eBay, which also owns PayPal, has purchased Zong. Zong allows people to make mobile payments for "virtual" goods. Virtual goods are also referred to as digital goods in the world of Internet commerce. This means the good or service is being purchased for use with a virtual good or service. The most common types of virtual goods are e-books and software, particularly gaming software.
eBay has agreed to purchase Zong for $240 million cash in the third quarter. eBay, which also owns PayPal--an online payment giant--plans on merging Zong technology into the PayPal product offering.
PayPal customers will have the ability to make mobile payments for virtual goods using their cell phone or mobile device. The payment is then charged to the monthly wireless bill. If the rollout to digital products is successful, eBay may consider allowing offline or non-digital purchases as well.
The process is fairly simple. Once a PayPal customer is ready to checkout, they can make a mobile payment by entering their mobile phone number. PayPal then sends the user a text message a few seconds later to verify the charge by replying to the text or with a PIN number that is entered where prompted on the website.
Convenience is the Bottom Line
No doubt this move will increase eBay's bottom line with additional fee income--that's what technology is all about. For most people, convenience is key and this acquisition will give PayPal customers one less password to remember. On the flip side, it also increases the need for increased cell phone and mobile device security.