Verizon Wireless customers will be able to pay for content and digital goods that are downloaded and consumed on their PCs and mobile phones from Danal’s participating network of ecommerce merchant partners. A secure connection and integration between Verizon Wireless and Danal will provide features important to consumers and merchants, including robust subscriber authentication and fraud protection.

“We like to provide customers  with a lot of tools and options so they could do different things right from their mobile devices,” said Debra Lewis, spokeswoman at Verizon, Basking Ridge, NJ. 

“I think if you look at how people shop and where they shop this is a good idea in terms of a next step for commerce,” she said.

The mobile payment service will feature a $25-per-month spending limit for these purchases, along with content and parental controls for individual accounts, giving account owners the ability to manage their BilltoMobile usage. 

When available, customers with text messaging-enabled phones will be able to shop quickly, securely and conveniently for Verizon Wireless-approved content at online stores, including game sites, social networks and virtual worlds. 

Users will also be able to purchase subscriptions to popular online games. 

The BilltoMobile payment service is simple for consumers. 

To conduct a transaction, consumers click on the BilltoMobile button during checkout at a participating online Web site and then input their mobile numbers and mobile billing ZIP codes for subscriber authentication. 

A text message is then sent to consumers’ mobile phones with a one-time passcode. 

Once consumers input this passcode into the online checkout window, the transaction is completed. 

The entire process takes about 15 seconds, and there is no pre-registration or links to credit cards or bank accounts required. 

“Verizon is simply offering their customers another payment option,” said Gary Schwartz, president/CEO of Impact Mobile, Toronto. “Boku, Paymate, Danal and Zong have been running premium SMS services over the carrier network for micropayments for online Web services.”

This channel is traditionally triggered from the Web. A mobile number is entered and a validation PIN is sent in an PSMS message to the phone.

Billing appears on the carrier bill.

“This works well as it is simple, universal and impulse,” Mr. Schwartz said. “What Verzion has done is allow for web subscription to phone bill without the PSMS layer.

“It is not a revolution as it is still limited to high margin digital goods that can be absorb a hefty revenue share to the carrier,” he said. “The only difference is that it is a onetime SMS validation.

“Most consumers like the on demand PIN to phone on a purchase-by-purchase basis so I do not believe we have parted the commerce sea with this particular announcement.”

In Korea, where Danal is the dominant mobile payments provider – and where credit card penetration rates are even higher than in the United States – 80 percent of all mobile subscribers have chosen to use direct mobile billing, and up to 60 percent of all online digital content purchases in Korea are now billed directly to mobile accounts.

BilltoMobile is now partnering with prominent online merchants in the United States, including popular online game publishers, virtual worlds, social networks, and other sites selling digital items, content and services online. 

The merchant fees associated with the BilltoMobile payment service, which Danal claims are significantly lower than traditional mobile billing rates, along with strong security and merchant back office tools, is creating a major network of participating online sites. 

Danal will be announcing some of its signed merchant agreements in the near future.

“Verizon Wireless customers will have an easier way to make purchases from their phones for digital content, such as games,” said Neil Strother, the practice director heading ABI Research’s new Mobile Marketing Strategies service. “It’s also one more step toward wider consumer acceptance of mobile payments.”