EBay Inc. is building on the mobile payments strategy of its PayPal unit with its $240 million deal to buy Zong Inc., a company that lets consumers charge purchases of digital goods to their wireless phone bills.
EBay said in a press release Thursday that Zong will add "complementary" technology to PayPal's existing payments platform, which has more than 100 million active accounts worldwide.
Zong, of Menlo Park, Calif., has connections to more than 250 mobile network operators and offers services in 45 countries. Consumers can use Zong's service to pay for content within games on mobile devices or online using their mobile phone numbers.
"We look forward to extending our services to PayPal's more than 9 million merchants around the world," David Marcus, the chief executive of Zong, said in the release. EBay's PayPal subsidiary has been pushing to grow its mobile payments capabilities in the face of growing competition from start-ups like Square Inc. and large players such as Google Inc. and Isis, a joint venture of AT&T Inc., T-Mobile USA and Verizon Wireless.
PayPal recently said it expects to transact more than $3 billion in mobile payments in 2011. It plans to begin testing a mobile payments system for physical, in-store purchases later this year.
The Zong acquisition would fit within PayPal's existing digital strategy. PayPal earlier this year launched PayPal for Digital Goods, a service that lets consumers pay for content in games and on websites with two clicks.
EBay, of San Jose, Calif., said it expects the acquisition to close in the third quarter.
