By Digantam Gurung CCS Insight

It’s been a year since Nokia Money was introduced at Nokia World 2009. The service, which works in partnership with Obopay, lets ordinary mobile phone users make payments through SMS messaging. Nokia’s target audience is primarily people in rural areas of developing countries that may not have easy access to financial services or even have a bank account.

This year, Nokia Money was again featured at Nokia World along with a number of interesting presentations and round-table discussions about Nokia’s ideas for emerging markets. Among these were Nokia Life Tools, which provides services on education, agriculture and entertainment. Guest speakers at the event included representatives from charities and banks, including Action Aid and Deutsche Bank.

Considering that emerging markets (most notably India and China) offer such enormous opportunities for global expansion, it’s no surprise that Nokia wants to cater for this audience. But I was more impressed with the benefits for users of Nokia Money and the acknowledgement that advanced mobile technology can really help improve people’s lives. Nokia’s attempt to tackle such serious issues, beyond usual entertainment services like music and games, highlights a genuine interest for the welfare of the consumer that you wouldn’t perhaps see from other mobile manufacturers.

Nokia’s strength in so many markets and distribution channels certainly puts it in a strong position to implement a mobile payment scheme. The global coverage of Ovi Store and Maps, in comparison to the Apple and Android app stores, shows the groundwork that already exists. Nokia claims that Ovi Store is available in 180 countries.

However, while I admire the thinking behind Nokia Money, I wonder what level of investment Nokia is prepared to make in the long run. Attempting to encourage rural mobile phone users in developing countries to adopt mobile financial services will require not only grassroots education, but also wider development of the financial infrastructure. How easy will this be for people that are only used to dealing with cash? Most importantly, the way people handle money is usually based on existing cultural and social norms. Certain customs might hinder Nokia Money from reaching those that could really benefit from it — for example, women.

So far Nokia Money has been piloted with Yes Bank in Pune, India. But there is still a long way to go before widespread deployment. If successful, it could be a triumph of gigantic proportions.

CCS Insight provides market information, analysis and intelligence for companies focusing on the mobile and wireless sector around the world.
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