Money transfer service provider Western Union and mobile phone
operator body the GSM Association (GSMA) have teamed up to create
what could potentially become the world’s most significant mobile
payments service. The objective is to create an affordable service
that will enable consumers to send and receive low-denomination,
high-frequency money transfers using their mobile phones, opening
up what GSMA CEO Rob Conway termed “a potentially vast market for
financial services”.

He continued that mobile networks now cover more than 80 percent of
the world’s population and 3 billion people have a mobile phone.
This creates an “unprecedented opportunity to extend the benefits
of financial services to the majority of the world’s families for
the first time”, he said.

The mobile money transfer service will enable consumers to use
“mobile wallet software” to undertake person-to-person money
transfers over Western Union’s cross-border remittance network and
also offer cash-to-mobile and mobile-to-cash transactions via
Western Union’s network of 312,000 agent locations in 200
countries. According to Western Union, its global money transfer
system processed about 17 percent of the world’s remittance volume
in 2006.

From the GSMA’s perspective, the new service represents a major
advance for its Mobile Money Transfer programme, in which 35 of its
members in more than 100 countries are participating. The 35
service providers have a total user base of 800 million
customers.

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The GSMA’s programme is led by Sunil Mittal, chairman and MD of
Indian mobile service provider Bharti Airtel, and is overseen by a
steering committee made up of representatives from Bharti and six
other mobile service providers: MTN (Africa and the Middle East),
Orange (Europe, Africa and the Middle East), Orascom (Africa, the
Middle East and Asia), Smart (Philippines), Telenor (Pakistan) and
VimpelCom (Russia and other Eastern European countries).

Western Union and the GSMA have set a tight schedule for the launch
of the new service and have already begun developing a commercial
and technical framework. The first commercial roll-out of the
service is expected to commence in the second quarter of
2008.