Blog Post

Verizon Wireless Enters Online Payment Space

Verizon Wireless (s vz) has signed an agreement with online payments company Danal that will enable customers to buy digital goods online and have them billed to their Verizon account using just their mobile phone numbers. This puts the nation’s largest wireless provider in similar company as Apple (s aapl), Amazon (s amzn) and PayPal (s ebay) when it comes to offering a payment platform, but with this strategy Verizon is swinging for the fences.

Verizon is smart to create an online payment platform that it can offer its 91.2 million wireless subscribers, but getting people to use it will be a challenge. If Verizon can get people accustomed to putting in their phone numbers instead of credit cards while  shopping online, then it could own a critical element in building an application and services platform that spans the wired and wireless world. Much like Apple has such a large stake in the mobile application and commerce space today because it has millions of credit cards in iTunes, Verizon could be expanding its own payments information for a similar goal.

Verizon’s billing will work when consumers go to a participating web site and choose something to download. When buying the approved game, music or other content, users click on the BilltoMobile button during checkout and enter their mobile numbers and mobile billing zip codes. Then they get a text message on their mobile phones with a one-time code, and once they enter this code into the online checkout window, they’re done. It’s not clear if Verizon will charge folks for this text.

No pre-registration or links to credit cards or bank accounts are required, which is good. Also worth nothing is that there is a $25 spending limit on purchases made via this platform, which means parents could let kids use it and control both the content the kids can download and how much they can spend. In fact, since teens have cell phones and not credit cards, such a service might really take off among the younger set.

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Image courtesy of Flickr user foforix

5 Responses to “Verizon Wireless Enters Online Payment Space”

  1. I cannot understand why I cannot get on internet. I receive a message each time that Live-hotmail is locked out. I do not like live-mail anyway and cannot understand why I was taken off MSN e-mail. Please reply to this comment!!!
    Ruth Hufdson

  2. Well, this is nothing new. Ask all the SMS and ringtone guys that have been using the carrier infrastructure for direct billing to the customers phone bill for the past 10 years!! Next……….

  3. This really is a no brainer if only Verizon can make it scale, I can see great value and smooth user experience by charging thigns to my phone bill instead to my credit card, Just wonder how they will compete with the lure of loyalty points and loyalty programs offered by credit cards, this could be an impedement, how much of an impedement I have no idea.