Nokia, recognizing that a huge disparity exists between the number of individuals who have mobile phones and the number who have bank accounts, has launched a new mobile financial service called Nokia Money. The new service will let users send and receive money, pay bills and manage money with just a phone number.
On its surface Nokia Money sounds very similar to PayPal, but the service is expected to offer deeper money management abilities from a cell phone. One of the core reasons that Nokia developed the service, which will work with most mobile phones, was to extend financial services to millions of individuals who do not have bank accounts.
Mary McDowell, EVP and Chief Development Officer for Nokia specifically pointed to the fact that, "many mobile phone users have very limited or no access to basic financial services. With more than four billion mobile phone users and only 1.6 billion bank accounts, global demand for access to financial services presents a strong opportunity to combine mobile devices with simple but powerful financial services such as Nokia Money."
More details about Nokia Money will be available in September at Nokia World, but it was announced that people will be able to start using the service to send and receive money in early 2010. We do know Nokia Money is based on Obopay, which has been operating in the U.S. for several years.
The Obopay service received a "very good" rating from CNET, which praised its operability with most phones and overall ease of use. The biggest drawback that the CNET reviewer found was the fees levied for loading money to the account. Hopefully Nokia will be able to offer lower transaction fees in order to provide a greater benefit to the non-banking customers it is targeting.
Access to banking tools such as Nokia Money are incredibly important for low income individuals who, in the absence of banks, rely on check cashing and bill paying locations, whose fees eat into their ability to save money. One report from January 2008 indicated that if the average non banking customer stopped paying to cash checks, he could save $360,000 over his lifetime in pre-tax money.
In addition to the fee-saving benefit, the access to banking tools is a fundamental step in getting one's personal finances in order and moving out of a paycheck to paycheck cycle.
Nokia launches payment service for mobile phones