NEW DELHI/PUNE: Finnish handset maker Nokia is axing its financial services in India, and has quashed plans of extending this facility to other markets, as the handset maker sharpens its focus on devices and location-based services.
Nokia said its 100,000-plus customers in India who use this facility will be given 'ample time' to exhaust their accounts, shut out or shift to other players that offer similar facilities.
The Nokia Money platform allowed users with or without bank accounts to pay bills and retailers, send money through their mobile phones.
The handset maker will stay invested in Obopay, the company that provides the technology platform for this facility, but will withdraw from directly offering mobile wallet service to consumers, as part of a planned exit from the mobile financial services, a non-core business, the handset maker said.
Nokia had used Obopay's technology to launch this service in 2010 and had reportedly invested around $70 million in the company. "The mobile handset market needs financial services and now there are off-the-shelf services available in the market. We will continue to support them as a handset maker. We have led the creation of mobile money industry in India. We are getting out as a first party provider, but we will continue to support mobile money as feature," Nokia Mobile Payments general manager Gary Singh told ET.
Nokia will support separation of the 100-strong team, including management staff, and will absorb some employees. "All our staff have been incubators of the mobile money service in India. Financial services market is growing in India, and so their experience will be valuable for other companies. We will absorb as many as possible in the parent company, and also assist others to find employment with our partners and other players in mobile money," Singh added.
Nokia will provide complete support to all customers till they exhaust their balance on the mobile wallet and will not levy any transaction charges. The handset maker will also reimburse the registration fee of 30 to each customer. Customers of Nokia Money will start receiving updates from March 15 on how should they proceed with their accounts.
Union Bank Money and Yes Bank Money will continue to operate as such and Nokia will help the banks make the service self-supporting. RBI rules do not allow transfer of accounts, but Nokia will support customers and assist them in getting enrolled with other mobile money providers should they wish to continue using mobile money service.
"Our services will continue to operate while we work with our banking, market and technology partners as well as our employees, agents and others to plan future options in accordance with all customer and regulatory requirements," Nokia said in a statement on Monday.
The move comes at a time when the government is considering completely opening up the financial payments services sector to foreign investors. The Reserve Bank of India has conditionally allowed a finance ministry's proposal to allow 100% foreign direct investment through the automatic route in mobile wallet or e-wallet services.
There is a growing interest in the sector with at least three new mobile payment services introduced by Airtel, HDFC, MasterCard and Visa over the last month. Nokia will also extend its global bridge programme designed to help employees to pursue higher education or invest in viable business plan of employees. It had conducted a similar exercise when it outsourced the maintenance and future development Symbian mobile platform to Accenture.
Mobile money in its simplest form is using the mobile phone for making payments and transfers, instead of paying by cash. It is safer than cash as it cannot be stolen, and even if the phone is lost, the stored value remains at the backend with the bank.
While it became a success in countries such as Kenya and the Philippines, it has yet to take off in India. Nokia Money had aimed to convert the handset maker's retail outlets into cash points and the company planned to use its extensive infrastructure in India to reach out to the unbanked population.
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