Nokia Corp. (NOK) recently introduced an innovative wireless financial service called “Nokia Money” to help consumers access basic financial services using their mobile handset.

“Nokia Money” is a 24-hour service that will enable any mobile phone user to transfer money from his bank account to another account dialing the latter’s mobile phone number. This can be done either through SMS or a call. Nokia is likely to launch this service commercially from early 2010 in select European markets.

The major innovation of this service is that it will be available across various wireless networks from any mobile phone and not necessarily a Nokia handset. This user friendly, fully secured digital financial service can be used for remitting money, pay bills for goods and services, utility bills or top-up prepaid connections. Rural consumers, who do not have access to online services, will particularly benefit from this service.

Mobile financial service has high growth potential. Industry researches estimate that currently there are approximately 4 billion mobile phone users in the world but out of these, only 1.6 billion have individual bank accounts. This indicates that a large population of mobile phone users does not have access to basic financial services.

“Nokia Money” aims to narrow this gap by combining wireless handsets and secured financial services. The company has established an alliance with Obopay, a global leader for developing mobile payment solutions, to commercialize this service. We consider Nokia’s entry into mobile financial service at this stage as a right move as the market is gradually getting crowded.

NTT DoCoMo (DCM) plans to launch an innovative online money transfer service in Japan, where it is the largest wireless service provider. Customers of DoCoMo’s i-mode mobile internet service using the 3G FOMA network will be able to remit up to 20,000 Yen per transaction subject to a monthly limit of 200,000 Yen.

Motorola Inc. (MOT) has also developed a new mobile phone SIM (Subscriber Identity Module) card called “I-SIM NFC Lite” card that can be used for mobile money transfer. The company is currently testing this m-wallet card in Taiwan and plans to launch it in the world’s largest mobile subscriber market of China in the near future.

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