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Does Nokia’s Investment In Obopay Impact India’s Mobile Payments Market?

Obopay, the US and India based Mobile payments company has raised an undisclosed amount from Nokia, for a minority stake; FT reports that that the investment is around $70 million. Teppo Paavola, VP and head of Corporate Business Development at Nokia has joined Obopays board. Obopay intends to use the money to enhance their global presence, but no specifics are mentioned. What is interesting about this investment is that it is Nokia, and not its investment company that has put in the money. 

Also, does Nokia dont want to get into the Mobile Payments business? Why didn’t they try to buy out Obopay?

How can Obopay leverage Nokia?

— Telco relationships: Nokia is rolling out Ovi, its services brand, and has established relationships with telecom operators. Obopay can leverage Nokia’s investment and contacts to get a foot in the door to be seen as a potential mobile payments partner

— Preferred Handset client: One wouldn’t be surprised to find future Nokia handsets with built in default Obopay applications. One of the toughest parts of the applications business is actually getting on the handset – this is where Airtel works out very well for MChek, since MChek is on its SIM-toolkit (i.e.: pre-loaded on the SIM card, as a part of Airtel Services). 

— Preferred payment partner for Ovi services: Nokia can showcase Obopay as its preferred payment partner for music, games and other content which will be available for purchase on Ovi. Obopay has a consumer focused mobile wallet product.

Does this impact the Indian mobile payments business?

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Obopay has seen limited deployment in India – they’ve tied up with Tata Indicom, Aircel and BPL mobile on the telco side, and Yes Bank on the banking side. Because of the RBI regulations, Banks are the most important players in the mobile payments space so far. Telecom operators are key as well, in order to provide access to consumers, but the handset manufacturers don’t have that important a roll. It’s far more important for a company like Obopay to get banks and telecom operators on board, instead of a handset manufacturer.

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