Nokia Money: The Model for Mobile P2P Growth?

With the GSM Association’s Mobile Money Summit wrapping up today in Rio, there has been plenty of media attention focused on developing world mobile P2P initiatives by Zain, Vodafone (MPESA) and MTN , and on the challenge of striking working arrangements between MNOs and banks.

Leaving the bank/MNO feud aside for a moment, what most people have not understood about mobile money transfer initiatives to date is that by and large, none of the current services offer a significant degree of interoperability.For example, Zain, Vodafone and MTN programs only work when both the money sender and recipient are customers of the service – MTN customer to MTN customer, Zain to Zain, etc. A large part of MPESA’s success in Kenya is due to the fact that Vodafone/Safaricom has over 80% of the mobile subscribers there.By contrast, Vodafone has not been as successful in Tanzania.While that could be due to several factors, it is important to note that Vodafone has a much smaller market share in Tanzania than they do in Kenya.

Banks seeking to launch these services face similar challenges and it will be rare to see a bank-led mobile P2P service that embraces interoperability and consequently, exponential growth of mobile P2P.

So how can mobile P2P services be widely distributed?While there is the potential for MNOs to work through interoperability for P2P services (they do so today for text messaging, international roaming), none have done so today.

That’s why Nokia Money’s model is intriguing.Nokia Money is bank and MNO agnostic, leveraging merchants that currently sell Nokia phones as Nokia Money agents.In talking with Nokia Money officials last week, ABI Research found that the Nokia merchant network is more than 500,000 retailers worldwide.Nokia is also by far the most dominant device supplier in developing markets, providing very low end mobile phones throughout Africa and Southeast Asia, including India.

While it is true that Nokia’s potential agent network won’t penetrate as deeply into the extreme rural areas that MNO agents do, Nokia is seeking to extend their agent network by potentially working with the post in selected countries.Traditionally, the post has offered money transfer services, but not mobile.Nokia would embrace a rival and use it to their benefit – something the MNO or bank led initiatives have not done to date.