eBay spends $240 mln to acquire mobile-payment provider Zong to strengthen Pay Pal
08 July 2011
US-based online auction company eBay yesterday disclosed that it plans to acquire privately-held mobile-payment provider Zong Inc, for about $240 million in cash, a move aimed at strengthening PayPal's leadership position in the mobile payments and digital goods market.
Menlo Park, California-based Zong, which is backed by private equity firms Matrix Partners, Advent Venture Partners and Newbury Ventures, was a pioneer in the mobile payments business, where users can charge purchases to their phone bill and is accepted at more than a thousand digital merchant sites,
Zong, which is a mobile payment provider for Facebook credits, has 3.2 billion mobile users through over 250 mobile operators. It provides local payment capabilities in 21 languages and 45 countries.
The merger will help PayPal strengthen its mobile payments business, as the combined companies will have 100 million active accounts globally.
PayPal, an eBay subsidiary, is an industry leader in mobile payments and digital goods market having more than 8 million customers, who make purchases up to $10 million per day.
In 2010, PayPal processed $3.4 billion in payments for digital goods.
San Jose, California-based PayPal expects to transact more than $3 billion in mobile payments in 2011 through its PayPal Mobile Payments Library for developers, PayPal payment apps for iPhone, Android, Nokia and Blackberry, and location-based shopping with Where.