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Case Study: Zong – Frictionless Mobile Payments

July 15, 2011

Until last year, Zong, a California company that facilitates mobile payments for online game players, used no technology at all to pay its own bills. Rightrail_zong_mobile2

"Our customers use their cell phone numbers to purchase virtual goods,” said Bing Cheng, Zong's accountant. “But before I arrived, Zong’s CEO paid the bills by hand-writing checks and stuffing them into envelopes. Fortunately, Zong uses QuickBooks and I had used QuickBooks' integration with at a previous employer. It took me less than an hour to move our accounts payable onto's electronic payment system – really it was a lot easier than I thought it was going to be, even after using before."

Zong makes the process of paying for virtual goods online four times faster than using a credit card. If a social gamer playing FarmVille on Facebook, for example, wants to till his strawberry and eggplant fields more quickly, he can order a virtual tractor for $3.30 and pay for it by entering his cell phone number on the site. Zong immediately sends back electronic message, and our farmer is off and plowing.

How big is mobile gaming payment? According to Zong founder David Marcus, 250 cell phone carriers around the world allow their billions of mobile subscribers to charge an extra $20 to $100 to their monthly phone bills to pay for virtual items sold by online game developers. Because Zong lets gamers bypass typing in lengthy credit card information to buy Facebook credits, players are more likely to spend and complete their transactions quickly.

But back at Zong's new world headquarters in Menlo Park, paying the company's bills was a drag. Zong was spun off from a Swiss parent company in 2010 and was essentially in start-up mode with only 35 employees when Cheng arrived. "I would introduce any small company that does accounts payable to Storage space is at such a premium. As soon as I saw how much paper was being used, from invoices to check stock to printing supplies, you really see the savings,” said Cheng. “Rather than shuffle paper bills, employees had been charging a lot of recurring items to the company credit card. Obviously, that made their yearly audit a pain, because someone had to sort through every credit card statement."

After integrating's online payment capabilities with Zong's QuickBooks, Cheng limited credit card charges to appropriate categories, like travel, and now and pays about 50 bills a month electronically. "Some vendors are sending us their bills by e-mail," Cheng says, "and we scan in the others. Since allows us to add documentation, we can instantly view a bill and all of the information about its status when we need it." Cheng also uses's attachment feature to link each vendor's Tax Identification number with their invoices, in case he needs to file 1099 forms for them at the end of the year.

As with most start-ups, CEO Marcus "likes to know what money is going out the door," Cheng said. Before, that meant waiting for Marcus to approve paper invoices for payment. Now that all bills are on the Internet, "I can shoot him an e-mail," Cheng said, "and he'll send back his approvals. Often, I don't know if he's in California or abroad, at an international trade show." Cheng said that having Zong's accounts payable in the cloud means that he can check on payments from anywhere as well, via his iPhone or iPad. "It's definitely easier than pulling out and rebooting my laptop," he said. “And now Marcus doesn’t have to come back from vacation or a business trip to find a desk piled with bills to manage. has helped us time our payments to maximize cashflow so precisely – our CEO has peace of mind that our bills are not only being paid on time, but we’re managing our cash wisely.”

Saving time for Zong's customers means they can reap their virtual crops or kill their virtual enemies more quickly. Saving time for Zong's accountant means even more in the real world. "Using means I no longer have to do repetitive accounts payable tasks and have an extra 10 hours a month to do something else," Cheng said.

Zong's efficiency has already paid off in a big way. In July, online shopping giant eBay offered to pay $240 million for the mobile payment company.

Download the complete case study here.

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