Union Bank of India, one of the nation's largest state-owned banks, Friday announced that it will launch a mobile money network throughout the country.
Union Bank, which is based in Mumbai, has partnered with Nokia, an Espoo, Finland-based mobile telephone manufacturer, and Obopay, a Redwood City, Calif.-based company that enables the transfer of money between mobile phones.
The service, which is dubbed Union Bank Money service, will allow users to store and send funds on their mobile phones and to make payments with the instruments.
Users will be able to pay bills and top up their own or their families' prepaid SIM (Subscriber Identity Module) cards. SIM cards identify and authenticate users on a network. Prepaid SIM cards enable a single phone number to work in a large number of countries.
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In addition, mobile phone owners will be able to do P2P transfers as well as accept merchant points to pay for goods and services.
Union Bank Money service will enable mobile phone customers to withdraw funds from the bank's network of 2,400 ATMs as well as through Nokia's network of 200,000 outlets. David Schwartz, Obopay vice president of product and corporate marketing, said the outlets sell Nokia phones and banking services.
Customers can sign up for "easy pay," which enables the mobile phone owners to top-up their cell phones, Schwartz said.
In addition, customers can sign up for "easy send," which enables mobile phone owners to store value on the phone and send funds to mobile phones owned by relatives and friends, he said. "A person can send money in seconds," Schwartz explained.
When a person is notified that he has received money, he visits a Nokia store to collect the funds, Schwartz said. Nokia plans to pre-install the application in its mobile devices.
M.V. Nair, chairman and managing director of Union Bank, said the service is scheduled to roll out in 12 to 18 months. "Union Bank Money service will provide mobile financial services to consumers in urban (areas) as well as penetrate rural areas to tap the unbanked populous," Nair said.
India is a huge market for mobile money because of the country's large numbers of cell phones, Schwartz said. “The number of mobile phone subscribers in India totaled 612.2 million at the end of April, up 100 million in the last five months," according to the Telecom Regulatory Authority of India. Gross transaction value of mobile payments in India will reach $1.28 billion in 2013, according to Palo Wireless, a wireless market research firm.
The Union Bank agreement is Nokia's second mobile money transfer agreement this year. In February, Nokia and Obopay launched a six-month mobile money pilot with Yes Bank, a private bank, based in Mumbai. The pilot is taking place in Pune, India.
Nokia has invested $70,000 in Obopay. In August 2009, Nokia unveiled its service Nokia Money.
Teppo Paavola, Nokia vice president, said the company is building an open ecosystem with key partners to enable mobile money.
Carol Realini, CEO of Obopay, said she came up with the idea of transferring funds between mobile phones while working as a volunteer in Africa. Realini realized that residents owned mobile phones, but they did not own wallets.
