eBay has signed a cash deal worth $240m to
acquire mobile payments platform Zong to strengthen its wholly
owned alternative payments service PayPal’s position in the
m-payments game.
Zong leverages connections with more than 250
mobile network operators around the world and offers localised
payments capabilities through direct carrier billing for digital
goods and services in 21 languages and 45 countries.
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Consumers enter their mobile phone numbers,
then, in a matter of seconds, Zong verifies that number and clears
the payment on the customer’s existing wireless service
account.
Scott Thompson, president of PayPal, expects
the acquisition of Zong to allow PayPal the potential to reach
those 4bn people around the world who carry a mobile phone –
including people who do not have, or choose not to have, bank
accounts or credit cards online.
“We believe that Zong will help strengthen PayPal’s leadership
position in digital goods and mobile payments, because it brings
complementary technology and employee expertise that we expect will
help us grow the business even faster,” said Thompson.
PayPal expects to process $3bn in m-payments
by the end of 2011, a sharp rise of $1bn from previous
estimates.
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By GlobalDataThe increase in mobile transactions is down to
the adoption of more smartphones and a growing familiarity with
PayPal said Laura Chambers, PayPal’s head of mobile.
The service now has 8m users and is seeing up
to $10m a day in total m-payment volume.
“I really can’t wait to join Scott Thompson’s
team over at PayPal. The energy, passion, and drive of the team
combined with PayPal’s unique scale and capabilities in payments
convinced me this was the right way to accelerate what we’ve
built,” said David Marcus, CEO of Zong.
“Most of e-commerce will shortly become
m-commerce, and I genuinely believe that PayPal, hand-in-hand with
wireless carriers around the world will win in a big way. We’ll be
working very hard on things that will blow your mind.”
eBay does not expect the acquisition of Zong
to have a material impact on its financial guidance as issued in
conjunction with its first quarter earnings release. The
transaction is subject to customary closing conditions, including
regulatory approval, and is expected to close in the third quarter
of 2011.
