Where technology meets anthropology, conservation and development
Random header image... Refresh for more!

Nokia: Banking on financial services

Last November, on the day Barack Obama won the US Presidential elections, Nokia quietly lay their cards on the table and entered the ‘international development’ arena. The launch of Nokia Life Tools – initially a suite of education and agriculture-based tools aimed at the Indian market – was a significant step forward for the handset maker, which had for some time been positioning itself not just as a manufacturer, but also as something of a services provider. Early signs of any shift would have come as little surprise to those who know the history of the company. Nokia are masters of re-invention.

So, something else which shouldn’t have come as a big surprise was today’s news of Nokia’s big move into mobile financial services. There’s clearly a big market opportunity here, and Nokia have partnered with Obopay to take it on (a company they had already invested around $70 million in earlier this year). According to Nokia:

Nokia Money has been designed to be as simple and convenient as making a voice call or sending an SMS. It 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 (SIM top-up). The services can be accessed 24 hours a day from anywhere, meaning savings in travel costs and time. Nokia is building a wide network of Nokia Money agents, where consumers can deposit money in or withdraw cash from their accounts

Image courtesy kiwanja.net Mobile Gallery

Although on the surface the new service may sound a little M-Pesa-esque, there appear to be some crucial differences. Details remain a little sketchy, but Nokia Money appears to be operator-independent, meaning mobile owners on any network can send or receive payments to anyone else on any other network. This would be a direct challenge to many existing models which require users to switch networks, or to be on the same network as the mobile service they’re looking to use. In addition, it looks like Nokia Money users can sign-up without needing to swap out their SIM cards, making up-take of the service considerably more efficient logistically. If this thing were to grow, it could grow fast.

We may not know all the details quite yet – Nokia will reveal more at Nokia World next week – but it is safe to say that this could be pretty disruptive. Last year, during the Life Tools launch, I wrote:

It’s the addition of Nokia Life Tools – agricultural and educational services – which raises eyebrows almost as much as it raises the bar. How will Nokia’s move into providing agricultural data and advice to farmers effect, for example, the operations of Trade At Hand, DrumNet, Manobi or TradeNet? Will they be partners in any Africa-wide venture? (Nokia do seem to be developing a habit of going-it-alone – more recently with their release of Nokia Data Gathering – rather than working with established, existing open source tools)

Image from kiwanja.net Mobile GalleryAlready the most active handset manufacturer in the developing world, today’s announcement well-and-truly places Nokia at the heart of the international development effort. As if (very) successfully designing and building low-cost handsets for emerging markets wasn’t enough, Nokia continue to increase their offering of emerging market-specific services through their low-cost phones. Last year it was agriculture and education. Today it’s financial services.

I’ve never been one for predictions, but this one has certainly come true. Again, writing last November:

So, what next? Nokia develop a mobile payments platform and embed the client into all of their emerging market handsets? Imagine, a single company controlling the entire mobile technology value chain would make interesting viewing. It could well be the answer to the age old fragmentation problems suffered by the “social mobile” and ICT4D space, but would this give the Finnish giant Google-esque powers?

So, should we be getting worried yet? At best, billions of the financially excluded finally get given a chance to enter the financial services market. At worst, M-Pesa’s monopoly in Kenya ends up looking like a minor distraction. Nokia really have taken this to a whole new level. Regulators, on your marks…

33 comments

1 Nokia: Banking on financial services | Build it Kenny, and they … Google gold financial { 08.26.09 at 4:44 pm }

[...] Read more: Nokia: Banking on financial services | Build it Kenny, and they … [...]

2 Nokia: Banking on financial services | Build it Kenny, and they … | Money Blog : 10 Dollars : Money Articles. { 08.26.09 at 6:23 pm }

[...] Read more: Nokia: Banking on financial services | Build it Kenny, and they … [...]

3 Jack Burge { 08.26.09 at 7:52 pm }

Good insight, and always good when a prediction comes off!! I certainly think it’s very interesting what’s happening here, yet unlike with Google people do seem a lot less concerned. Like you, I’m thinking we should be

4 BUSINESS FINANCE » Blog Archive » Nokia: Banking on financial services | Build it Kenny, and they … { 08.26.09 at 7:52 pm }

[...] Read a strange here: Nokia: Banking upon monetary services | Build it Kenny, as well as they … [...]

5 reallyrichard (Richard Adler) { 08.26.09 at 9:20 pm }

RT @kiwanja – Nokia launching “Nokia Money” – virtual currency that can be sent from any cell phone to any other. http://tinyurl.com/nbd7c9

6 kiwanja { 08.27.09 at 7:44 am }

@Jack – I wouldn’t say that I was worried, but I do think it’s “interesting” the way this is going. Nokia are in a unique position in that each time they launch a new emerging-market service they have an instant market of billions. While some ICT4D projects can take months or years to get traction, something like Nokia Money could get there in weeks

7 Tear down that (mobile garden) wall « Crossing the Streams { 08.27.09 at 7:59 am }

[...] Banks of kiwanja.net notes that this challenges the exclusivity many African m-banking operators enjoy, but may lock customers into a handset rather than a [...]

8 Tim Terpstra { 08.27.09 at 10:04 am }

RT @kiwanja: Nokia: connecting people or building monopolies? "Nokia Money" set to take on the mobile payments industry. http://is.gd/2BdEZ

9 Twitted by ttim { 08.27.09 at 10:10 am }

[...] This post was Twitted by ttim [...]

10 Ruben Harris { 08.27.09 at 11:36 am }

Nice post on Nokia’s move into mobile financial services – http://bit.ly/39xirI

11 redstarvip { 08.27.09 at 11:36 am }

Nice post on Nokia’s move into mobile financial services – http://bit.ly/39xirI

12 William Easterly { 08.27.09 at 11:47 am }

RT @redstarvip: Nice post on Nokia’s move into mobile financial services – http://bit.ly/39xirI

13 bill easterly { 08.27.09 at 11:47 am }

RT @redstarvip: Nice post on Nokia’s move into mobile financial services – http://bit.ly/39xirI

14 Lars Hasselblad Torr { 08.27.09 at 12:13 pm }

@kiwanja nice summary of Nokia’s ongoing shift from manufacture to development and financial services with Nokia Money http://bit.ly/svPOJ

15 lhtorres { 08.27.09 at 12:13 pm }

@kiwanja nice summary of Nokia’s ongoing shift from manufacture to development and financial services with Nokia Money http://bit.ly/svPOJ

16 Putting people first » Nokia’s new mobile money { 08.27.09 at 12:51 pm }

[...] Kiwanja/Ken Banks: “Details remain a little sketchy, but Nokia Money appears to be operator-independent, meaning mobile owners on any network can send or receive payments to anyone else on any other network. This would be a direct challenge to many existing models which require users to switch networks, or to be on the same network as the mobile service they’re looking to use. In addition, it looks like Nokia Money users can sign-up without needing to swap out their SIM cards, making up-take of the service considerably more efficient logistically. If this thing were to grow, it could grow fast.” [...]

17 melvin gibbs { 08.27.09 at 1:26 pm }

Nokia’s move into financial services disrupts the banking industry (via @redstarvip )http://bit.ly/39xirI

18 melvingibbs { 08.27.09 at 1:26 pm }

Nokia’s move into financial services disrupts the banking industry (via @redstarvip )http://bit.ly/39xirI

19 melvin gibbs { 08.27.09 at 1:26 pm }

Nokia's move into financial services disrupts the banking industry (via @redstarvip ) http://bit.ly/39xirI

20 melvin gibbs { 08.27.09 at 1:26 pm }

Nokia’s move into financial services disrupts the banking industry (via @redstarvip ) http://bit.ly/39xirI

21 melvingibbs { 08.27.09 at 1:26 pm }

Nokia's move into financial services disrupts the banking industry (via @redstarvip ) http://bit.ly/39xirI

22 BlackoutINK { 08.27.09 at 1:49 pm }

RT @redstarvip: Nice post on Nokia’s move into mobile financial services – http://bit.ly/39xirI

23 blackoutink { 08.27.09 at 1:49 pm }

RT @redstarvip: Nice post on Nokia’s move into mobile financial services – http://bit.ly/39xirI

24 Hillmer Reyes { 08.27.09 at 4:00 pm }

RT @whiteafrican:Nice post on Nokia’s move into mobile financial services: http://bit.ly/39xirI (by @kiwanja)

25 reyeshh { 08.27.09 at 4:00 pm }

RT @whiteafrican:Nice post on Nokia’s move into mobile financial services: http://bit.ly/39xirI (by @kiwanja)

26 links for 2009-08-27 « Design in Africa { 08.27.09 at 4:05 pm }

[...] Nokia: Banking on financial services | Build it Kenny, and they will come… (tags: nokia nokia_strategy bop_money) [...]

27 Twitter Trackbacks for Nokia: Banking on financial services | Build it Kenny, and they will come... [kiwanja.net] on Topsy.com { 08.28.09 at 2:14 am }

[...] link is being shared on Twitter right now. @kiwanja, an influential author, said Handset manufacturer, [...]

28 Marco Puccia : Business and Development (Reposted) { 08.28.09 at 9:33 am }

[...] throughout BOP markets positions itself well to quickly become a leader in the mobile money market. Here’s a post on the topic written by mobile entrepreneur Ken [...]

29 Pablarribas Radar { 08.29.09 at 2:55 am }

dlcsubs Nokia: Banking on financial services | Build it Kenny, and they will come…: Nokia quietly lay t.. http://bit.ly/X9LQW

30 pablarradar { 08.29.09 at 2:55 am }

dlcsubs Nokia: Banking on financial services | Build it Kenny, and they will come…: Nokia quietly lay t.. http://bit.ly/X9LQW

31 Amy Carol Wolff { 08.31.09 at 6:30 pm }

Check out this link re: Nokia’s p2p $ sending tech. #mifimon. http://bit.ly/svPOJ would it work in Ghana? @ibl @rarenaud

32 amycarolwolff { 08.31.09 at 6:30 pm }

Check out this link re: Nokia’s p2p $ sending tech. #mifimon. http://bit.ly/svPOJ would it work in Ghana? @ibl @rarenaud

33 Talking about what counts – Nokia Conversations : the official Nokia blog { 10.18.13 at 2:12 pm }

[...] Banks, a leader in builiding and promoting voice and SMS services in emerging markets, wrote a thoughtful piece on Nokia Money. Also, the nice people at Experientia have a great round up of quotes from those who [...]

Leave a Comment