14 DAY TRIAL // Giant Finnish mobile phone maker Nokia is reported to be making moves in the direction of transforming handsets into credit cards. To be more precise, the company announced on Wednesday that it owned a small stake in Obopay, a company focused on mobile payments, allowing those who have Obopay accounts related to their mobile phones to pay for items.
Nokia hasn't announced the amount of shares that it owns in the Redwood City, California-based Obopay, yet Associated Press reports that the phone maker uses for the investment corporate money and not its venture arm. At the same time, it seems that the company made a regulatory filing this month for the sale of up to $70 million in preferred stock. According to the filing, Teppo Paavolo head of corporate business development at Nokia, will also have a place in Obopay's board.
As many of you might already know, mobile-banking services are expected to register a great boost in the following few years, and developing countries should see the highest growth rate, as there are many people who live in places that lack proper access to banks or credits. According to market researcher Berg Insight, the number of people who would be using mobile-banking services by 2014 should grow by around 90 percent, up to 913 million from the 20 million registered last year.
Nokia is one of the companies that sustained the usage of mobile phones as replacements for credit cards or wallets. The company already tested near-field communications technology that would allow handsets to be swiped at cash registers and subway turnstiles. Yet this is the first time when the company actually invests in a payment service like Obopay is.
Obopay previously managed to raise around $69 million in funding, most of the money coming from venture capital firms, yet, back in 2006, chip maker Qualcomm invested $7 million in the company.