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Nokia Launches Pay-By-Phone Service

samzenpus posted more than 5 years ago | from the easy-financing dept.

Businesses 34

adeelarshad82 writes "The world's top mobile phone maker, Nokia, said it would launch a mobile financial service next year targeting consumers, mainly in emerging markets, with a phone but no banking account. Nokia's Money service was based on the mobile payment platform of Obopay, a privately-owned firm that Nokia invested in earlier this year, and it is now building up a network of agents. Obopay, which uses text messaging and mobile Internet access, charges users a fee to send money or to top up their accounts."

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O2 just started doing this in the UK (4, Informative)

duguk (589689) | more than 5 years ago | (#29214787)

Oh you mean in a similar way that O2 (a UK mobile company) started doing in the UK recently with their Cash Manager card?

O2 Cash Manager [] - "You load money onto the card, (using your phone or other methods) then whenever you use it you'll receive a free real time text alert. This will tell how much money you've loaded, spent or withdrawn, and how much you've got left. Simple."

This has been around since the 70s (0)

Anonymous Coward | more than 5 years ago | (#29214825)

Remember those 1-900 porn numbers? Those were the days.

Re:O2 just started doing this in the UK (4, Interesting)

stoolpigeon (454276) | more than 5 years ago | (#29214897)

It's been going on in Africa for quite a while. It sounds like they are just investing more in owning the full process so they can make more profit from what is already going on and will surely be growing. The cell phone companies in much of Africa have essentially become the banks for many people, and of course the vast majority of phones you will find there are Nokia phones.
I was in a meeting last friday with a guy from a communications lab at the University of Central Florida. He is working on distance learning with smart phones. I think we may be doing a test study with them in Kenya next year. We were primarily focused on the education software part of it, but much of the discussion also dealt with microloans and transferring of funds via this method. We would like what we do to be self sustaining. It's really some very exciting stuff I think, but I may be a bit biased.
Not directly related to the article - but they are using Android as their primary platform. I'm stoked about that too because I think Android is going to be huge down the road.

Re:O2 just started doing this in the UK (2, Insightful)

gravyface (592485) | more than 5 years ago | (#29214925)

I can see this working in a modernized market like the UK (see, "those with accounts"), but how does this help those in emerging countries with no bank accounts? Credit cards? Don't you need an account for a legitimate credit card? It's been so long since I've had mine, I can't remember. Seriously, I'm not "getting" how they plan on converting analog currency into a digital transaction with the phone and nothing else.

Re:O2 just started doing this in the UK (3, Informative)

stoolpigeon (454276) | more than 5 years ago | (#29215087)

A person has a phone - they pay for minutes on the sim card. Those minutes have some value. That value can be transferred to another phone. People move money around and the phone company is essentially their bank. There are also endpoints where cash can be had, but in many places this isn't necessary as the money just moves around between phones.

Re:O2 just started doing this in the UK (4, Informative)

jaiyen (821972) | more than 5 years ago | (#29215151)

Here in Thailand, a similar system works by phone users purchasing top-up cards at 7-11's, supermarkets or general stores. Once you've got the credit on your phone, you can make a payment by sending a specially formatted text message. The stores selling top-up cards are everywhere, and no credit cards or bank accounts are needed.

Re:O2 just started doing this in the UK (1)

117 (1013655) | more than 5 years ago | (#29215347)

This appears to be nothing like the Nokia service from TFA. All this is is a pre-pay credit card (of which there have been many available in the UK for a while now [] ), which is only available to O2 customers and has the added function that they send you a text message when your balance changes. It does not let you pay for your stuff with your mobile, and it does not let you top it up using your mobile phone (although you can top it up at O2 shops and mobile phone 'Pay Points').

GSM Security? (3, Interesting)

William Robinson (875390) | more than 5 years ago | (#29214893)

Last time we were trying to push USSD based 'small payment system' in GSM networks, the Central Bank (of that country) launched an independent study which found that security practices in GSM networks were below standards to permit financial transactions. Cloning and some weaknesses in A3, A5 and A8 (and other algorithms/mechanisms) played major concerns.

TFA does not mention anything about security, but, I was wondering how exactly they would take care of this.

Re:GSM Security? (0, Offtopic)

gsgriffin (1195771) | more than 5 years ago | (#29216025)

Spoken like someone who has never actually touched one of the 4 billion people on our planet that have no bank account, credit card, or anything other than a cell phone and cash. You can travel in a lot of the world and find no land phones or banks, but a cell phone tower and everyone with a cheap phones. Developing this technology helps most of the world, but may not impact you at all. You're in the minority of people who may not benefit from this.

Re:GSM Security? (0)

Anonymous Coward | more than 5 years ago | (#29216383)

He asked about security not necessity, point the flamethrower somewhere else...

preinstalled TLS/SSL certificates (2, Informative)

S3D (745318) | more than 5 years ago | (#29216081)

security practices in GSM networks were below standards

If proper certificates preinstalled on the phone and bank server by phone manufacturer, public key crypto shouldn't be vulnerable to man in the middle, and insecurity of GSM wouldn't matter. Nokia is exactly in position to do it.

Re:preinstalled TLS/SSL certificates (1)

grcumb (781340) | more than 5 years ago | (#29221937)

security practices in GSM networks were below standards

If proper certificates preinstalled on the phone and bank server by phone manufacturer, public key crypto shouldn't be vulnerable to man in the middle, and insecurity of GSM wouldn't matter. Nokia is exactly in position to do it.

What bank?

There's no need for a bank at all. Transactions can be done purely using phone credit because, like cash, it retains its value. 5 bucks worth of credit is still worth 5 bucks after you've transferred it. Most mobile network carriers in the developing world have this capability already. It's extremely popular, especially in areas where crime is a problem. Lose your phone? It's a problem, but you can still call the phone company and cancel your account before anyone spends the credit you had stored in it.

Likewise, in nations where travel is difficult, dangerous or expensive, people can pay for things via mobile credit. expediting trade in economically depressed areas.

Phone credit as cash is a brilliant innovation that was discovered by consumers. The fact that Nokia has discovered its usefulness is a sign of their responsiveness, but I'll wait to see just how truly innovative it is.

Re:preinstalled TLS/SSL certificates (0)

Anonymous Coward | more than 5 years ago | (#29228917)

and what to do with all the pre-existing phones. how do you make that ubiquitous? how much money do you lose by not including phones that dont even have key rings, old nokias and the like lol, think harder

GSM Security? There isn't any. (2, Interesting)

SgtChaireBourne (457691) | more than 5 years ago | (#29216269)

GSM only authenticates one way, not both, so it is almost ideal setup for man in the middle attacks. One of the presentations at last year's CCC, the 25C3 [] covered this, but you can find plenty of older and newer material on it elsewhere.

Any GSM phone-based payment system has some big challenges. GPRS could be better, since you can then run something behind SSL or SSH. However, even then, when it comes to money, the designers must design the system on the assumption that the network is insecure, perhaps even the endpoints.

Your official guide to the Jigaboo presidency (-1, Troll)

Anonymous Coward | more than 5 years ago | (#29214989)

Congratulations on your purchase of a brand new nigger! If handled properly, your apeman will give years of valuable, if reluctant, service.

You should install your nigger differently according to whether you have purchased the field or house model. Field niggers work best in a serial configuration, i.e. chained together. Chain your nigger to another nigger immediately after unpacking it, and don't even think about taking that chain off, ever. Many niggers start singing as soon as you put a chain on them. This habit can usually be thrashed out of them if nipped in the bud. House niggers work best as standalone units, but should be hobbled or hamstrung to prevent attempts at escape. At this stage, your nigger can also be given a name. Most owners use the same names over and over, since niggers become confused by too much data. Rufus, Rastus, Remus, Toby, Carslisle, Carlton, Hey-You!-Yes-you!, Yeller, Blackstar, and Sambo are all effective names for your new buck nigger. If your nigger is a ho, it should be called Latrelle, L'Tanya, or Jemima. Some owners call their nigger hoes Latrine for a joke. Pearl, Blossom, and Ivory are also righteous names for nigger hoes. These names go straight over your nigger's head, by the way.

Owing to a design error, your nigger comes equipped with a tongue and vocal chords. Most niggers can master only a few basic human phrases with this apparatus - "muh dick" being the most popular. However, others make barking, yelping, yapping noises and appear to be in some pain, so you should probably call a vet and have him remove your nigger's tongue. Once de-tongued your nigger will be a lot happier - at least, you won't hear it complaining anywhere near as much. Niggers have nothing interesting to say, anyway. Many owners also castrate their niggers for health reasons (yours, mine, and that of women, not the nigger's). This is strongly recommended, and frankly, it's a mystery why this is not done on the boat

Your nigger can be accommodated in cages with stout iron bars. Make sure, however, that the bars are wide enough to push pieces of nigger food through. The rule of thumb is, four niggers per square yard of cage. So a fifteen foot by thirty foot nigger cage can accommodate two hundred niggers. You can site a nigger cage anywhere, even on soft ground. Don't worry about your nigger fashioning makeshift shovels out of odd pieces of wood and digging an escape tunnel under the bars of the cage. Niggers never invented the shovel before and they're not about to now. In any case, your nigger is certainly too lazy to attempt escape. As long as the free food holds out, your nigger is living better than it did in Africa, so it will stay put. Buck niggers and hoe niggers can be safely accommodated in the same cage, as bucks never attempt sex with black hoes.

Your Nigger likes fried chicken, corn bread, and watermelon. You should therefore give it none of these things because its lazy ass almost certainly doesn't deserve it. Instead, feed it on porridge with salt, and creek water. Your nigger will supplement its diet with whatever it finds in the fields, other niggers, etc. Experienced nigger owners sometimes push watermelon slices through the bars of the nigger cage at the end of the day as a treat, but only if all niggers have worked well and nothing has been stolen that day. Mike of the Old Ranch Plantation reports that this last one is a killer, since all niggers steal something almost every single day of their lives. He reports he doesn't have to spend much on free watermelon for his niggers as a result. You should never allow your nigger meal breaks while at work, since if it stops work for more than ten minutes it will need to be retrained. You would be surprised how long it takes to teach a nigger to pick cotton. You really would. Coffee beans? Don't ask. You have no idea.

Niggers are very, very averse to work of any kind. The nigger's most prominent anatomical feature, after all, its oversized buttocks, which have evolved to make it more comfortable for your nigger to sit around all day doing nothing for its entire life. Niggers are often good runners, too, to enable them to sprint quickly in the opposite direction if they see work heading their way. The solution to this is to *dupe* your nigger into working. After installation, encourage it towards the cotton field with blows of a wooden club, fence post, baseball bat, etc., and then tell it that all that cotton belongs to a white man, who won't be back until tomorrow. Your nigger will then frantically compete with the other field niggers to steal as much of that cotton as it can before the white man returns. At the end of the day, return your nigger to its cage and laugh at its stupidity, then repeat the same trick every day indefinitely. Your nigger comes equipped with the standard nigger IQ of 75 and a memory to match, so it will forget this trick overnight. Niggers can start work at around 5am. You should then return to bed and come back at around 10am. Your niggers can then work through until around 10pm or whenever the light fades.

Your nigger enjoys play, like most animals, so you should play with it regularly. A happy smiling nigger works best. Games niggers enjoy include: 1) A good thrashing: every few days, take your nigger's pants down, hang it up by its heels, and have some of your other niggers thrash it with a club or whip. Your nigger will signal its intense enjoyment by shrieking and sobbing. 2) Lynch the nigger: niggers are cheap and there are millions more where yours came from. So every now and then, push the boat out a bit and lynch a nigger.

Lynchings are best done with a rope over the branch of a tree, and niggers just love to be lynched. It makes them feel special. Make your other niggers watch. They'll be so grateful, they'll work harder for a day or two (and then you can lynch another one). 3) Nigger dragging: Tie your nigger by one wrist to the tow bar on the back of suitable vehicle, then drive away at approximately 50mph. Your nigger's shrieks of enjoyment will be heard for miles. It will shriek until it falls apart. To prolong the fun for the nigger, do *NOT* drag him by his feet, as his head comes off too soon. This is painless for the nigger, but spoils the fun. Always wear a seatbelt and never exceed the speed limit. 4) Playing on the PNL: a variation on (2), except you can lynch your nigger out in the fields, thus saving work time. Niggers enjoy this game best if the PNL is operated by a man in a tall white hood. 5) Hunt the nigger: a variation of Hunt the Slipper, but played outdoors, with Dobermans. WARNING: do not let your Dobermans bite a nigger, as they are highly toxic.

Niggers die on average at around 40, which some might say is 40 years too late, but there you go. Most people prefer their niggers dead, in fact. When yours dies, report the license number of the car that did the drive-by shooting of your nigger. The police will collect the nigger and dispose of it for you.

Have it put down, for god's sake. Who needs an uppity nigger? What are we, short of niggers or something?

They all do this. Shorten your nigger's chain so it can't reach any white women, and arm heavily any white women who might go near it.

Not unless it outnumbers you 20 to 1, and even then, it's not likely. If niggers successfully overthrew their owners, they'd have to sort out their own food. This is probably why nigger uprisings were nonexistent (until some fool gave them rights).

Yeah, well, it would. Tell it to shut the fuck up.

A nigger's skin is actually more or less transparent. That brown color you can see is the shit your nigger is full of. This is why some models of nigger are sold as "The Shitskin".

What you have there is a "wigger". Rough crowd. WOW!

They're as common as dog shit and about as valuable. In fact, one of them was President between 1992 and 2000. Put your wigger in a cage with a few hundred genuine niggers and you'll soon find it stops acting like a nigger. However, leave it in the cage and let the niggers dispose of it. The best thing for any wigger is a dose of TNB.

And you were expecting what?

When you came in here, did you see a sign that said "Dead nigger storage"? .That's because there ain't no goddamn sign.

hurry up (0)

Anonymous Coward | more than 5 years ago | (#29215125)

they should hurry up implementing this, before someone else does...
the amount of money to be made here is enormous

Money laundering (0)

Anonymous Coward | more than 5 years ago | (#29215133)

Won't this fall foul of money laundering regulations?

Where is the need for a mobile phone? (1)

millwall (622730) | more than 5 years ago | (#29215301)

Where is the need for a mobile phone? Why can't this be done with just a credit card and an RFID chip instead like the Barclaycard OnePulse [] . Investing in infrastructure for this kind of card would make a hell of a lot of more sense to me.

Re:Where is the need for a mobile phone? (2, Informative)

natehoy (1608657) | more than 5 years ago | (#29215823)

Need? Who said anything about need? Look at the title again - "Nokia is launching..."

This is being launched on a phone because it's being launched by a company that makes phones.

Sure, this could all be done with a credit card and an RFID chip, but then Nokia wouldn't be launching it, would they? :)

Nokia wants your phone to be your phone, your Internet connection and email client, your camera, and now your wallet. The more functions they can put on a phone and have them generally accepted, the more people will need to carry them, and if this payment system is exclusive to Nokia phones you're more likely to buy one.

Re:Where is the need for a mobile phone? (1)

prayag (1252246) | more than 5 years ago | (#29215917)

Why can't this be done with just a credit card and an RFID chip instead like the Barclaycard OnePulse [] .

Credit cards to people having no bank accounts ?

Re:Where is the need for a mobile phone? (1)

drinkypoo (153816) | more than 5 years ago | (#29216245)

People already have and use cellphones. Go to Peru and you'll find people riding donkeys and talking on cellphones. Expecting people to carry an additional piece of plastic is stupid. We wouldn't even have land lines any more (hardly) in this country if it were smaller, because most of us have cellphones too, but we have hills and trees and therefore problems covering large areas.

Re:Where is the need for a mobile phone? (1)

Tellarin (444097) | more than 5 years ago | (#29216319)

It's simple, they use a phone as people already have a phone, there is no need for new infrastructure, and because people using the system don't have a bank account (let alone a credit card).
This is not even a brand new idea by Nokia. Lots of operators are doing similar things.

Re:Where is the need for a mobile phone? (1)

Chibinium (1596211) | more than 5 years ago | (#29216463)

Where is the need for a mobile phone? Why can't this be done with just a credit card and an RFID chip instead like the Barclaycard OnePulse [] . Investing in infrastructure for this kind of card would make a hell of a lot of more sense to me.

Credit cards aren't necessities; cellphones are beginning to be, as they link rural merchants with their market and the rest of the world. Developing countries also prefer cell towers over phone lines for cost issues. They're basically skipping over a century of prototyping. With that said, hitchhiking one extra function onto a guaranteed platform would seem logical enough.

Re:Where is the need for a mobile phone? (1)

Zerth (26112) | more than 5 years ago | (#29216839)

That'd require an additional item that is useless except for its cash value. Cell minutes have use by themselves. In countries where only a few people in an area have cells, this allows them to offer communications services and act as ATMs.

They sell use of the cell for cash, but you can also buy them minutes to send to another "cell operator", who will then pay out in another village from their stash from selling use of their cell. Tadah, low-resource wire transfer.

In other news... (0)

Anonymous Coward | more than 5 years ago | (#29215505)

Nokia n900 specs revealed: []

This is good news for helping people (1)

gsgriffin (1195771) | more than 5 years ago | (#29215943)

If any of you have lived in countries that are less developed, you will notice that most people will have a cell phone, but not a bank account, credit card or anything other than cash. The good news about these types of services is that they are begining to provide the majority of the world with the opportunity to have money "on account" and can actually be used more and more like a credit card. If you need something or want to buy something from someone, you can transfer money from your account to someone else. I saw this happening already in countries like Botswana, believe it or not! Applaud the development of technology that may have very little impact on you but could stand to help billions of people in the world.

go^mat (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#29216107)

parties). At THE they started to Series of debates to place a paper OPEN PLaTFORM, Java IRC client

Won't see it in the US. (1)

MaWeiTao (908546) | more than 5 years ago | (#29216371)

I thought it was already quite common to pay for things via a mobile phone in Europe and Asia. The transactions and billing show up on the phone statement. My company has a client who was interested in this sort of thing for their service and instead had to go with a clumsy workaround. Apparently credit card companies and banks have lobbied quite hard to keep anyone else from encroaching on their business.

So I'm curious to see if Nokia's service will ever see the light of day in the US. American financial institutions are so in bed with the government that they're basically protected from the need to actually be competitive.

Compete with free (1)

BurtCrep (601313) | more than 5 years ago | (#29217363)

I suppose the trend is unstoppable by now as we all jumped right into it with our credit and debit cards. Still, I'm always amazed that people willingly pay to pay, that is, give a fraction of the transaction to some third party, just for allowing the transaction to take place. In the good old days of cash, the passing of money from one hand to another was free. Now it appears that every time I need to pay for something, I need to pay a little more. Is that really acceptable? Am I the only one who's not too excited by this?

Re:Compete with free (1)

tlhIngan (30335) | more than 5 years ago | (#29218073)

I suppose the trend is unstoppable by now as we all jumped right into it with our credit and debit cards. Still, I'm always amazed that people willingly pay to pay, that is, give a fraction of the transaction to some third party, just for allowing the transaction to take place. In the good old days of cash, the passing of money from one hand to another was free. Now it appears that every time I need to pay for something, I need to pay a little more. Is that really acceptable? Am I the only one who's not too excited by this?

If it's between two people, cash handling is cheap. If it's for a small business (think corner store), handling cash is likewise cheap. But get bigger, say the Target/Best Buy/Wal-Marts of the world, and cash handling suddenly gets very expensive.

But first, about cash and two people - lots of people don't want to carry large amounts of cash. If you're buying something for $500, and you've got to meet someone at an unknown location, do you really want to carry $500 in easily-stealable cash, or would you rather have it billed to you later, possibly with legal protections and paper trails? After all, there's many a story about (probably dumb) sellers/buyers getting robbed of their merchandise/cash. That, and who really wants to carry more cash than they can afford to lose that instant on the street (muggings, pickpockets, etc)? Credit, and to a limited extent, debit cards help avoid the issue, somewhat. Debit cards being preferred since money can be withdrawn easily and someone can be forced to give up their PIN. (Why banks don't allow for a "distress" PIN, I don't know).

Back to the cost of handling cash - yes, handling cash is expensive. Any retail flunky can do the steps needed for a credit/debit transaction - the computer spits a number out, number is punched into machine (or computer can do that, too!), card is swiped or read (chip cards), and a piece of paper comes out signalling payment success or failure. For credit, one piece has signature (or with pin, store copy) which is slid into the drawer and another copy given to customer with receipt. Computer keeps track of everything.

Cashiers though, have it much tougher. At the retail level, the company has to trust you (or have big surveillance cameras similar to casinos), which automatically costs money - doing retail cash transactions means you probably earn a little more money than minimum wage to reduce temptation and the possibiliy of getting jumped from the back room to the cash register. Next, a whole lot of book-keeping goes on. A cashier has to "sign out" their cash trays, which have a specific amount of money in them (bills, coins, coin rolls). A smart cashier would count the money to ensure it's correct. Then they log into the register and enter in the starting cash amount. Finally, transactions are done.

At the end of the shift, they close out the register, and the register prints out the amount of cash the tray should have. The cashier then has to take the tray back, and count the cash in it to ensure they match. Often, they don't by a few dollars (happens - usually through wrong change), and the discrepancy noted. If it's big enough, then something has to happen, usually more training for the cashiers because of it. It's also why cashiers "make change" with each other - giving a $10 note to exchange for a $10 coin roll, for example, or breaking a 50 for 5 10s. The register doesn't care about the actually bills, just the totals. And bad things can happen when you're up short.

And then, at the end of the day, the money has to be deposited at the bank. If it's a particularly big day of takings or if there's a large amount of money at the end of the day ($100K+ isn't unusual for big box stores), then the armoured cars are brought in, which also cost a bit of money, to transport the cash to the bank. For your local corner store which may have a few thousand dollars per day, they use wallets and the depository slot.

Handling cash isn't "free" - it's very cheap for individuals (at worse, they have to run to the bank to deposit the cash) and small businesses. But the bigger stores, handling cash starts costing real money. Hell, your workplace probably has lots of rules regarding petty cash, meant to ensure the accountants can keep the books straight. Credit/debit makes book-keeping much simpler, which is usually why it's easier to expense something than get petty cash ahead of time to pay for it.

Virgin Mobile... (1)

Xin Jing (1587107) | more than 5 years ago | (#29217871)

I've been doing pay as you go for the past 8 months with Virgin Mobile which uses the Sprint network. It's been convenient to top up since I get the topup cards at Wal Mart while I'm shopping for my weekly goods. I buy a $20/200 minute card and could get better /minute rates if I did a minute pack and paid more for each topup. All in all it's a good setup, although there are a couple of times where my remaining minutes were exhausted before I could topup and had to go get a card to call back, which was mildly embarrassing due to poor planning on my part.

heard this service since 2004 (2, Informative)

CALI-BANG (14756) | more than 5 years ago | (#29218375)

.. here in Philippines.

I believed this service is far more successful in third world country. In some place there's no paypal or even
the concept of wire transfer is quite alien to them. it's easier to send money through sms than going to the
bank and depositing money to someone's account.

Its not easy (0)

Anonymous Coward | more than 5 years ago | (#29228843)

SMS is ubiquitous you have a phone you have SMS facilities.
Some assumptions being made on this thread are somewhat incorrect.
If you wish to launch a money transfer service in a country youll have to be vetted by the regulatory bodies in question.
Transferring and using phone credits as money would extend the reach of the phone credit facility into financial regulatory models. This doesnt happen.
For money transfer systems a separate account is required.
You are competing with and taking business from banks, you need a network of agents who will accept your virtual money, you need to ensure those agents are trustworthy and that yours and your customers money is safe, you need to ensure that the technology is fraud proof, corruption proof, and available.
This is no minor undertaking and very few implementations have succeeeded outside of safaricom's mpesa.
The technology is relatively simple actually, its everything else around it that makes it hard to succeed in this emerging industry.

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