The U.K.-based mobile payments firm Bango said it will acquire the U.S.-based carrier billing business BilltoMobile for at least $3.5 million.
BilltoMobile is the American division of Danal, a South Korean provider of mobile identity and authentication solutions. Its partners include all four major U.S. mobile carriers as well as vendors such as Google Play and Microsoft. Other partners include Equifax and Western Union.
A longtime player in mobile transactions, Bango said it will spend $3 million in cash and $500,000 in Bango shares for BilltoMobile, as well as roughly $250,000 more in deferred consideration and fees related to the deal.
BilltoMobile processed approximately $80 million in "end user spend" (EUS) last year, Bango said, "making it the largest carrier-billed payments processor in the U.S. by volume."
Bango supplies carrier billing services for major app stores and said its EUS grew by more than 100 percent last year, and will likely double again this year aside from the BilltoMobile pick-up.
While the market for mobile payments at the point of sale continues to struggle to get off the ground in the U.S., m-commerce transactions are gaining momentum as consumers increasingly buy products and services from their smartphones. A forecast from eMarketer last year predicted U.S. consumers would spend $28.41 billion in mobile transactions in 2015, up 37.8 percent from the prior year. The market research firm also estimated m-commerce would account for 22 percent of all digital revenue in 2015.
And the U.S. market for carrier billing will likely grow as network operators increasingly insert themselves into digital content and services other than traditional mobile offerings. Sprint, for instance, announced a deal last December enabling its customers to purchase content on any device from Microsoft's Windows 10 store and have the charges appear on their monthly phone statement, eliminating the need for a credit card.
"Bango has worked with BilltoMobile as the leading provider of carrier billing in the U.S. for five years," Bango CEO said in a prepared statement. "It is exciting to combine powerful Bango technology with BilltoMobile's high quality service offerings for U.S. merchants and its trusted operator relationships. This development creates a significant additional growth opportunity for Bango and its app store partners."
Shares of Bango jumped nearly 16 percent on news of the deal.
- see this Bango press release
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