Last week eBay agreed to acquire Zong, a mobile payments provider. Zong lets people buy products or services with their mobile phone, the charges then appear on your phone bill.
Think Facebook credits for Farmville upgrades and you’ll get the idea of where Zong fits in the market. To make a purchase just enter your mobile phone number onscreen and you’ll receive a text with a one time confirmation PIN code. Confirming your purchase with the PIN and wait for your phone bill to arrive, although with Zong+ you can link your credit or debit card to your mobile phone number and get double your purchase.
You may wonder why PayPal would want to buy this mobile text/billing company and where the interest in social network gaming credits lies. Also if PayPal have an interest in this market don’t they have the expertise to build their own solution? The truth is that all PayPal are really interested in, and the reason they’re coughing up $240 million for Zong is who they know.
Zong have connections with more than 250 mobile carriers in 45 countries and that’s what PayPal want. Zong have done the legwork and with the acquisition PayPal will be well placed to exploit the mobile payments market and take advantage of the billing relationships already set up by Zong.