eBay Acquires Zong for $240 Million to Extend PayPal Reach

Online auction website eBay has moved to acquire mobile payments services provider Zong for $240 million in cash.

Zong offers service which allows consumers to purchase goods and services online and pay for them via direct carrier billings. They can add the goods to their monthly phone bills, all for the sake of convenience.

The company has partnerships with more than 250 mobile phone carriers around the world and has received $26 million in funding from Matrix Partners, Advent Venture Partners, and Newbury Venture

Zong has even helped social networking giant Facebook to develop Facebook Credits, a virtual payments system reports CNET. The company also has partnerships with social games maker Zynga, Disney’s Playdom and IMVU.

"Our customers love the convenience of paying with their mobile numbers--a number they know by heart, and a device that they always have with them," David Marcus, CEO of Zong, said in a statement.

"We look forward to extending our services to PayPal's more than 9 million merchants around the world. And we're committed to working with carriers and merchants to help them drive more sales across devices", he added.

The acquisition is expected to be closed in the third quarter of 2011.