Nokia is announcing today it plans to shut down its mobile payments service known as Nokia Money in India, as a part of a shift in strategy that will allow the company to more narrowly focus on its handset business and related location-based services offerings. According to a company spokesperson, “the mobile financial services business is not core to Nokia, so we plan to exit the business.”
Nokia Money was available in India, and had previously been expected to roll out to other emerging markets.
The news, reported by Reuters this morning, notes that Nokia Money only became available across all of India by late last year, but had been on track for further expansion.
For those unfamiliar, Nokia Money was first announced back in August 2009 as a service that allowed users to send money to friends, merchants, and service companies simply by using their phone numbers. It was later showcased in early September at the Nokia World conference, and then began to roll out to regional markets in 2010.
The service was powered by Obopay, a company Nokia was the lead investor in, when it raised a $70 million round in spring 2009. Unlike the new efforts to turn smartphones into digital wallets here in the U.S., Nokia Money was after feature phone users in emerging markets, where many have pre-paid SIM cards but not bank accounts. The service allowed the “unbanked,” and especially those users in rural regions, an alternative means to pay for goods and services besides using cash.
More recently, the mobile payments market has been seeing increasing interest from credit card companies, mobile operators, and even technology companies like Google (with its Google Wallet) and PayPal, all of which believe that mobile payments could potentially be a big business in the future as consumers move away from cash and smartphones become more prevalent. In fact, there are now 130 deployments of mobile money services worldwide, according to the GSMA, and 93 more in the works.
The exit from the mobile payments business is a reflection of Nokia’s new efforts under CEO Stephen Elop to hold onto its position as a leading handset provider in a world that’s been rapidly shifting to smartphones, and in particular iPhone and Android devices. Nokia partnered with Microsoft, killing off its own Symbian smartphone OS, and is now the top Windows Phone vendor in the world. However, it’s so early in the race, it’s still unclear that Windows Phone will even be able to establish itself as a third ecosystem in terms of mobile operating systems. It’s an effort that requires Nokia’s full attention, and financial services were likely a large distraction from that battle.
Nokia Money isn’t the only service to have received the axe in recent days. The company also announced earlier this month it was closing up its Ovi Share service, a web service where Nokia hosted users’ content online. So far, Nokia Life, the company’s suite of information services for emerging markets covering agricultural, healthcare, educational and entertainment offerings, has been spared.