Considering all the earnings announcements yesterday, it’s easy to see why some news in the mobile payment space might have gotten missed. Yesterday, BilltoMobile and BOKU, two quasi-competitors in mobile payments, announced they would get together to offer secure mobile payments for Verizon Wireless customers.
The deal essentially means BOKU will route its Verizon traffic through BilltoMobile, the San Jose, Calif.-based company that securely integrates direct with carriers. Last March, BilltoMobile announced it was enabling Verizon Wireless customers to pay for online content and digital goods by charging it to their phone bills. The payment service comes with a $25-per-month spending limit for such purchases.
The collaboration basically means a lot more merchants will have access to direct mobile billing – a win all around, including for consumers, says BilltoMobile CEO Jim Greenwell.
Is it a situation of getting together or getting squashed by bigger competition, maybe from the likes of Visa? No, he says. Many merchants are happy to benefit from fees that are significantly lower than traditional premium SMS rates, and BOKU has a lot of high-profile merchant accounts, including Facebook. BOKU’s mobile payments platform is live in 65 countries.
There’s been a lot of press about Google’s NFC goals and endeavors, but Greenwell says that kind of point of sale commerce is a cousin to direct-to-mobile billing.
Initially, a lot of direct-to-mobile bill purchases involve online games, but that’s not the main market. In Korea, 80 percent of the public uses mobile billing, and of those, one in five are buying non-digital goods purchases, like pizza or books. Social media and gaming are considered the low hanging fruit, but it will evolve to much bigger things.
The deal with BOKU is non-exclusive, so BilltoMobile could do deals with Zong or others in the space as well. Update: A Zong spokesperson says it has a similar deal with BilltoMobile, although nothing has changed for Zong users who already were able to bill to their Verizon accounts. Zong previously was able to do this through other aggregators.
BilltoMobile is majority owned by South Korea’s direct mobile payments pioneer Danal. BOKU is backed by VCs that include Andreesen Horowitz, Benchmark Capital, DAG Ventures, Index Ventures and Khosla Ventures.
