Update: As one of our readers pointed out, the service is not just restricted to Nokia handsets, although the Mobile Money website only lists Nokia handsets. We contacted Nokia and got a response that the service works on all handsets that support SMS including non-Nokia ones.

Nokia and Union Bank of India have commercially launched their mobile payments service,  ‘Union Bank Money’ in the NCR region. Initially the service will be available in Gurgaon, followed by Delhi, Noida and Faridabad. It will be rolled out nationwide in a few months.

As we reported earlier, under the tie-up, registered Nokia stores will act as banking correspondents to Union Bank of India and facilitate service registration, money transfer and cash withdrawal.  Nokia will pre-install the Union Bank Money application in its handsets, in addition to offering it as a download to existing handset owners. Customers who sign up for the service will be able to transfer money, withdraw cash from Nokia outlets as well as from UBI ATMs and pay for utility bills and mobile recharges via their mobile phones.

After the RBI allowed Banks to sign up “companies registered under the Indian Companies Act, 1956, excluding Non Banking Financial Companies (NBFCs)” as Business Correspondents, a whole lot of companies, most of them being Mobile Operators, announced tie-ups with banks. Most of these tie-us are at the initial stage, with only Idea and Axis Bank announcing a commercial launch. It remains to be seen how these work out in real world conditions. Although, Nokia has a large dealer network in India, we still wonder if its a better choice compared to a telecom operator.

Pros:
– Nokia has a major presence in India, being the second largest market in terms of sale. So more people are likely to use Nokia phones, even though that base is on the decline.
– Nokia’s dealer network is comparatively large, which translates into a large number of Banking Correspondent interaction points. Remember that unlike handset manufacturers in the US, Nokia has set up its own distribution network in India.

Cons:
Shouldn’t a money transfer service be handset independent? If a user does not have a Nokia handset, he won’t be able to use the service. A mobile operator would have been a better choice, unless Nokia itself intends to make the service handset independent. If not, Banks are in trouble since there are fewer telecom operators in India than there are handset manufacturers.

Press Release

Related:

– Nokia Stores will be business correspondents for Union Bank of India
– Idea Cellular Signs Up As Banking Correspondent For Axis Bank
– ICICI Bank & Vodafone Essar In Mobile Banking Partnership; Future ATM’s – All Banks, All Telcos
– Airtel Launches Airtel Money: Prepaid Cash On Mobile; Charges, Transaction Limits
– Airtel And State Bank Of India Ink Mobile Payments Joint Venture
– EKO is targeting the migrant population for mobile Banking