CTIA: Verizon Wireless enables purchases charged to mobile bill

Verizon Wireless this week took a step toward turning the mobile phone into a universal payment device, tapping e-commerce vendor Danal Inc. to launch a service that lets mobile users charge the purchase of digital goods to their wireless bills.

VZW and Danal are bringing the BilltoMobile service to the U.S. from South Korea, where it is already successfully deployed. The service is actually a hybrid PC/phone service. Customer’s shop on participating e-commerce Web sites using their PCs and then at check-out click on a BilltoMobile button rather than paying by credit card.

The service works like this: users input their mobile phone number and zip code to authenticate and initiate payment. They then receive a text message on their phone with a one-time passcode. When that code is entered into the payment window, the transaction is complete and the user is billed on their Verizon Wireless bill. The process does not require pre-registration; nor does it require a link to a credit card or bank account to work. Danal said the entire end-to-end-payment process takes just 15 seconds.

In Korea, and in the soon-to-launch U.S. service with Verizon, Danal focuses on supporting the purchase of digital goods, which don’t require real-world fulfillment or mailing. Users buy the online product – such as a game or other digital good purchase – and can download it immediately following payment by phone.

Danal claims that in Korea, 80% of all mobile subscribers have used direct mobile billing and up to 60% of all digital content purchases in the country are billed directly to mobile accounts.

Danal and Verizon said it would name merchants that will support the payment process soon, noting that it is working to sign online game publishers, virtual worlds, social networks, and other sites selling digital items, content and services online.  

Because the service is particularly suited to younger users, who might not have credit cards to make online payments, the offering comes with parental controls built in, including a $25 per month spending limit.