Payments start-up Zong moves beyond mobile

As part of its "Zong Plus" offering, the mobile payments company will let members use regular credit cards, and offers a loyalty program with which to do so.

Caroline McCarthy Former Staff writer, CNET News
Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos.
Caroline McCarthy
2 min read

The heated mobile-payment wars are expanding...beyond mobile. Zong, one of the start-ups hoping to capture the market for online micropayments billed to a mobile phone, announced Thursday the debut of "Zong Plus," which lets members link credit or debit cards to their Zong accounts.

It's another move that pits Zong against Boku, a competitor that launched right around the same time with broader global reach--last month, it announced its expansion to subscription-based services in addition to on-demand micropayments.

At launch, Zong Plus is compatible with Visa, MasterCard, Discover, and American Express accounts,

"Today you've got a variety of products for different kinds of payments and services," vice president of product management Hill Ferguson told CNET News. "You've got PayPal. You've got several of us in this mobile payment arena. What Zong Plus does is just elevates us into a different mobile payment type."

On the surface, adding traditional credit card payments seems to defeat the purpose of Zong, which inherently tries to offer a simpler and more universal alternative for small payments (cell phone carriers put a cap on how much can be spent). But Ferguson said that Zong Plus, which is free for participating merchants to upgrade to, "is an optional feature for consumers who have payments cards and feel that the incentive that we offer is powerful enough for them to open up their wallet and type in the information."

What's that incentive? Part of Zong Plus is a loyalty program that will rack up points much like airline miles. In a participating game or other micropayments-linked application, this means that when enough points have been accrued, the member may be alerted that their next purchase is "on the house."

Whether it will work is still unclear. Zong has deals with social gaming and virtual-world companies like OMGPOP, IMVU, and Gaia Online, but there are still enough rivals offering similar packages as well as the off chance that a big e-commerce player like PayPal could launch a service of its own and snuff out the competition.

The announcement comes in advance of the Virtual Goods Summit in San Francisco, where pretty much any start-up involved in the latest generation of e-commerce (read: magic swords and Mafia dons) will be showing off its wares. Plenty of other companies will be making announcements, too, presumably some in the payments space.