireless bill. The service is offered in more than 45 countries and has connections with more than 250 mobile carriers.

Harnessing its expertise will help PayPal reach the billions of people around the world who use mobile phones—and it will help PayPal take a chunk of the digital goods market, which is worth $20 billion today, and is expected to grow "dramatically," according to Thompson.

"PayPal helps make money work better for customers in this new commerce reality—no matter how they want to pay or what device they're using," Thompson says. "We believe Zong will strengthen this value by helping us reach the more than 4 billion people who have mobile phones, giving them more choice and security when they pay."

To buy with Zong, shoppers enter their mobile phone number then Zong verifies the number and clears payments in seconds. The payment process is so easy, Thompson says, that merchants who offer Zong as a payment method have much higher conversion rates than those who don't.

Customers love paying with their mobile numbers—which they know by heart—using a device that they always carry, says David Marcus, Zong's CEO.

"We look forward to extending our services to PayPal's more than 9 million merchants around the world," he adds. "And we're committed to working with carriers and merchants to help them drive more sales across devices."

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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