Finnish handset maker Nokia has decided to exit mobile money business, two years after it launched the service in India. The move is in line with the company's global strategy to move out of non-core areas.
Nokia had launched mobile money in 2010 through a partnership with YES Bank. Subsequently, it signed up with Union Bank to offer services such as bill payments and money transfer.
It had also launched the service independently under the Nokia Money brand which has about 2 lakh subscribers. In total, there are about 1.2 million subscribers using the Nokia service across all three platforms. Apart from India, Nokia had launched the service, based on Obopay's mobile payment platform, in other countries, including Pakistan.
The immediate impact will be on the two lakh Nokia Money subscribers. According to sources, information to these subscribers to use up the money deposited in the mobile money account will be sent starting March 15.
Nokia will continue the service for 3-4 months to give enough time for subscribers to use up the money.
Registration fee
In addition, the handset maker will offer to refund the registration fee collected from the subscribers. It will also approach the Reserve Bank of India to surrender the licence it took for launching the service.
Subscribers using the YES Bank and Union Bank services may not be affected as the two banks may take over the platform. Nokia is looking to bring in another player to help the two banks sustain the payment service.
Nokia directly employs about 100 people for this business, some of whom may be absorbed by the company. When contacted, Nokia declined to comment but one of its partners confirmed the development.
This comes even as mobile payment is gaining currency in India and in other parts of the world. There have been at least three new launches of mobile payment services over the past month by different players, including Airtel, HDFC, MasterCard and Visa.
According to Tavess Research, mobile money in emerging markets of the Middle East, Asia, and Africa is expected to cross 1 billion users by 2015, with India accounting for over 100 million subscribers.