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Zong - the New Palpal of Wireless Devices?

April 10, 2011
Gerson Lehrman Group

  * Analysis by: William Stueber
  * Analysis of: Zong Releases Payment Index
  * Published at: www.wirelessweek.com

Summary

With customers like Facebook, David Marcus’ brainchild, Zong, has taken aim at monetizing the mobile experience. in 2000 Marcus founded Echovox, a swiss company, venture-backed by Advent Venture Partners and Newbury Ventures, that now helps more than 100 European carriers in 20 countries expand their revenue base.  With Echovox as a launch pad, now Zong is processing millions of monthly payments in over 40 countries.

Analysis

In the mobile commerce world of Zong, your mobile number is the only one you have to remember. The process is just 2 steps. When a user wants to purchase a item, he can enters his cell phone number on a site, the site sends a text message to the phone, the user confirms the transaction with a short reply, and all the charges go to his cell phone bill.  Sounds simply, right?  Consumers have demonstrated a tremendous appetite in a mobile world that has shown explosive growth statistics and projections for smartphone, game consoles and tablets - the latent value of digital content hungry subscribers would seem a very desirable target for both carriers and merchants.

With revealing statistics that include an increase of 37% for “same client billing” in just the past 12 months, the monthly tracking index shows that consumer adoption is decidedly has been more impacted [delayed] by carrier/merchant policies and spending limits than any other factor.

Perfect for in-app billing, like Google recently announced, however, Google does not offer carrier billing at this time - which would be a decided disadvantage as the wireless subscriber “bank account” of the is already open and waiting. In addition, Zong+ can connect any bank account or credit card directly to a mobile number.

The Zong index available at http://www.zong.com/about/zong-payment-index

Mobile payment gateways are attracting significant attention, and with good reason. More convenient than credit and debit cards and almost always within reach.  Look for partnerships, acquisitions and consolidation in this fast-growing space.

Zong - the New Palpal of Wireless Devices?

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