Mobile Payments Startup ZooZ Debuts In-Ad Payments (Yes, “Ad” Not “App”)

Fresh off its $2 million in Series A funding, in-app mobile payments platform ZooZ is announcing a new product today: in-ad payments. Yes, that’s right, “ad” not “app.” The big idea here is to streamline the checkout process for consumers by addressing some of the challenges with e-commerce on mobile’s small screen, and now connecting that process to mobile banner ads to increase click-to-buy conversions.

With in-ad payments, mobile users will be able checkout by tapping once on a visible banner ad within a mobile app, which then launches ZooZ’s checkout flow. As with ZooZ’s previously launched in-app payments product, the fully native checkout experience here doesn’t require the end user to re-enter their credit card or payment details after their initial sign-up.

For those unfamiliar with ZooZ, the company has been focused on rethinking e-commerce on mobile, with a checkout process that’s designed to reduce cart abandonment. As CEO Oren Levy explained to us last summer, when announcing a partnership with MobiCart, “despite the fact that there’s a lot of m-commerce going on, there’s a lack of uniformity in checkout schemes. Each app creates it own checkout, its own colors and you don’t know how secure it is.”

The first time a user checks out on mobile using ZooZ, they will have to provide their credit card or other payment details (e.g. PayPal, Dwolla, etc.) in a mobile-optimized screen. But afterwards, all subsequent checkouts become one-tap payments. At that point, instead of entering in payment information again, ZooZ simply presents you with an interface where you can flip through your saved credit cards and other payment methods, then tap “pay now” to complete the process.

Today, ZooZ’s in-app payments product has been adopted by 5,500 mobile developers. The company offers a ZooZ SDK for developers, which integrates ZooZ’s checkout into mobile (iOS, Android, or HTML5) apps, and it works with several app building platforms, including Appcelerator Titanium, Phone Gap, and Basic4Android.

Levy says the idea for in-ad payments came to him when he was stuck in an airport playing mobile games and clicking on banner ads within them.

“We were seeing a horrible experience where we were redirected to another webpage and then the whole process was so cumbersome – very long and unfriendly, to say the least,” Levy explains. Screens weren’t optimized for mobile, he says, and you would have to zoom in on the forms provided.

“Then, when we started exploring this world a little bit, we found that conversion rates from banner ads were so low, there was a need for a quicker and easier way to purchase items from banner ads – whether that’s physical goods, services, or coupons, etc.,” he adds.

So the team decided to take their core technology, and make it work with the banner ad medium, too.

ZooZ In-Ad Payment Screens - coffee2

The newly launching ZooZ in-ad payments solution is not being aimed at developers, but rather at ad agencies who will bundle the ZooZ in-ad SDK into their own. Two big-name ad agency brands are currently testing the in-ad payments SDK, but Levy says he’s not able to disclose those by name at this time.

He expects the SDK to exit from beta in a couple of months’ time, however, at which point there will hopefully be room to discuss who’s involved in more detail.

As with ZooZ’s in-app payments platform, the company charges a processing fee or per transaction fee to generate revenue. Fees vary depending on the type of merchant. When offering the full payment processing solution to indie app developers, the company charges 2.8% + $0.19, but when partnering with payment processors where ZooZ only operates as a technological layer on top of the payment processing, it charges different flat fees per transactions.

ZooZ In-Ad Payment Screens - coffee7

The company, now with $3.5 million in total funding, has seen most of its adoption to date in European markets, but is now starting to see some traction in the U.S. and parts of Asia. In Europe, ZooZ has found a niche within last-minute hotel booking apps, Levy notes (e.g. HotelTonight competitors), while in Asia, Japan is its key market. The company is now thinking about expanding further into that country by opening an office there.

ZooZ’s new in-ad payments option is not available publicly today, but can be requested by interested agencies for testing purposes by contacting the company via email or phone.