Nokia Gets Into Mobile Banking

One of the biggest areas of untapped potential for mobile phones to change the developing world and improve the lives of billions of people is in mBanking.  As Tom Kalil wrote in a 2008 paper published by NDN affiliate the New Policy Institute:

mBankingNearly three billion poor people in developing countries lack access to basic financial services such as savings, credit, insurance, and money transfers. As CGAP (Consultative Group to Assist the Poor) notes, “Access to financial services enables the poor to build their own path out of poverty …. When poor people have access to financial services, they invest in assets such as sending their children to school, buying medicines and more nutritious foods, fixing a leaky roof, or building income-earning potential by investing in their own enterprises.”...

Mobile technology has the potential to expand the reach of financial services to the poor. Branchless banking using mobile phones and a network of third-party agents (e.g. post offices, small retailers) can reduce the two biggest costs associated with providing financial services: building and maintaining a physical presence, and handling small transactions.

He goes on to describe M-PESA, one of the more successful mBanking services, based in Kenya and born of a partnership between the Vodaphone Group and DFID (the British development agency).

Well, there will soon be another option for would-be mBankers around the world--  Nokia announced today that it would begin offering mBanking services starting next year.  The move (announced in a press release, reported by TechCrunch, Appfrica, & the FT), is part of Nokia's expansion beyond handset manufacturing to services.

The press release points out that, while there are only 1.6 billion bank accounts in the world, there are 4 billion mobile phones, and turning those handsets into financial tools will give billions financial power they currently lack. From the release:

Nokia Money has been designed to be as simple and convenient as making a voice call or sending an SMS. It will enable consumers to send money to another person just by using the person's mobile phone number, as well as to pay merchants for goods and services, pay their utility bills, or recharge their prepaid SIM cards (SIM top-up). The services can be accessed 24 hours a day from anywhere, meaning savings in travel costs and time.

Many of the details aren't yet clear-- Will the service operate independent of local carriers?  Will it be fee-based? how interoperable will it be with other mBanking platforms?  Still, given Nokia's heavyweight status among handset makers and name-recognition, this is one of the biggest steps forward in mBanking that we've seen to date.