Zong Gains $15M in New Funding

Mobile payments platform Zong, which offers carrier and credit card billing, has landed $15 million in new VC funding and has been spun off from its parent Echovox. According to a piece in Businessweek, the money will be used to further diversify from virtual goods into other online payments. Zong is also the platform behind Facebook Credits.

Former PayPal executive Dana Stalder is an investor and board member. 

Zong, which has more than 170 global carrier relationships, is up against Boku and PayPal, among several others, in the quickly ramping mobile payments segment.  There's much greater simplicity -- and potentially security -- in using a mobile phone tied to a credit card for payments online and maybe in the "real world."

While "virtual goods" on social networks is a large, potentially multi-billion dollar opportunity over time, the real action for mobile payments is e-commerce and real-world transactions. Using a phone number (and associated authentication) can remove some of the friction from online purchases and could represent a more secure way to conduct credit-card transactions in stores or restaurants. 

There are many barriers to entry in mobile payments and the companies, other than the incumbents, that develop momentum in the segment (e.g., Boku and Zong) are in a position to be acquired for significant amounts or go public at some future point.