BilltoMobile signs up AT&T for direct mobile payments

BilltoMobile is announcing today it has partnered with AT&T to allow mobile phone users to purchase goods online via their mobile phone accounts.

Rivals Boku and Zong have also announced similar deals with AT&T.

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Just as the company’s name suggests, BilltoMobile lets you pay for something you want online by billing it to your mobile phone. You simply indicate that you want to pay with your mobile phone number and enter the phone number. Then you get a secure text message on your phone. You then enter the code on the web order. BilltoMobile makes sure that the purchase appears on your next mobile phone bill. Transactions can be completed in 15 seconds and users don’t have to enter a long 16-digit credit card number that they haven’t memorized.

This kind of purchasing has been popular in Europe and Asia, but now San Jose, Calif.-based BilltoMobile, which is majority owned by Korea’s Danal, is making it more practical for U.S. consumers. That’s because BilltoMobile figured out how to directly integrate its billing system with the carrier’s own networks. It also figured out how to do this integration at a low cost.

Because it is directly integrated into a carrier’s billing system, BilltoMobile does not have to send its verification via a premium text message service, which costs more money to do. BilltoMobile can thus charge fees to the merchants that are higher than credit card fees but far lower than prepaid card or SMS text message fees, said Jim Greenwell, chief executive of BilltoMobile.

BilltoMobile previously announced a deal with Verizon Wireless. Between its two partners, BilltoMobile can now reach as many as 180 million mobile subscribers, or two-thirds of the country’s cell phone users, said Greenwell. BilltoMobile says the list of merchants using its solution are growing. Those merchants include game companies that sell digital goods inside their games as well as others who sell virtual goods online. Partners include game publishers Nexon, NHN, Perfect World and Gamania.

BilltoMobile was founded in 2006 and spun out from Danal in 2007; this year, Danal bought back its majority ownership. BilltoMobile has 35 employees. Parent company Danal has relationships with 14 mobile carriers in Korea, Taiwan and China with more than 10,000 participating online merchants.