Verizon Wireless customers soon will be able to charge purchases of digital goods, such a games, to their monthly phone bills, bypassing cards and other payment channels. Verizon had not previously sold its customers any products other than its own offerings, such as ringtones, a Verizon spokesperson says.
Verizon Communications Inc.’s wireless unit on March 22 announced that later this spring it will launch South Korea-based Danal Inc.’s BilltoMobile service, which will enable customers shopping for online games and subscriptions to add the purchase costs to their monthly cell-phone bills. Customers pay no extra fee for the service. Verizon and Danal will split an undisclosed merchant fee.
To purchase games and subscriptions through the service, Verizon Wireless customers must click on the BilltoMobile icon on participating Web sites, then input their mobile telephone number and ZIP codes for authorization. Within 15 seconds, BilltoMobile sends a text message containing a one-time-use passcode to the customer’s handset. The customer then inputs the passcode at checkout on the participating merchant’s Web site to access the digital merchandise.
Verizon initially is limiting monthly purchases from BilltoMobile to $25. “We’re not saying this won’t change, but initially we are keeping the limit low from a collections standpoint so that in case there is a dispute we can manage it,” the spokesperson says.
The service offers only Verizon-approved merchandise and includes content and parental controls.
Danal, which markets digital goods and other products, is providing the merchants and services U.S. customers may purchase through Verizon. Danal has not yet announced which merchants will offer services to Verizon customers.
Nick Holland, a senior analyst with Aite Group, calls the partnership “an interesting development” for mobile payments, particularly for a major mobile carrier testing the waters.
“The most telling thing is the $25 limit because it shows that while Verizon wants to get into the business of mobile payments, they don’t want to risk adding to the sticker shock customers have when they open their cell-phone bill,” he says. “Mobile carriers are very concerned about maintaining relationships with customers, and there is a big psychological risk to piling a lot of charges onto a cell-phone bill that’s already pretty costly.”
But as mobile carriers struggle to find their role in emerging business models for mobile payments, Verizon’s BilltoMobile service could be “an important stepping stone to broader future mobile payments,” Holland says.
“Working with Danal will give our customers the opportunity to make direct online mobile payments with the most secure, feature-rich, convenient method available,” Ryan Hughes, Verizon Wireless vice president of business development, said in a statement.
Separately, Charge Anywhere LLC announced a partnership with Verizon Wireless to enable business customers to charge its services directly to their monthly phone bills. South Plainfield, N.J.-based Charge Anywhere provides software that enables mobile handsets to accept and process credit and debit card payments.
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