By investing in Obopay, Nokia is betting that mobile money services will take off, particularly in emerging markets where it's hard to access banks or credit.
Nokia made a large investment in the mobile payment company Obopay on Wednesday.
While the terms of the investment were not made public, The Associated Press noted that the company made a regulatory filing this month for sale of up to $70 million in preferred stock. The filing also said Teppo Paavolo, Nokia's head of corporate business development, will get a seat on Obopay's board of directors.
Obopay is a mobile payment service in India and the United States that enables users to send money to others via text messages or through applications. The accounts can be tied to a bank account, or funds can be put into an Obopay account if users don't have access to banks.
The company has raised about $69 million in venture capital, and Nokia's backing could be a big boost as it faces increased competition from the likes of eBay's PayPal Mobile and mobile offerings from MasterCard and Visa.
"This investment is a landmark in the evolution of mobile payments. It underscores the global potential of mobile money by providing convenient access to money anytime, anywhere," Obopay CEO Carol Realini said in a statement. "Given Nokia's position as the leader in mobile communications, we could not have asked for a better investor."
Nokia sees enormous potential in mobile payment, particularly in emerging markets where financial institutions may be sparse. The cell phone manufacturer has released a cell phone that utilizes Near Field Communication technology to let customers use the handset as a contactless form of payment. But recent reports suggest that NFC has failed so far, and the growth in the mobile money market is being driven by services like Obopay.
InformationWeek Analytics has published an independent analysis of the challenges around setting business priorities for next-gen Web applications. Download the report here (registration required).
Building A Mobile Business MindsetAmong 688 respondents, 46% have deployed mobile apps, with an additional 24% planning to in the next year. Soon all apps will look like mobile apps – and it's past time for those with no plans to get cracking.
Top IT Trends to Watch in Financial ServicesIT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.
Join us for a roundup of the top stories on InformationWeek.com for the week of September 25, 2016. We'll be talking with the InformationWeek.com editors and correspondents who brought you the top stories of the week to get the "story behind the story."