Verizon Wireless and mobile payments company Payfone have teamed up today to announce a new partnership which will enable Verizon customers to pay for online purchases using their mobile devices. The online purchases can be paid for using either carrier billing methods, meaning purchases are charged to the customer's next Verizon bill, or they can be paid for using traditional payment methods provided through financial institutions, like credit or debit cards.

Carrier Billing or Credit Card Billing, via Mobile

The new service brings a "one-click" payment option to any Verizon mobile phones that ship with a Web browser. No upgrades will be required to use the service, says Verizon - the option to pay using your mobile will simply appear as a link on the merchants' websites.

For larger purchases that a customer may not want to charge to their monthly phone bill, the option to link a Payfone account to a credit card will be made available.

The deal, which was first reported by The Wall St. Journal on Friday, has been officially confirmed by the companies today.

What makes Payfone unique is its security system. Unlike traditional payments network, it leverages the security built into the mobile operator network while processing transactions. To do so, it ties a customer's SIM card, device ID and location to their account, so that it knows when a different phone is used, or when a phone is used in an unusual location. Payfone also takes advantage of the global SS7 signaling network for connected payment authorization and processing. The end result is a location-based, customer-specific approach to fighting fraud, reducing risk, chargebacks and identity theft.

Payfone is also used by American Express's new Serve payments platform, which just today launched into a partnership with AOL.

Other Verizon Initiatives

Verizon is also involved in other payment initiatives including Isis, a mobile payments service launched along with T-Mobile and AT&T that will allow customers to pay at point-of-sale using their mobile phones.

It should be noted that this is not the first carrier billing program provided by Verizon. BilltoMobile, a Verizon partner since March 2010, teamed up with mobile payments companies BOKU and Zong in January, to offer expanded direct carrier billing options to Verizon customers. The new relationship with Payfone does not aim to replace this current partnership or any other initiative, says Verizon, it only serves to complement them.