Online merchants, namely gaming companies, are lining up for the chance to offer consumers the ability to bill their digital goods to their Verizon Wireless phone bills.
Danal, the company behind the billing solution, today announced dozens of online merchant partners for its first U.S. service launch. Danal is the South Korean company behind BilltoMobile in the United States.
The company didn't name Verizon in its press release, but since Verizon is its only announced U.S. carrier partner, it stands to reason the merchants are lining up for that carrier's bills. Among the merchants are Nexon America, which goes live tomorrow, as well as NHN, Perfect World, Ntreev, Gamepot USA and more.
The way it works: A consumer may be playing an online game and want to upgrade or buy an item that will help in game play. Instead of reaching for a credit card, which they may not own, they can use their mobile phone number to buy items that cost a few dollars. (Verizon imposes a $25 per month limit on such goods so customers don't rack up huge bills.) Merchants adopting the payment option feature it on their eCommerce sites along with other options like credit cards or PayPal.
A Verizon Wireless spokeswoman says the service went live in late May with a handful of vendors. Danal says it will sign on more merchants in the next few weeks.
Danal also reports that in Korea, the addition of its mobile payment solution has, in some cases, led to a 25 percent to 50 percent increase in sales for merchant partners. Part of the reason for that is it's easy for people to make purchases when they can bill small amounts to their mobile phone bill and don't need to have a separate card handy.
Merchants say they like the lower fees involved in the BilltoMobile platform. With BilltoMobile, the combined merchant fees are in the mid-teens – quite a bit lower than the traditional 50 percent fees they usually see.
BilltoMobile is mum when it comes to the progress it is making with other carriers but hints there may be more on the way. "We have every reason to expect that all U.S. carriers are recognizing the opportunity online mobile payments represent and will be moving forward with truly competitive Direct Mobile Billing for online digital goods and services," says Denise Archer, BilltoMobile's vice president of Carrier Sales.
Other bill-to-mobile-phone companies include Zong and BOKU, which work with aggregators. BilltoMobile connects directly with carriers' billing systems and provides the authentication systems to make it secure.
Update: A Zong representative says Zong builds off its direct carrier relationships to give merchants the best rates and end users the lowest prices – not aggregators.