Nokia had been expanding lately outside their core cell phone business which is facing an increased competition and lower profit margins and in these ‘hard’ times the company which makes 19 phones a second is looking for more profitable ventures and entering different areans from Music ( Nokia Music , Comes with Music ) , Video ( Nokia Video Store in OVI Store ) Netbooks ( Nokia Booklet 3G ) and of course Finance through Nokia Money .
Nokia Money is the latest offering by Nokia to bring Micro Banking system to the masses especially in the 3rd World and Developing countries like Pakistan , India and S.E Asia and most of Africa . In developing Money , Nokia has already spent big money , some 70 million dollars invested on a USA based outfit OBOPAY which specializes in micro payments .
Nokia’s target market for money are the people without bank accounts hence the Tagline in their PR , 4 billion phones – 1.6 billion bank accounts . The usage is made simple , a simple SMS , a phone call or an inbuilt application is all one need to connect their virtual account and send and receive payment s. Need actual money instead of virtual simply go to a Nokia Money Agent and claim it .
It’s not only about sending and receiving money , Nokia Money acts like a virtual bank so people can keep their savings save always handy and make payments for everything and anything from their phone as their wallet be it purchasing in a departmental store or paying that Rickshaw driver for the ride you have just taken .
Nokia’s target market , the developing countries , often the bread earner is not living near his family and Nokia Money provides a solution to instantly transmit the funds at the touch of a button , it’s safe , secure and lighting fast.
"Rural consumers will particularly benefit from money transfers and, for urban consumers used to online services, we are enabling services such as payment of utility bills, purchase of train and movie tickets, top-ups, all through their mobile phones. Nokia Money is simple to use, secure and available across different operator networks and on virtually any mobile phone. This means millions of new consumers will soon be able to manage all their financial needs from their mobile phone", said Teppo Paavola, VP and Head of Corporate Business Development, Nokia.
Nokia is targeting this market in Millions if not billions and the structure is already in place , notice the example Nokia has shown of Vinod an autorickshaw driver in Delhi. India is being targeted as the main market by Nokia as Obopay , Nokia’s backbone for Money already has a working system in place in India in cooperation with YES BANK , GRAMEED SOLUTIONS , AIRCEL , BPL and TATA INDICOM and used WAP , SMS and Application based access to the account .
Obopay has made the procedure very simply in India , but the existing system works through a bank account and a Mobile PON issued by the bank to use Obopay services so even if the phone is lost the money is safe J and with instant notifications of payment sent and received , misuse of the service is avoided .
Obopay is excited about this venture and Carol Realini, Founder and CEO of Obopay says “Obopay shares Nokia’s vision for bringing mobile financial services to millions of people worldwide. We’re excited that Nokia has chosen Obopay’s platform. Nokia’s leading market position, strong brand recognition and global distribution channel, using the Obopay platform with uniquely developed mobile elements, means the Nokia Money service is well positioned to bring the next generation of mobile payment services to the world,"
Till here everything seems so doable and easy , here comes the hard part Nokia and these are my thoughts
Nokia is planning to use Nokia Money as a micro bank , how it will overcome the hurdles with the State and Central Banks , to run the system effectively , Nokia has to partner up with a banking and or financial institution to easily manage the payment flow and also the regulatory affairs .
A solution could be that Nokia is planning to partner up with cellular company providers to market and spread the service , again what they will earn by using Nokia Money , added costs .
In Pakistan the Cellular companies are looking into financial institutions with Warid owned by AbuDhabi Group and Singtel having two banks in their portfolio , Telenor Pakistan has majority share in Tameer Microfinance bank and Mobilink’s parent company Orascom was interested in buying Royal Bank of Scotland’s Pakistan operations , so how Nokia will partner up with these institutions having their own ambitious plans to offer similar services .
The case may not be the same outside Pakistan but still Nokia has to think a possibility about it
In my opinion , Nokia has to partner up with a bank , there is no way they can get around the regulatory requirements and to handle the bulk of small payments by their anticipated customers .
So Nokia partners up with a bank and I as a user go to it preferably a Nokia Money Kiosk setup by bank preferably near my locality cause I’ll be very intimidated by a regular branch . I pay the agent Rs 1000 ( roughly USD 12 ) to deposit in my Nokia Money account which I have already setup with the Nokia Money agent or my Telco and have gotten a mPIN . The agent deposits the amount and I instantly get the confirmation on by sms on my phone .
What will be the interest of the financial institution involved other than they will be holding a larger chunk of money and getting to the masses .
The solution could be that I will not get the full Rs 1000 but Rs 980/- Rs 20 or 2 % deducted as service charges which can go upwards to 2.5 % for amount Rs 100 or below and downward to 1.5 % for amounts Rs 5000 and above .
So I got my Rs 980 in my account and had to top up my balance , so I use the option in the builtin App or if I have an older phone send a SMS for purchase along with my mPIN , authorizing purchase to a Nokia Money partner telco.
Will I as a consumer will feel comfortable in sending my mPIN as SMS
If educated well about the securities involved I may and the surety that in case of any mishap on fault of Nokia I’ll get my 100 % refund plus some compensation back .
So I got my top-up balance and the telco got their money for it minus 0.5 % as transaction fee.
Will the telco agree to the fee
Yeah they sure will , it will give them instant access to their customers and instead of paying commission to the shops they can sell the balance at a lower percentage .
My friend calls and asks for Rs 200 which I owe him , no problem , a simple SMS and the money is sent to his Nokia Money account but he will get it in full without any transaction fee as it’s intra system transfer .
My friend goes to a Nokia Money agent to get withdrawal of Rs 200/- he gets it minus 0.5% transaction fee .
Notice the fees in my hypothesis are small and are unnoticeable , they are so that the user do not feel getting ripped off and perceive it as a fair price for the transaction and with millions of transactions a day imagine the amount of money Nokia and it’s partners will make .
To make the service popular , Nokia and it’s partners can also start promotional schemes such as exclusive discounts and benefits for using Nokia Money like credit card companies do . Through SMS or through built-in App Nokia can also send it’s Money users financial information like Forex rates and Gold Rates on demand
If used and promoted effectively , Nokia Money may prove to be a useful services to the masses ,now only if Nokia will make it workable on Samsung and LG phones too
So what you think , if Nokia Money comes to your city will you use it ????
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