Nokia, the world's largest maker of handsets, supports the idea of turning cell phones into credit cards and is putting its money where its mouth is.
On Wednesday, the company announced its minority stake in Obopay, a mobile-payment company that enables people to pay for items from Obopay accounts tied to their mobile phones.
Mobile-banking services are expected to grow quickly over the next few years, especially in the developing world, where many people live in places without adequate access to banks or credit.
Market researcher Berg Insight expects the number of people using mobile-banking services to grow on average nearly 90 percent annually, from just 20 million last year to 913 million in 2014, Reuters reported .
The amount of Nokia's investment in Redwood City, Calif.-based Obopay wasn't disclosed. But the Associated Press reported that Nokia is using corporate money and not its venture arm to fund the investment. The news agency also points out that Nokia made a regulatory filing this month for the sale of up to $70 million in preferred stock. The filing noted that Nokia's head of corporate business development, Teppo Paavolo, will get a seat on Obopay's board.
Nokia has been a big believer in using phones as credit cards or wallets. The company has tried near-field communications technology to allow some phones to be swiped at cash registers and subway turnstiles. But this is the first time the company has invested in a payment service such as Obopay.
There are, of course, competing payment services, such eBay's PayPal Mobile.
Previously, Obopay had raised $69 million in funding, mostly from venture capital firms, though cell phone chipmaker Qualcomm led a $7 million funding round in 2006.