After years of collaboration with mobile payment solutions provider Obopay, mobile phone maker Nokia is in the process of acquiring Obopay India, a wholly owned subsidiary of Obopay. In March 2009, Nokia acquired 38% stake in California-based Obopay for an undisclosed amount which global media reports pegged at $70 million.
So far, Obopay (the global parent) has raised a total of $137 million from Elephant Capital, Alliance Bernstein, Essar Telecom USA Limited, ONSET Ventures, Qualcomm, Redpoint Ventures, Richmond Management, and Wolfensohn & Company, L.L.C and Nokia.
Obopay entered India in January 2008 and has two offices in Bangalore and Mumbai. The firm used the earlier funding from Nokia to further its technology development and add new services. Inside sources at Obopay have confirmed to VCCircle that the deal between Nokia and Obopay India is in process.
“We run an independent operation across the country, have our own operations in four countries and are taking it to more now. Nokia is our partner,” Obopay’s spokeserson told VCCircle. On a pointed question if Nokia was taking over Obopay India operations, he refused to comment.
When contacted, Nokia India said, “As a policy, Nokia does not comment on speculation.”
In India, Nokia’s long term partnerships have given Obopay a leg up in the business. Nokia partnered with private sector bank Yes Bank to launch Mobile Money Service, which enables transfer of money to individuals, payment of utility bills and recharge of prepaid SIM cards (top-ups). The SMS-based service is being delivered by the Obopay platform over Nokia S40 and S60 handsets. It was launched in Pune in February as a pilot and then in Chandigarh as a commercial service. Yes Bank, when contacted, declined to share the number of subscribers to the service.
More recently, Nokia and Obopay partnered with the state-run Union Bank of India to launch financial services through mobile phones for users and businesses. The service, named Union Bank Money, was launched in November. So far, Obopay has partnered with Yes Bank, Aircel, Tata Indicom, Loop Mobile, Tagit and Grameen Solutions in India.
Nokia’s understanding of the complex Indian mobile ecosystem and its existing tie ups with bank, mobile operators and merchants will help Obopay ramp up fast in India. Obopay will also be able to piggy-back on Nokia’s wide distribution network – the manufacturer has 200,000
retail stores across the country which double up as Nokia Money agents or bank business correspondents, allowing users to withdraw and deposit cash from their bank accounts. The Obopay service will also be expanded to allow users to directly pay merchants for goods and services using the mobile.
Other companies offering mobile payment services include eBay’s PayPal Mobile, Itz Cash Card, One97 Communication’s PayTM, JiGrahak Mobility Solutions’ NGPay and MChek, backed by Draper Fisher Jurvetson.