What do we make of Nokia putting up $70 million in a mobile payment company? The world's largest mobile manufacturer, Nokia is backing Obopay that basically turns a mobile phone into an interactive banking card. Nokia did not disclose the price but an SEC filing from Obopay showed the smaller firm made a $70-million equity offering.
Nokia’s much-awaited Ovi, an online portal for downloading music, games, multimedia applications and software, is due for a global debut anytime now. Nokia's step towards enabling users to buy their services through an Obopay-like service suits the Finnish company’s bouquet. Remember, Vodafone too had signed a mobile payment platform deal with Western Union a few months back and not to mention eBay’s PayPal platform that’s most common in the US. These deals underline the faith of the companies in the uptake for mobile payments.
If statistics are to be believed, 90 per cent or even more adults from urban India have mobile phones but only 16 per cent have debit cards. Earlier this year, Gartner too had backed mobile payments claiming that it was on the brink of a hockey-stick growth curve. The research firm had projected that the number of mobile payment users in the US would rise from a little over one million to day to about 7.1 million by 2011. It said that the ranks of Asia-Pacific users would rise from 28 million today to 67.4 million in 2011.
The numbers only heighten the belief that Nokia is gunning to chance a strapping position in the web-based platforms, especially in web services targeted at developing nations like India. Obopay's payment platform, available in the US and India, allows users to pay through SMS. The funds can either be directed to come out of bank account or credit cards. And it does not stop here. People who lack bank accounts can prepay funds into an Obopay account and then simply zap SMSes to buy services.
So, are mobile payments finally having their day in the sun? The answer is the affirmative. In an earlier conversation, Shiva Kumar, country head of Nokia India had indicated that Ovi will have everything and more than what Apple iTunes offers today. Obopay had successfully developed a cash transfer service that can be deployed on any mobile phone (since it is SMS-based) and uses easy-to-remember account numbers that are users' mobile phone numbers.
