Nokia Mobile Payment Buy In

Nokia Corp. is making a large investment in a California-based startup that wishes to make the mobile phone the credit card for the developing world.

The amount Nokia invested into Obopay Inc. was not disclosed on Wednesday. However, the startup made a regulatory filing this month for the sale of up to $70 million in preferred stock. The filing also noted that Teppo Paavolo, Nokia’s head of corporate business development, will get a seat on Obopay’s board.

The investment is coming from Nokia’s corporate funds, not its venture arms, because it wants a close collaboration with Obopay, said business-development executive Olivier Cognet.

Obopay’s service lets people pay each other through text messages or other cell phone applications. The funds can come out of a bank account or someone’s credit card. Also, you will be able to prepay funds into an Obopay account.

“There’s such a big gap in the world – there are 4 billion phones and only 1 billion bank accounts,” said Carol Realini, Obopay’s chief executive. She founded the company after traveling in Africa, where she noticed how ubiquitous cell phones had become, while financial systems are still rudimentary in many places.

There are several competing mobile phone payment systems, including PayPal Mobile. Nokia has been building transponders into phones, giving them the ability to be swiped over payment terminals. However, Cognet said this marked the first time Nokia was investing in a service like Obopay’s.

Realini said that the investment will help Obopay speed its global expansion and invest more in its technology. Previously, Obopay raised $69 million. Most of that has been from venture capital firms.

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