PayPal, the digital payment arm of eBay Inc. (EBAY) announced a partnership with Deutsche Telekom related to direct carrier billing. This association will allow Deutsche Telekom customers to make payments for online digital goods by using their mobile phone numbers. The companies, however, did not disclose the financial terms of the deal.
As per the agreement, Deutsche Telekom will now join more than 250 carriers who are part of PayPal’s network.
The two companies plan to expand carrier payments all over as well as beyond Europe. They look at this relationship as an opportunity to attract more customers as well as reach out to more digital goods vendors.
The collaboration will offer mobile users a safe way to purchase digital goods and apps on merchant websites and make payments through their mobile phone bills. Moreover, the service requires the customers to only remember their mobile numbers for making the payments instead of account ids and passwords.
The companies also intend to make unacquainted vendors familiar with the service so that they can include it as a payment option. Thus the collaboration will facilitate business expansion for both the carrier and the merchants.
However, there has been no announcement regarding the availability of the mobile billing option.
With the introduction of smartphones, direct carrier billing has become a popular way of making payments. It allows users to make purchases via their phones from merchants without entering credit card data. Such transactions are comparatively faster and safer.
Deutsche Telekom is an integrated telecommunications company, which provides permanent networks, mobile connection, Internet products and services for households and ICT solutions for corporates. It currently operates in 14 markets all over Europe
PayPal was acquired by eBay in 2002 for $1.5 billion. It also invested resources to develop PayPal as a strong payments platform. Its efforts clearly paid off because PayPal is now the major growth driver and one of the most important reasons for investors’ confidence in the company..
Today, PayPal accounts for a large percentage of eBay’s total revenue. Additionally, it along with fulfillment services, enables eBay to provide a complete solution to retailers, whether brick-and-mortar or online.
Currently, eBay holds a Zacks Rank #4 (Sell).
Some better-ranked stocks worth considering from the same sector include Liberty Ventures (LVNTA), Priceline.com Inc. (PCLN) and Netflix, Inc. (NFLX). While Liberty Ventures sports a Zacks Rank #1 (Strong Buy), Netflix and priceline.com hold a Zacks Rank #2 (Buy).
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