Mobile money is generating the biggest buzz in India with players like Airtel, HDFC and Times Group diving headlong into it. The trend is quite young in India and is destined to be big this year. Although, the trend is hot, we have heard that Nokia is going to shut down its mobile money services in India.
Nokia, the Finnish phone giant and the market leader in India for many years started its mobile money initiative in partnership with YES bank in 2010. It also added Union Bank to its services subsequently. Besides these tie-ups, Nokia also carried out its services under the Nokia Money brand and had over 2 lakh subscribers. The service was based on Obopay’s mobile money model which was being followed in countries like Pakistan. Nokia has undergone a massive strategy change in terms of its business and is now seeking to shut down ‘non-core’ businesses. This means that the Finnish company will solely be focusing on its phone business which is pretty apparent looking at the stress that the company is putting into its Lumia series of phones which come equipped with the Windows Phone 7 OS from Microsoft.
Nokia has been witness to its market share being eaten by companies like Samsung and Micromax and has found it necessary to exit all other businesses and focus on its flagship phone business. The exit of Nokia’s mobile money services will mean the disruption of service to almost 1.2 million customers. Nokia has said that it will be allowing the service to continue for 3-4 months so that subscribers can find a way to transition. Union bank and Yes Bank may run the service using their own platforms. Nokia has already applied to the Reserve bank of India for the cancellation of its mobile money license.
Nokia maybe exiting the business but guess who is gearing up to enter the mobile payment field in India? Google of course! They have been tight-lipped about bringing their wallet service to India but as things are shaping up it seems certain that Google will bring Google Wallet to India soon enough. The Internet giant has made it mandatory for Android app developers to integrate their apps with its Google Wallet service as opposed to other services like PayPal, Boku and Zong which developers could use earlier. The problem with this move is that Google charges more for every transaction compared to these other services and thus brings the profitability of an Android app down.
From a user’s point of view, Google Wallet makes perfect sense since its is a central place where you can update all your card and banking details thus transforming your mobile into a veritable wallet of sorts. If the developers do not shift to this new mode of payment, then their apps stand liable to be suspended from the Android Market which has been re-branded worldwide to Google Play. Google Checkout is now part of Google Wallet and Android app users can already use Google Wallet to buy apps on Google Play. Google Wallet is also NFC ready and it could be interesting if payments via NFC could be deployed in India. NFC has gained a lot of traction in the US with mobile payment firm Square getting up to 1 million merchants to use its services.
Mobile Money is here to stay and the faster it gets adopted, the better it will be for the consumer.
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