Zong snapped up by eBay for $240M

Online auction house eBay continues to ramp up its mobile commerce, acquiring mobile payments technology firm Zong for approximately $240 million in cash. The transaction is expected to close during the third quarter of 2011.

The Zong solution enables consumers to purchase digital goods and services with a single touch. After users select the item they wish to buy, Zong automatically verifies their mobile number via SMS, bills their operator account and returns them to their mobile app or game experience, all in a matter of seconds.

Zong touts more than 250 carrier agreements, reaching 3.2 billion mobile subscribers in 45 countries and 21 languages. The firm is the mobile payment provider behind Facebook Credits, and its services are accepted at more than a thousand digital merchant sites. Last year, Zong--along with fellow mobile payment solutions providers BilltoMobile and Boku--launched a trial with AT&T (NYSE:T), enabling the operator's subscribers to charge online products and services directly to their monthly bill.

The Zong platform, eBay said, will complement its existing PayPal digital commerce efforts, giving consumers additional choices for conducting mobile and online transactions. PayPal said last month that its 2011 mobile total payments volume will reach $3 billion, up from the $2 billion target the company forecasted in February. PayPal now processes $10 million in total mobile payments volume each day, increasing from $6 million in March.

Earlier this year, eBay (which acquired PayPal for $1.5 billion in late 2002) said its own mobile payments service grew 23 percent during the first quarter to $992 million, almost 40 percent of its total revenue. In addition, eBay CEO John Donahue said PayPal is on pace to emerge as the company's biggest business within the next few years.

Mobile payments for digital and physical goods, mobile money transfers and Near Field Communications-enabled contactless transactions will almost triple from $240 billion in 2011 to $670 billion in 2015, Juniper Research said earlier this month. Digital goods payments will lead the charge and are expected account for nearly 40 percent of the worldwide mobile payments market by 2015.  

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