By Marguerite Reardon, 25 March 2009 15:52
NEWS
Nokia, the world's largest mobile maker, likes the idea of turning your mobile into a credit card - and it's putting its money where its mouth is.
On Wednesday the company announced it has bought a minority stake in Obopay, a mobile payment company that allows people to pay for things using their mobile phones.
Mobile banking services are expected to be big over the next few years, especially in the developing world where they can allow individuals without bank accounts to transfer money and make purchases without cash.
Research firm Berg Insight expects people using mobile financial services is expected to grow on average 89 per cent per year to 913 million in 2014 from just 20 million last year.
The amount of Nokia's investment in Obopay hasn't been disclosed, although the Associated Press has reported that the company is using its corporate funds and not its venture arm to fund the investment. The news agency also points out that Nokia made a regulatory filing this month for the sale of up to $70m in preferred stock. The filing also said Nokia's head of corporate business development, Teppo Paavolo, would get a seat on Obopay's board.
Nokia has been a big believer in using phones as credit cards or wallets. The company has used near field communications technology to allow some phones to be swiped at cash registers and subway turnstiles to pay for things, but this is the first time the company has invested in an payment service such as Obopay.
There are also competing payment services, like eBay's PayPal Mobile. Previously Obopay had raised about $69m in funding mostly from venture capital firms. However, mobile chip maker Qualcomm led the company's $7m round of funding in 2006.
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