Nokia has already said it plans to become the world’s largest entertainment network through its vast share of the mobile handset market (read our September cover story for more detail). Now it looks like the Finnish mobile device maker aims to become the world’s largest mobile bank as well.
“Nokia Money” is a just-announced mobile financial service that will allow consumers to transfer money to another person or entity via their mobile phone number. That means customers will be able to use their mobile devices to pay merchants, settle utility bills, split the dinner check, settle a bet, or top-off their pre-paid SIM cards without ever stepping foot inside a bank, or even opening their wallets.
The service will be built on the back of the mobile financial service company Obopay, which already has extensive experience in moving money via mobile devices, having been in that business since 2005. Nokia also intends to integrate Nokia Money to with other payment services and banking platforms as well.
While Nokia Money offers convenience to those in the first world, Nokia sees the service bypassing traditional banking in the third world. There are 4 billion mobile phone users globally, but only 1.6 billion bank accounts. Many of the remaining 2.4 billion mobile customers don’t have access to even the most rudimentary banking services. Nokia Money intends to step into that void, allowing customers to perform all the functions of a basic checking or savings account right from their mobile phones.
Whether Nokia Money harkens the true beginning of a paperless economy remains to be seen; credit card companies like Visa have tinkered with bringing debit and credit card functionality to mobile devices, only to be stymied by technological hurdles and, more importantly, privacy and security concerns. Other companies are also trying to crack the mobile transaction market. Facebook is developing a mobile payment system for its virtual currency, and individual banks are trying to make it easier for their account holders to conduct financial transactions via mobile devices. But for those without access to ATMs and bank branches on every corner, much less the infrastructure to support a credit card economy, Nokia Money has the potential to thrive. And by thrive, we mean thrive to the tune of 2.4 billion users, a market that’s a bit too large to be called a niche.
Nokia plans to show off Nokia Money for the first time next Wednesday and Thursday at Nokia World in Stuttgart, and will gradually roll out in selected markets beginning in 2010.