Comments on: Zong Lets You Bill Web Apps To Your Phone

By: Meet Zong+, A Mobile Payments Platform On Steroids And Potential PayPal Killer

Meet Zong+, A Mobile Payments Platform On Steroids And Potential PayPal Killer — Thu, 29 Oct 2009 08:54:46 +0000

[...] has seen tremendous growth over the past year from when the company debuted its mobile payments service from the TechCrunch50 demo pit. Zong’s model of billing [...]

By: Micro-Consolidation: PlaySpan Buys Spare Change

Micro-Consolidation: PlaySpan Buys Spare Change — Tue, 21 Apr 2009 13:38:28 +0000

[...] their own plans to become the PayPal of micropayments. And plenty of other startups, from Zuora to Zong, are vying for the title as [...]

By: Muhammad Mehran

Muhammad Mehran — Sat, 21 Mar 2009 04:24:24 +0000

Nice

By: Toni

Toni — Fri, 12 Dec 2008 15:18:12 +0000

Nice work… live in Germany, but i think not really offen used, or? May you give me an example. Thx

By: theScha » Blog Archive » TC50专题二：Zong，用手机支付你的小额账单

theScha » Blog Archive » TC50专题二：Zong，用手机支付你的小额账单 — Wed, 10 Sep 2008 15:40:34 +0000

[...] 原文 [...]

By: Ghaus

Ghaus — Wed, 10 Sep 2008 05:53:12 +0000

Yeah I am from Pakistan and ZONG is a great telecom company here. Goto http://www.zong.com.pk and you will know.

Btw how come both companies using same name and logo font seems to be same too !

By: Trace Johnson

Trace Johnson — Tue, 09 Sep 2008 23:15:54 +0000

This is the same model as Paymo, mGive, PayforIt/SimPay.

Merchants won’t accept the HUGE rents that the provider + wireless carriers will extract, along with the 60-90 day redemption period, and it will always be constrained in transaction size and volume by the carriers’ willingness to take the credit risk.

Full reaction and discussion at link.

By: Bob

Bob — Tue, 09 Sep 2008 10:50:33 +0000

I fully agree with Tal’s comments – the carriers are shooting themselves in the foot for continuing to charge such high rates. Their potential to compete with Visa, Mastercard, Amex, etc. is completely within their control, but they lack the vision to see the potential & harness this opportunity. Even if they only reduced their share of the transaction price down to the 10% or 15% range (nowhere near credit cards 3% – 5% ranges) the carriers would see a massive uplift in transactions processed and would get a huge uplift in revenues. But that will most likely take quite a bit of time.

Also, from what I can see, Zong is very competitive commercially relative to any other option in the cell/mobile billing space. And they definitely have the easiest system to integrate with.

By: David

David — Tue, 09 Sep 2008 05:19:19 +0000

Denis: sure thing. When we say mobile payments converts up to 10x compared to credit card payment for subscription or virtual currency based services, we base that on live traffic we have running across both payment mechanisms on existing services. We witness that in age group 15-25, over 80% of the transactions happen on mobile if given an equal chance to choose between credit card or mobile. The main reasons are:

1) Adequacy of payment method: not all of the users of the target group have credit cards;
2) Fully integrated user experience: users don’t have to leave the website to go to a Paypal or credit card processor page where most publishers lose a good portion of their customers-to-be;
3) It’s simply faster and easier: everyone know their cell number off the top of their heads, they type it, receive a PIN code in a text message, type it back and it’s done -> back to the game/experience.

By: David

David — Tue, 09 Sep 2008 05:12:03 +0000

Dan: chargebacks are pretty low for these types of services as prices are clearly communicated to the end-users. They run below 5% across services. In Europe most carrier don’t even apply chargebacks.

By: hyokon

hyokon — Tue, 09 Sep 2008 01:53:01 +0000

We have been using it for a few years already in Korea. I think it was first started in Korea as well.

It is a pretty good model, but even in Korea I think there is potential for still quicker and easier micro payment. I would like to be able to pay on the spot, like we do with cash.

By: Denis

Denis — Tue, 09 Sep 2008 01:33:39 +0000

David, can you substantiate the “Zong converts users about 10x better than credit cards”? Also, how does it compare to paypal conversion? If conversion is even only 3x better Zong is a win in my book, but I want to know where the data comes from.

By: Dan

Dan — Tue, 09 Sep 2008 01:19:13 +0000

I wonder what the ‘chargeback’ rate is. I imagine its astronomical due to the majority of the userbase using this system would be tweens doing unauthorized charges. The parents must be thrilled.

By: Dan

Dan — Tue, 09 Sep 2008 01:15:14 +0000

Brilliant analysis captain planet.

Digital goods can be profitable at 1% – There is no additional cost in selling 1 unit or 100000 units. that does not mean that you wont lose money on what you could charge.

And just to reiterate- Most US carriers will be dropping this archaic billing system due to intense pressures from local AG’s stemming from fraud in the ringtone/horoscope space.

And I agree with your comment on the execution of a idea- Its a shame they didn’t do more due diligence to save the VC firm some cash.

And wow, 3 years to build this? (they took a A round in 2005) -

Holy. Shit. Back when I was looking at doing this with a team of 5 people, we estimated we could have this entire system built out within 6 months. Either the coders on this project are lazy, or they seriously lack management / skill.

By: anon

anon — Mon, 08 Sep 2008 23:15:30 +0000

David, how do I know that your “cool” phone processing is not cannibalizing my current cheap credit card and paypal processing? I don’t want to pay a 50%-3% fee to do marketing for you. I was shock how much the Telco charges and all the add on fees (eg. SMS fee etc) you charge. What kid of rip off is this?

By: also anon

also anon — Mon, 08 Sep 2008 23:08:04 +0000

Well, if you can process the same transaction with credit card or paypal why would you take that 50% hit?

By: Momekh

Momekh — Mon, 08 Sep 2008 22:29:42 +0000

The main domain for Zong seems to have been hijacked.

Zong is a big telecom company in Pakistan. Right now, the website zong dot com takes you to a wikipedia entry on Pakistan!

By: David

David — Mon, 08 Sep 2008 22:04:31 +0000

Ron: we’re live in Germany, 12 other countries (Western EU + US) and expanding.

By: anon

anon — Mon, 08 Sep 2008 21:34:48 +0000

Dan, ideas are a dime-a-dozen. Execution matters. Digital goods can be sold profitably at 50%+ txn costs.

By: Ron Hillmann

Ron Hillmann — Mon, 08 Sep 2008 21:21:58 +0000

zong launch in germany? i say: “you always are welcome here!”

By: jin

jin — Mon, 08 Sep 2008 21:20:16 +0000

This is a standard way to purchase virtual currency in Asia with one major difference. In Asia, the fee structure actually makes sense – you only pay 10% of the retail price as a fee and keep the remaining 90%. Taking 60% as a fee just underlines the wrong-headed approach that Western carriers continue to take toward content businesses on mobile.

By: Tal

Tal — Mon, 08 Sep 2008 21:09:04 +0000

Credit card companies charge about 1-3% per transaction – Carriers – 30-50%
Isn’t it obvious that carriers are loosing big money here? Instead of becoming the next credit card companies – and take the market by storm – they continue to muscle us up like they were the RIAA

Loosers (literally)

By: jayen

jayen — Mon, 08 Sep 2008 20:56:20 +0000

I made a social network site that attracted about 25k users about 5 years back, and had this business model.

The site is already down, due to our commitments with our existing jobs.

You can see the example here: http://web.arch.../www.angau.com/

In the lower right hand corner you can purchase virtual currency using the mobile phone, and use the virtual currency to purchase things on the site (badges, etc.)

We found out quite soon that the mobile carrier charges were very high so we weren’t making much, you almost always have to charge twice as much on anything, and we were only charging pennies and cents.

Maybe on million user scale this might be worthwhile.

By: TechCrunch Japanese アーカイブ » Zong：ウェブ上の小額決済を携帯料金と併せて請求するサービスを開始

TechCrunch Japanese アーカイブ » Zong：ウェブ上の小額決済を携帯料金と併せて請求するサービスを開始 — Mon, 08 Sep 2008 20:56:11 +0000

[...] ［原文へ］ [...]

By: David

David — Mon, 08 Sep 2008 20:54:51 +0000

Nerve: the reason it’s different is because it’s a hosted payment application that allows you to bill multiple price points to 500+ million mobile subscribers across Europe and the US without the unbearable hassle of configuring every carrier in each of the countries you want to cover. Zong is the mobile payment platform of Echovox that has been around for nearly 8 years and has connectivity with most carriers in Europe and the US.

Roy: Zong takes as low as 3% from what we get from the carriers. Both our share and the carrier’s share improves as volumes of transaction for a given service grows.