The mobile payments sector has received a noteworthy boost to its credibility following Nokia's decision to make a significant investment, thought to be around US$70 million, in the US-based mobile payments services provider Obopay.
The company, which presently only operates in the US and India, allows those signing up for its service to fund their account with cash or by linking up their credit card or current account. They can then send money to any text-message enabled cell phone. The company charges 25 cents to send any amount up to US$1,000 and nothing to receive it.
However, while Gartner recently predicted the users of mobile payments services would grow from approximately six million worldwide today to over 100 million by 2011, the market is fast developing with Vodafone signing a deal with Western Union last December, and eBay's Paypal Mobile joining the GlobalPlatform standards body this month.
The investment, which interestingly came from Nokia's itself rather than its venture arm, is designed to help Obopay accelerate its global expansion and invest more in its technology. Obopay had previously raised US$69 million--mostly from venture capital firms--including Qualcomm, which led a US$7 million round in 2006. Teppo Paavola, head of corporate business development at Nokia, will join Obopay's board.
For more on this story:
AP and FT
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