Online auction site eBay has announced it will be acquiring mobile payments provider Zong in a $240 million all-cash deal, in a move to bolster the company’s footprint in the mobile commerce world. The company already controls the leading online payment service PayPal; eBay hopes combining Zong’s mobile payment operations with PayPal’s massive worldwide account base will help PayPal retain its leadership in the online and digital commerce industries.
“With mobile phones, we walk around with a mall in our pockets,” said PayPal president Scott Thomspon, in a statement. “PayPal helps to make money work better for customers in this new commerce reality—no matter how they want to pay or what device they’re using. We believe that 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.”
Zong has relationships with over 250 mobile network operators around the world, enabling it to handle localized mobile payment capabilities in 45 countries and 21 languages; one of Zong’s most visible clients is Facebook, where Zong handles virtual currency sales to mobile users. Although PayPal has a strong background in online transactions and even micro-payments, it does not have relationships with mobile operators; with the Zong acquisition, PayPal will be able to put mobile transactions right on mobile subscribers phone bills.
“Most of e-commerce will shortly become m-commerce,” Zong CEO David Marcus wrote on their company blog, “I genuinely believe that PayPal, hand-in-hand with wireless carriers around the world will win in a big way.”