One Mobile Payment System to Provide Many Options

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Though ZooZ is now the exclusive payment option for merchants using the mobile commerce platform provider MobiCart, this week’s agreement linking the two tech companies is, paradoxically, about providing access to as many payment options as possible.

The companies announced their deal in a time when an enormous amount of attention is being paid to an increasingly fragmented mobile payment market. Apple (AAPL) and Microsoft (MSFT) just announced their own takes on the mobile wallet, and Google (GOOG) refreshed the pricing of its own wallet this week at a conference it hosts for developers.

“Everyone wants a chunk out of it but … it’s not 'one winner takes it all’ in my opinion,” says Oren Levy, CEO and co-founder of ZooZ. “There is a need in the world for multiple payment options.”

ZooZ, an Israeli company founded in 2010, provides technology that serves as the backbone for payments made within mobile apps. It allows developers to accept payments by credit card or PayPal without setting up a separate merchant account.

“We’re handling everything that has to do with payments for MobiCart,” Levy says. MobiCart has 10,000 clients.

ZooZ had about 1,600 developers registered prior to the MobiCart announcement, and about half were already accepting payments. Since the MobiCart announcement, about 100 more signed up with ZooZ, Levy estimates.

Many payment companies also are taking the approach of aggregating other payment types. In mobile commerce, PayPal provides the same service it does on the Web in allowing merchants to accept credit card payments without a separate merchant account. Similarly, Google’s mobile wallet has a prepaid account that can be funded by payment cards from banks it has not partnered with.

On iOS in particular, ZooZ is going up against Apple, which strictly enforces its policy of taking a cut of digital sales. There are gaps in this policy — for example, Amazon.com can’t sell Kindle books on its app but it can deliver the books to an iOS device if those books were purchased separately in a Web browser — but many merchants may be perfectly happy operating under Apple’s rules, says Aaron McPherson, a practice director at research firm IDC Financial Insights.

“One of the reasons pretty much everybody on iOS uses iTunes is because it’s so easy and seamless,” he says.

For items that fall outside Apple’s policy, such as the sale of physical goods through an app, ZooZ is “up against a lot of competition,” McPherson says. PayPal’s toolkit for developers, PayPal X, “has specific provisions for embedding purchasing functionality on an app and Visa’s digital wallet is going to have that,” he says.

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