Pay For Social Games Using Your Verizon Phone: BilltoMobile Partners With Boku and Zong

Boku and BilltoMobile have announced a partnership to enable direct payments for Verizon's customers. This next generation billing system is poised to be far advanced compared with PSMS and furthers BOKU's credibility in the marketplace.

BilltoMobile has announced partnerships with BOKU and Zong to enable direct payments for Verizon’s customers. This next generation billing system is poised to be far advanced compared with PSMS and furthers BOKU’s credibility in the marketplace. More after the jump.

Essentially payment companies can enhance their business development efforts by partnering with platform providers or working directly with carriers. Back in June of last year Zong and Boku announced support for in-app transactions on Android, billed to users’ mobile carriers securely. This enabled users to purchase anything within an app without ever leaving the app or logging in. This also required some kind of relationships with carriers although these relationships were a bit murky.

Google in turn has also been rolling out carrier billing options in partnership with operators across the globe although the operational costs of forging carrier billing agreements can be a drag. Verizon seems like a big win however for these mobile payment providers and can connect any app that supports BOKU to a users’ Verizon account for payments.

In the era of high-tech convenience, consumers are looking for hassle free payments and this move is an important step in that direction. According to ABI Research, consumers spent $3.4B on non-travel purchases via their cellphone in 2010, a 143 percent increase from 2009. The switch, however, won’t be simple as security and costs are significant barriers to switching to cellphones as alternative to credit cards in your wallet. San Jose-based BilltoMobile and SF based BOKU are aiming to bring reduced rates to customers, closer than ever to credit card levels, well under 20 percent. Connecting to operator billing systems could very well entice merchants to adopt mobile payments.

The process for mobile transactions is fairly simple. Users simply enter in their phone numbers when they want to purchase a product and get a text message confirming the purchase before the transaction is posted to their wireless bill. With purchases being routed to cellphone bills rather than credit cards, federal protections that allow you to dispute inaccurate credit card charges may not remain in place. This becomes more of a risk if you happen to lose your phone. Consumers will be liable for all losses up to a certain amount.

In October of 2010 AT&T rolled out a trial with Zong, BilltoMobile and Boku. This was the biggest direct mobile billing move in the space followed by Verizon’s partnership with BilltoMobile earlier in the year. Mobile payment space is expected to hit $633.4B by 2014 and consumers are becoming more attuned to paying by phone for virtual goods and real goods alike.

BOKU’s current clients include Facebook, EA, eBay Classifieds Group, Playdom, Playfish and plenty of other developers. BOKU also has relations with 230 different carriers worldwide. BilltoMobile (and it’s strategic investor, Danal, a mobile billing platform in South Korea) have processed more than $4 billion in mobile billing transactions

Competitor Zong has also announced a similar deal with BilltoMobile. All mobile payments will be working by bypassing short codes to connect directly with mobile carrier billing systems and their subscriber database. BilltoMobile has such an infrastructure already in place and can measure the efficacy of transactions and offer verifications to all parties.