EBay Acquires Mobile Payments Service Zong for $240 Million
In yet another acquisition, eBay picked up mobile payments company Zong for $240 million in cash to continue to build out PayPal's artillery in mobile. Zong enables payments largely for virtual goods in games with the transaction showing up on mobile phone bills.
Zong lets users enter their mobile phone numbers to make a purchase, and partners with 250 mobile carriers around the world. In all, those carriers encompass 3.2 billion mobile users.
This is eBay's second recent mobile payments acquisition, after Fig Card in April. Like Twitter co-founder Jack Dorsey's startup Square, Fig Card lets merchants accept mobile payment with hardware, in this case, a USB device that plugs into point-of -sale. EBay's PayPal, which already holds 100 million accounts for its online payments service, is making a range of bets in mobile transactions, considering so many players are attempting to skin that cat in different ways.
Everyone from established stakeholders in mobile and finance, such as carriers and credit card companies, to startups and internet giants are floating different methods for mobile payment. AT&T, Verizon and T-Mobile in the U.S. have joined forces to launch a payments service and wallet, Isis; Google, with Citi and MasterCard, launched its own service, Wallet, this May. Those concepts rely on special near-field communications (NFC) chips on phones for touch-to-pay at registers, while others, such as Square, require iPads to facilitate transactions as the new point-of -sale.
Already a powerhouse in mobile payments, PayPal expects to transact more than $3 billion in mobile payments this year from 8 million customers. Mobile payments globally are expected to reach $984 billion by 2014, from $162 billion in 2010, according to the Yankee Group.
EBay, along with the entire retail sector, has been extremely acquisitive in recent months. Mergers and acquisitions have been focused on adding companies with expertise in mobile and social media commerce especially.