The deal helps complete Boku’s U.S. coverage after similar agreements with Verizon, AT&T and T-Mobile. Boku also announced that it has integrated with Deutsche Telekom in Germany, so it’s now handling direct billing with every major carrier in Germany, France and the UK. Users can place transactions on their cell phone bill with Boku by entering in their cell phone number and authorizing a purchase through a text message.

This broad coverage will allow Boku to offer a consistent experience to merchants, who can be more confident that almost all of their customers will be able to use Boku. Ron Hirson, Boku’s president, said the company’s expansion can also help merchants start to think beyond just digital good sales. He said 2012 will be the year more merchants start using Boku to sell things like tickets or news subscriptions.

Carrier billing is still hampered by fees set by the operators that can be in the teens, way more than a 2-3 percent credit card fee. Hirson doesn’t expect those rates to rival credit card fees soon, but he said they will come down even more and should precipitate a lot more sales via carrier billing. He said the U.S. market will start looking more like South Korea, where 20 percent of commerce happens via carrier billing.

While Boku is still known primarily as a carrier billing provider, the company has also moved into the world of in-store payments. In February, the company showed off Boku Accounts, which will allow operators to set up payment accounts for mobile users that will work in physical stores using MasterCardcards, NFC stickers and NFC-enabled phones. Hirson said merchants will ultimately be able to offer payments through both direct carrier billing and Boku Accounts with the underlying accounts tied together. Users would likely get a better deal if they tap a stored value Boku Account.

“The two enginees will work together,” Hirson said. “You will have different payment tools but you can use the same account to pay.”

Boku is growing fast, having just raised $35 million from NEA and Telefonica. The momentum has helped it attract some key hires including Jon Prideaux, former EVP for Visa Europe, and Stuart Neal, managing director of international development for Barclaycard. All of this will be necessary as it competes against PayPal, which bought Boku’s chief rival Zong, and a host of other rivals in the larger mobile payment arena.

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Now, the company is loading up on $35 million from New Enterprise Associates (NEA) and Telefónica Digital, the growth arm of the mobile operator Telefónica, to help it go after the opportunity. The new funding, which includes money from existing investors Andreessen Horowitz, Benchmark Capital, DAG Ventures, Index Ventures and Khosla Ventures, brings Boku’s total to $75 million since its launch in 2009.

The money is intended to help Boku pursue what founder and president Ron Hirson calls version 2 of the company. With Boku Accounts, its new white label service, it is now going after a chunk of the $9 trillion dollars used globally at the point of sale — much bigger than the $350 billion spent online. He said that will require more funding to build out Boku’s technology, enhance the experience and acquire merchants.

“The core of the business is growing nicely and now we want to expand to the global point of sale,” Hirson told me in an interview. “We have this airplane with one engine and we’ve just added a second engine.”

The funding by Telefónica is significant because it shows some of the big carrier support Boku is getting for Boku Accounts. The third largest operator in the world said it will partner with Boku to enhance its mobile wallet services, and will work to implement that across its own businesses and through Wanda, its joint venture in Latin America with MasterCard.

Hirson said that many more carrier partnerships — both big and small — are coming, with the first announcements due in the next month.

Boku Accounts offers consumers a Boku-stored value account through their carrier that will be linked to a MasterCard pre-paid card. Users also get an NFC sticker that can be tied to their account or, if their phone is NFC enabled, link that way. Users will be able to pay with their card anywhere that MasterCard is accepted, or they can pay with their phone at PayPass-enabled NFC terminals.

Hirson said while the service was intended for carriers, banks have also shown a lot of interest in Boku Accounts. He said some banks and financial services face the prospect of being dis-intermediated by payments services like PayPal: Boku Accounts provides them with the option to create their own mobile wallet service, something at least some American banks are looking at.

“Banks are expressing interesting because of the end-to-end nature of Boku Accounts. We issue the card and online offers. We’re building this for other people, so we don’t have the end goal of owning the customer. That appeals as much to banks as carriers,” Hirson said.

The deal with Telefónica grew out of a partnership started last summer, when the Spanish company chose Boku to power its payment API for BlueVia, its global developer program.

Boku is following PayPal in the march toward offline payments. It makes sense building off its existing work in carrier billing. Online payments will still go on, said Hirson, but clearly the bigger opportunity is bringing mobile payments into the real world — and with $35 million in new funding, Boku is poised to compete hard in that market.

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Boku until now has been known for enabling carrier billing for online goods, so users can pay for digital items on Facebook and other online sites using their mobile phone number. But the San Francisco payment startup is leaping into the physical world with the launch of a new white-label offering for carriers that will include in-store payments.

The new service, called Boku Accounts, will allow operators to set up payment accounts for mobile users that will work in physical stores using MasterCardcards, NFC stickers and NFC-enabled phones.

Boku Accounts is seeking to appeal to carriers looking for a digital wallet strategy, giving them a way to offer an all-in-one payment system for online and offline payments. The online payment portion is not the focus at launch but will be incorporated into Boku Accounts later. Boku doesn’t have any carrier customers to announce yet but said it will focus initially on Europe before coming to America. That’s probably because three of the four major carriers here are working on Isis, an NFC wallet, while Sprint has teamed with Google Wallet.

When it becomes available, users will be create a Boku-stored value account through their carrier that will be linked to a MasterCard pre-paid card. They will also get an NFC sticker that can be tied to their account or if their phone is NFC enabled, it can also be linked to their Boku Account. Users will be able to pay with their card anywhere MasterCard is accepted or they can pay at PayPass-enabled NFC point of sale terminals.

Users will be able to get real-time updates and alerts on their spending using iOS, Android and web apps. They can also receive targeted offers and deals from merchants and their carrier through their phone.

Boku becomes yet another payment service looking to get in on real-world in-store transactions. About 90 percent of transactions still take place offline and that’s what PayPal, Isis, Square and many others are looking to attack. We have to see which carriers actually take up Boku Accounts, but the company appears to be in a decent position to strike some deals. It is already working in 60 countries with more than 230 operators tied into its carrier billing system.

Ron Hirson, founder of Boku, told me Boku Accounts is meant to target people who want a cash replacement. And it’s a way for carriers to offer more branded services to their customers and make their phones a versatile tool for payments and offers.

“We’re delivering a platform that has real value that doesn’t wait for NFC but can incorporate NFC and offers and can be used for traditional payments,” said Hirson. “A lot of companies are doing bits and pieces but what Boku does is bring the best parts of NFC payments and cards.”

Doing in-store makes sense for Boku, a San Francisco startup backed by Andreessen Horowitz, Khosla Ventures, Benchmark Capital and others. It’s one of the top options for carrier billing but that market is constrained. With the fees for most carrier billing purchases much higher than traditional credit card fees, it confines carrier billing to being more of an option for digital and virtual goods. And with chief rival Zong swallowed up by PayPal, which is in the midst of pushing ahead with its own in-store payment system, Boku may see that it needs to join the in-store battle now so as not to be left behind.

It’s not clear how many carriers will sign up for Boku Accounts. Most of the big worldwide carriers have been testing or moving forward with their own initiatives, including a lot of NFC projects. But Boku Accounts could appeal to smaller carriers or could be a hedge for operators looking to make sure they have options in the mobile payment space, especially if NFC takes off slower than expected.

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The report, from its IHS Screen Digest division, notes that in-app purchases accounted for about 39 percent of app revenues in 2011, and it predicts that in 2012 that proportion has gone up to 49 percent. By 2015 it will account for 64 percent of all revenues.

In terms of actual value, IHS says that in-app payments were worth $970 million in 2011, and will be worth $5.6 billion in 2015. (Sound too big to you? Please comment below.)

Update: More on why those revenues will be so big. Ian Fogg, head of mobile for IHS Screen Digest, pointed out to paidContent in an email that the $5.6-billion figure “is driven by the vast numbers of new smartphones that will ship over the next few years. As the number of smart devices is so great, the app market revenues will grow greatly, and hence so will the in-app revenues.” He also noted that many pay-to-download apps also feature in-app purchasing options; that will additionally contribute to the total size of in-app revenues. [original article continues]

This represents a big opportunity for app store operators like Apple (NSDQ: AAPL) and Google (NSDQ: GOOG), as well as mobile payments companies like Boku, Zong and PayPal to manage these payments.

And it also represents something of a success, too, considering how much opposition there was to in-app billing when it was first launched by Apple with requirements to pay it 30 percent of each transaction.

“Apple has nailed the mobile gaming and mobile app payment business,” noted Wilhelm Taht, marketing director for mobile social media service Flowd, earlier today. “It’s super frictionless.”

Strangely, the report does not take account of mobile advertising as a route to making money from an app. That could be because the only apps that can actually make any significant money from advertising are those that get the very highest amount of traffic — other long-tail apps that lack scale will face a challenge in trying to use advertising as their main business model.

Today, free apps already have significantly more traffic than paid apps: Nielsen last week noted that consumers mainly use a mixture of these, or a free-only selection of apps; those who only opt for paid apps account for low, single-figure percentages in different categories (around two-three percent). Ironically, paid apps today remain the main way that many of the most successful apps (such as games) are making money.

Free-to-download apps that come with in-app purchasing — so-called “freemium” apps — represented 45 percent of all top-grossing iPhone apps, and 31 percent of the highest-earning Android apps in the U.S.

IHS Screen Digest estimates that some 68 percent of all top-grossing apps had at least some form of “additional content or functionality” available through in-app purchase, which could mean features like extra levels in games, virtual currency to continue playing or extra editions of a publication.

Virtual currency, it says, is the most common form of in-app paid content available today, accounting for 63 percent of all revenues made from in-app purchases.

But while we hear a lot about newspapers and magazines, and increasingly video-based apps looking to in-app payments as a way of getting their users to buy mobile content, overall, this represents a very small part of revenues today: in the UK in Q3 2011, publications accounted for only five percent of in-app payment revenues (no figures for the U.S.), while video accounted for only two percent of in-app revenues in the U.S. and none in the UK.

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The deal comes a week after Boku signed partnerships with French mobile carriers SFR and Bouygues Telecom, which means the company now effectively covers all French mobile users through its existing deal with Orange. It’s a nice haul for Boku and it shows the work that the company is doing in impressing operators with its technical prowess, said Ron Hirson, co-founder and SVP of marketing for San Francisco-based Boku.

“I don’t think we’ve reported how deep our technical platform is, but this is a validation of that,” Hirson told me.

The BlueVia deal means that developers looking to deploy increasingly lucrative in-app payments in mobile software titles can tap Boku’s carrier-billing payment system for simple purchases. And it means fewer barriers for Telefonica users to make in-app transactions. The system won’t, however, work with the iPhone, which doesn’t permit outside payment systems. But it’s a nice win nonetheless for Boku as it looks to expand. It currently operates in 65 countries across 230 carriers and has been competing with Billtomobile and Zong, which is now in the process of being bought by PayPal.

It’s still up to merchants and developers to utilize Boku’s payment system, which is currently employed by 1,000 merchants. But as Boku expands and nabs significant carrier deals, it’s better positioning itself as mobile payment explodes. Juniper Research expects mobile payments to grow from $240 billion this year to $670 billion by 2015.

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Fresh from PayPal’s renewed push this week to win over Internet and mobile payments, AT&T is rolling out a trial of direct carrier billing with Zong, BilltoMobile and Boku. The trial represents the biggest push to date in the U.S. for direct mobile billing, which allows a consumer to buy a product and have it added directly to their wireless bill. Verizon Wireless rolled out a partnership with BilltoMobile earlier this year, but now AT&T may help accelerate the adoption of direct billing by extending the service through some of the biggest names in mobile payments.

This could be a major turning point in helping accelerate the growth of mobile payments, a market that could be worth an estimated $633.4 billion by 2014. Consumers have already been able to pay by phone using services like Zong and Boku, but most of those transactions in the U.S. are through premium SMS (simple message services). Premium SMS billing has had limited appeal with merchants, however, because it often requires fees from the carriers of up to 50 percent of the total transaction.

Direct billing, which both Zong and Boku offer overseas, would bring those fees down to somewhere in the teens — well under 20 percent. Mobile-payment leaders are hoping that by connecting directly into an operator billing system to bring down the fees, they’ll be able to spur adoption among merchants, who may be attracted by the simplicity and relatively frictionless process of billing to a carrier, and also among consumers. A user would simply enter in their phone number when they want to purchase a product and then get a text message confirming the purchase before the transaction is posted to their wireless bill. It’s still more expensive than credit cards or the 5 percent plus 5 cents that PayPal said it will charge for digital goods this week. Mobile payment companies hope the ease of use will help trigger impulse transactions that might have been held up by the lack of a PayPal account or credit card.

“We’re not trying to cannibalize credit cards or an other payment options; it’s incremental,” said Jim Greenwell, CEO of BilltoMobile. “There’s no registration, no friction. Just input the phone number and get a text message confirmation. That’s as safe as you can get if you’re doing an impulse purchase.”

BilltoMobile, in partnership with its largest shareholder Danal Co. of South Korea, is among the leaders in direct carrier billing, which is much bigger in Asia and Europe than in North America. Greenwell said Danal has processed $3 billion since the company launched ten years ago. While most of the purchases are for online digital goods, 20 percent of transactions in South Korea are for non-digital products and services such as movie tickets and dating sites. Zong has also built a strong direct carrier billing business and said now 60 percent of its payment volume is processed through direct carrier integration.

It’s unclear how long the AT&T trial will take, but coupled with PayPal’s pledge to compete for mobile, we may be seeing the start of a mobile payments boom in the U.S. With so much money at stake, it’s surprising that it’s taken this long.

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Papaya Mobile, a Chinese social game maker with more than 3 million users, will support Zong’s one-click payment system, which enables users to buy virtual goods and currency and have their purchases added to their carrier bill. Papaya Mobile said developers who use its virtual currency system will also be able to utilize Billing Revolution for one-click credit card purchases.

The Zong announcement opens a new era for Android developers, who have been waiting for in-app purchase solutions. It’s been one of the reasons why some developers have been slow to write for Android because it was harder to monetize than the iPhone, which has had in-app purchases for more than a year.

This appears to be the first of several options on the way. We wrote back in June about Zong and Boku both trialing in-app payment purchase systems for Android. PayPay also announced earlier this year it would support in-app purchases for Android and was reportedly also in talks with Google to become an alternative payment system for Android Market. Combined with Google’s moves to expand the number of countries whose consumers can purchase Android Apps, and the pieces are falling into place for more dollars for Android developers.

Android Market has grown to 90,000 apps, with more than half of them free, which is sort of fitting for Android’s open source roots. But as Android looks to compete with the iPhone, RIM and come-back candidate Windows Phone 7, it needs to expand its developer base by accommodating app makers who want to make money from their apps. The deal with Zong is the first of many that should get Google to this goal.

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Post and thumbnail photos courtesy of Flickr user Marcin Wichary