This week in Paris at the Cartes exhibition, Visa was showing off what they’re working on for mobile payments. They demos a native iPhone application, along with a Visa application that is embedded on a SIM card. The most exciting stuff, NFC, is shown off on a shipping Nokia (NYSE: NOK) device. Payments under 20 EUR are just tap and go, useful when you’re in a crowded bar and don’t want to fiddle with credit cards or hard currency, while payments over 20 EUR require a tap, a PIN code, and then another tap to confirm. The sad thing about all of this is that we’re unlikely to see it for at least another year or two. That’s just enough time for Nokia to start rolling out Nokia Money to customers and operators around the world. Here is hoping that rumour of the next iPhone having NFC is true. I’m tired of having to sign little pieces of paper.
While Japan has been using NFC technology to enable mobile payments for years now, the rest of the world has been lagging in terms of mobile payments. Europe, the continent that was the first to launch GSM technology on a massive scale, still hasn’t figured out mobile payments. Premium SMS doesn’t count since it is mostly used to buy annoying ringtones and wallpapers from even more annoying commercials that play around midnight on weekdays. America, land of the consumer whores, still hasn’t figured out how to make the connected device inside millions of people’s pockets into a cash machine. It is Africa, a continent battling AIDS, power outages, contaminated water, and who knows what else, that is leading the way with M-Pesa.
You realize that these people don’t have the iPhone, or some fancy Nokia (NYSE: NOK) smartphone, they all use el cheapo handsets to send specially formatted text messages to handle payments. SMS is driving the mobile transactions in Africa, and I’m frankly jealous. In Africa people use M-Pesa for food, electricity, and now according to Daily Nation East African, Air Kenya and Aircraft Leasing Services are letting you pay for your airfare via SMS, Rift Valley Railways is letting you pay for your train ticket via SMS, and Akamba, Crown Bus and Busways are letting you pay for your bus ticket via SMS. When is Nokia Money going to launch around the world and let me pay for the daily lunch I have at my local Thai place via SMS, or a drink in a club on a Saturday night via SMS?
Looks like Obopay isn’t the only parter Nokia (NYSE: NOK) is going to be working with on providing mobile payments. Today Nokia signed a 5 year agreement with TANLA, an Indian company, to provide a “mobile payment service to enable on device transactions”. Tanla’s service works in 160 countries and can use both operator billing and credit card billing.
“This agreement further highlights our strong track record in processing secure transactions on the handset and our position as a trusted supplier of mobile payment services. Through a single integration with Tanla, application developers can monetize their services in 160 countries through operator and credit card billing.” — Uday Reddy, Chairman & Managing Director, Tanla Solutions
At the VentureWire Technology Showcase in Redwood City, California today, Nokia (NYSE: NOK) Executive Vice President and Chief Development Officer Mary McDowell, openly said that the company’s internal investment group called “Nokia Growth Partners” is looking to pour some money into companies that are working on “payments and transactions, analytics and advertising, gaming and virtual worlds”. Nokia Growth Partners has around $350 million in the bank, and they recently invested $35 million into Obopay, who is handling Nokia Money, and an undisclosed sum in both Zvents, a local event search engine, and KongZhong, a Chinese mobile internet company. “We tend to look for companies that have success in the fixed Internet world and are moving to mobile, though we’re always interested in mobile ideas” McDowell said, further adding “also those with traction in the U.S. who are looking to make a move to global markets. We can help facilitate that.”
Judging by Nokia’s past history of acquisitions, it seems like any company that gets swallowed into the belly of the beast gets thrown out into the dark, brutal Finnish winter to die a slow and painful death. Many of the cofounders of the companies that Nokia has purchased have already left, taking their payout and cashing their chips. What’s to stop this from happening in the future?
While I wasn’t at Nokia (NYSE: NOK) World 2009 this year, I did live in front of my laptop last Wednesday and Thursday, hitting the refresh button in my browser repeatedly, and gathering information from as many resources as I could find on the internet to mash it all up into the “IntoMobile’s Official Nokia World 2009 Coverage Blog Post“. Now that I’ve had a weekend to chat with some friends about Nokia World, play with a Nokia N900 at the Nokia Flagship Store in Helsinki, and lay in bed collecting my thoughts, I’ve got to say that I’m a bit disappointed.
Nokia (NYSE: NOK) is trying to get into the mobile transactions space with Nokia Money. The service looks to be as simple to use as sending an SMS to a friend. I don’t know about you, but I loathe carrying around cash. Credit cards and debit cards are nice, but signing a piece of paper or entering a 4 digit pin in a machine just seems a bit dated. Having a device that can handle transactions with you all the time opens the possibility for a huge amount of commerce between a much larger, and more diverse, set of players. I’ll shut up now since I know this is going to be slow to take off, and probably isn’t going to become mainstream for at least another 5 years. That being said, I hope one day we look back at money and shake our heads at how stupid we used to be, much like Captain Kirk and Spock did when trying to get on a bus in Star Trek IV: The Voyage Home.
IntoMobile could not make it to Nokia (NYSE: NOK) World this year, so instead I’ll be aggregating all the material that comes out of the show in to one blog post. It makes things easier for you, it makes things easier for us, and not being on the show floor struggling to find a decent connection is going to be highly advantageous. I’ve also taken the liberty of stickying this blog post so it will be at the top of IntoMobile from now until the end of Nokia World.
Everything you need to know, right after the jump.
Nokia (NYSE: NOK) just announced “Nokia Money” which will be shown off next week at Nokia World. We told you about the Nokia Money trademark a little over a month ago, and it looks like the service is going to launch some time early next year. Similar to how Nokia purchased Twango and rebranded it Ovi Share, Nokia is going to be built on top of Obopay’s mobile payment platform. More details will be revealed next week and it can not be stated enough how important this is at helping Nokia remain relevant going forward. In my open letter to Nokia earlier this month, I told them to become a bank. I hope this is the first of many steps in achieving that transformation.
Note: Obopay only works in the United States and India at the moment. Nokia also invested roughly $70 million into Obopay in March of this year. Current Obopay users pay $0.25 to send any amount of money, up to $1000. Receiving a payment is free.
Full press release after the jump, with relevant information made bold.
Yesterday I posted an interview with Carol Realini from Obopay. Now she’s on stage discussing mobile payments industry players and how they are in a unique position to benefit from a global approach to industry developments. She talked about financial services, wireless and service providers and how they all need to work together to build a sustainable ecosystem that will propel the industry at a global level.
The recap from her speech:
First she introducing Obopay, mentioning their deal with MasterCard, and investment from Nokia (NYSE: NOK).
According to Carol, the success will require three things: a holistic approach, strategic partners, and new payment flows.
Obopay wants to serve all market segments – unbanked, under-banked and banked users in all markets. She mentioned an U.S. example where according to some research there are 30 million families that are considered ubanked or under-banked — i.e. underserved and over-charged.
Obopay’s philosophy is “Value is in the network.”
Then she discussed how different user groups require different services: banked want flexible access, under-banked need full access, and un-banked pre-paid money services.
Because they want to work with all kinds of users, Obopay’s platform is designed to work in various regulatory environments: highly regulated (restricted) such as India, regulated such as U.S. and the EU, as well as innovative markets like Kenya, where telcos are allowed to perform some business banks usually do.
In that sense, Obopay works with different stakeholders – carriers, banks, merchants, associations, and consumers to reach its goal of offering a cross-carrier and cross-bank service.
However, when they enter a new market they pick a key/anchor bank and carrier. In the U.S. that was Verizon (NYSE: VZ) Wireless and Citibank. Now they’re also co-operating with AT&T (NYSE: T).
Finally, she mentioned Obopay’s plans to support all mobile platforms and even extend to social networks.
And that’s all I caught from Carol this time. I’ll be leaving Fira shortly…
