Falling revenues in its core handset business have prompted Nokia’s India subsidiary to pull the plug on the mobile-payment service it launched nationwide last year.

In a March 12 statement, Nokia India Pvt. Ltd. said it is shuttering its financial services in India, effectively pulling away from the mobile-payment service it launched with Yes Bank Ltd. and Union Bank of India Ltd. (see story).

The company instead plans to concentrate on its core businesses, a Nokia spokesperson tells PaymentsSource.

Nokia rolled out its standalone, carrier-agnostic mobile-payment service nationwide in December (see story).  It had been conducting field tests with banks across such cities as Pune and Nasik (see story).

“We will continue to provide the service for our customers and would chart a path for the service to be independent of Nokia,” a Union Bank spokesperson tells PaymentsSource.

The service enables customers to make basic point-of-sale purchases, but it did not support advanced banking functions, such as funds transfers. Some 35 billers had participate in the service.

Nokia had never charged customers to use the service because it views Nokia Money as an incentive to buy a Nokia phone. However, sales instead have fallen, Mrinalini Manral, a banking analyst in Mumbai, tells PaymentsSource.

“It is no big secret that Nokia’s handset business is suffering worldwide,” she says. “This shakeout can be nothing but a result of the downward trend in its fortunes as a handset maker.”

Nokia said in a statement that its 100,000-plus customers in India who use this service will be given ample time to exhaust their accounts and switch to other players that offer mobile payments.

Nokia will provide support to all customers until they exhaust the balance in their mobile wallets and will not levy any transaction charges on them.

The handset maker also will reimburse the registration fee of 30 rupees (6 U.S. cents or 45 euro cents) to each customer. Customers of Nokia Money will start receiving notices March 15 on their account options.

The company plans to remain as an investor in Obopay Inc., it said. Nokia had used Obopay's technology to launch this service in 2010 and reportedly has invested around US$70 million in the company.

What do you think about this? Send us your feedback. Click Here.

 

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry