eBay acquires mobile payment company Zong for US$240m

7 Jul 2011

eBay has acquired Zong, a company which provides payments through mobile billing, for US$240m in cash, aiming to bring its services to PayPal.

Zong works with more than 250 mobile network operators worldwide, offering localised payment services on a user’s mobile phone or PC through their carrier billing.

When a user enters their mobile phone number, Zong verifies it and clears the online payment.

eBay is looking to use this technology to strengthen PayPal’s position in mobile payments and digital goods, allowing users to pay for products online anywhere.

“Commerce is changing. With mobile phones, we walk around with a mall in our pockets. 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,” said Scott Thompson, president of PayPal.

“We believe that Zong will strengthen this value by helping us reach the more than 4bn people who have mobile phones, giving them more choice and security when they pay.”

The acquisition will close in the third quarter of 2011.

PayPal expects to transact more than US$3bn in mobile payments in 2011 and currently has 8m customers making purchases on their mobile phones through its services. PayPal mobile payment customers spend up to US$10m per day.

eBay said it does not expect the acquisition of Zong to impact its financial guidance, which it issued with its first quarter earnings in April.