Nokia breaks into banking

The world’s leading mobile handset manufacturer, Finland’s Nokia, announced a move into financial services on Wednesday. The new direction for Nokia will see it working with mobile payment specialist Obopay, in which Nokia invested $70m in March this year.

Nokia looks to be targeting emerging markets with its Nokia Money service, with the firm predicting that, for many prospective users, it will be the first experience of financial services. While there are four billion mobile phones in the world, Nokia said, there are only 1.6 billion bank accounts, creating a large potential market for basic financial services.

“We believe mobile financial services offer a market opportunity with long term growth potential,” said Mary McDowell, chief development officer at Nokia. “In many countries, mobile phone ownership significantly exceeds bank account usage, suggesting that many mobile phone users have very limited or no access to basic financial services. Global demand for access to financial services presents a strong opportunity to combine mobile devices with simple but powerful financial services,” she added.

The new suite of services will enable consumers to send money to another person just by using the person’s mobile phone number, as well as to pay merchants for goods and services, pay their utility bills, or recharge their prepaid SIM cards, Nokia said. The firm is creating a network of Nokia Money agents, where users will be able to deposit and withdraw cash from their accounts.

“To be successful Nokia must provide a legitimate bridge between operators, banks networks and security infrastructure in order to unlock the broad uptake of mobile financial services,” said Bob Egan, global head of research and chief analyst at Towergroup.

The service will be debuted at Nokia World next week and commercial deployment is scheduled for 2010.