Mobile Carriers Facilitate Cash Transfers
Monday, February 12, 2007
Mobile communications operators and banks joined forces on Monday to make it easier and cheaper for hundreds of millions of immigrants and migrant workers to send money home by using their mobile phones.
The aim is to reduce the transaction costs of sending small amounts of cash to just a few percent, from a current 24 percent for amounts as small as $50.
“Out of the 6.5 billion people on the planet, less than 1 billion have a bank account. The only way to sustainably serve these people is through mobile communications,” said emerging markets projects manager Ben Soppitt of the GSM Association, which groups the world’s mobile carriers. Meanwhile, close to 3 billion people have mobile phones, the association pointed out.
A group of 19 mobile operators with networks in more than 100 countries and representing more than 600 million customers will create a global system that could double the number of recipients of international remittances to more than 1.5 billion, while helping to quadruple the size of the remittances market to more than $1 trillion by 2012.
Mobile operators are partnering with banks at a local or regional level. Payment card company MasterCard, which has a 25,000 member-bank network will pilot a global hub that will link together national markets and the local payment systems run by mobile operators in partnership with those local banks.
The idea is that people can load cash on their mobile, and order it to be sent to a mobile phone number in another country, where the recipient receives a message that money has arrived, making it as easy as sending a text message.
“We believe that this coming together of the mobile and banking industry is a giant leap in mobile commerce,” said Sunil Bharti Mittal, chairman and managing director of fast-growing Indian operator Bharti Airtel.
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“It will revolutionize the money transfer industry with its advantages, such as reach, ease of use, and lower transaction costs and provide immense benefits to people in developing nations such as India,” he added.
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