Obopay Turns Mobile Phones into Banks

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The privately held company, which does not disclose revenues, has raised over $100 million in financing. Investors include Nokia, mobile phone chipmaker Qualcomm (QCOM), Silicon Valley venture capital firms Redpoint Ventures and Onset Ventures; Citibank (C) and French bank Société Générale (GLE:FP); and Wolfensohn & Co., a boutique investment firm founded by former World Bank chief James D. Wolfensohn.

a lineup of well-funded competitors

Nonetheless, Obopay faces potentially tough competition from the likes of online money transfer service PayPal (EBAY), which has been trying to build a mobile version; London-based Monitise (MONI:LN); and San Francisco-based BOKU, which has offices in Europe, Asia, and Latin America and is funded by well-known Silicon Valley entrepreneurs and global venture capitalists Benchmark Capital, Index Ventures, and Khosla Ventures.

What's more, Western Union (WU) and the GSM Association, a global trade group representing over 750 mobile-phone operators, are working to develop a common framework that operators can use to provide money-transfer services to their customers. Britain's Vodafone (VOD), India's Bharti Airtel, and the Philippines' Globe Telecom (GLO:PM) and Smart Communications already have signed up.

"A lot of people are going after the global banking opportunity," concedes Realini. But there's plenty of opportunity. Worldwide, an estimated 2.5 billion adults lack basic banking services—a huge untapped market. Realini predicts that the convenience of mobile-payment services also will appeal to people who already have bank accounts. "In 10 years we won't have wallets. All of our money will be on our mobile phones," she says.

Jennifer L. Schenker is the founder and editor of Informilo, a European technology Web site and conference producer, and a former BusinessWeek correspondent in Paris.

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