The deal is much like similar deals that the startup has struck with AT&T and Verizon. It shows that we are heading to a world where it will be simpler to pay for goods with our mobile phones rather than credit cards.
San Jose, Calif.-based BilltoMobile lets users pay for something they want online by billing it to the user’s mobile phone. The capability will be implemented in coming weeks and it means BilltoMobile will be able to reach 240 million mobile subscribers.
With BilltoMobile, you simply indicate that you want to pay with your mobile phone number and enter the phone number. Then you get a secure text message on your phone. You then enter the code on the web order. BilltoMobile makes sure that the purchase appears on your next mobile phone bill. Transactions can be completed in 15 seconds and users don’t have to enter a long 16-digit credit card number that they haven’t memorized.
This kind of purchasing has been popular in Europe and Asia, but now BilltoMobile, which is majority owned by Korea’s Danal, is making it more practical for U.S. consumers. That’s because BilltoMobile figured out how to directly integrate its billing system with the carrier’s own networks. It also figured out how to do this integration at a low cost and in real-time, completing purchases in seconds. It competes with rivals Zong and Boku.
Because it is directly integrated into a carrier’s billing system, BilltoMobile does not have to send its verification via a premium text message service, which costs more money to do. BilltoMobile can thus charge fees to the merchants that are higher than credit card fees but far lower than prepaid card or SMS text message fees.
Between its three major carrier partners, BilltoMobile can now reach the vast majority of mobile subscribers in the U.S., said Denise Archer, vice president of carrier relationships at BilltoMobile. BilltoMobile says the list of merchants using its solution are growing. Those merchants include game companies that sell digital goods inside their games as well as others who sell virtual goods online. Partners include game publishers Nexon, NHN, Perfect World and Gamania.
BilltoMobile was founded in 2006 and spun out from Danal in 2007; this year, Danal bought back its majority ownership.