The credit card based mobile payment system pioneered by 'Zong' is emerging as a fast-growing convenient alternative.
In the last few months, Zong, a mobile payment company, has gained dramatic success in its new online payment scheme as literally millions of online users jumped into the bandwagon of what could be the next 'big thing' in credit payments.
Launched in October last year, the platform, called 'Zong+', allows customers to use their cellular phone numbers to purchase several items online including virtual goods for games and social networking sites. What makes the platform innovative is that the transactions are done by charging the customers' credit cards directly. Formerly, mobile carriers charge extra fees but this platform charges a much lower fee to cover transaction costs.
Virtual goods for online gaming are a rising fad. Zong+ allows gamers to encode their cellular phone numbers instead of having to use the conventional 16-digit credit card number. Users are enabled to link their credit card number (including other payment cards) by means of a 'one-time sign-up process.'
Aeria Games, one of Zong+' current partners since late December last year, began using the scheme in their 'free-to-play online games.' The result of the new payment platform translated into 32% of payment revenue which came from users with Zong+ accounts.
On average, transactions dealing with Zong+ have been found to increase revenue payout by as much as 12 times higher compared to conventional mobile payment schemes. This is largely due to flexible prices and higher payout rates.
The revolutionary scheme provides costs which are about 67% lower compared to conventional payments, bringing in a steady flow of more loyal customers.
Repeat payments increased by as much as 48%. The Zong+ users averaged almost twice as much transactions per month (4.3) compared to other users (2.7).
Zong chief executive David Marcus shared that the results have exceeded their expectations. Currently, Marcus and the company have established partnerships with 20 new game publishers. They have over 1,000 partners at present including 'Slide', 'Kongregate' and 'Playdom.' Their clout in the online gaming industry includes over 500 million users with an estimated reach of 1.5 billion users through other carriers available in 29 countries.
Since late December, the company has expanded coverage to three more countries as they eye forging contracts with six more countries soon.
Last year, about 10 million users processed mobile payments through Zong. Other competitors include Boku, PayPal, credit card issuers and several direct payment service providers.
Zong's success has been attributed to their incentive to lower rates for customers who complete their billing transactions with 'no-frills' attached.