Money transfers go mobile for migrant workers
Wireless remittance scheme targets unbanked
3GSM The GSM Association has teamed up with Mastercard to launch a pilot program to make it easier for international migrant workers to send money home.
The scheme aims to make it more straightforward for the world's 200 million international migrant workers to easily and securely send remittances to their dependents, many of whom don't have bank accounts (but who do have mobile phones.
Precise figures on the cost of the money transfer weren't detailed, but delegates attending the 3GSM Conference in Barcelona on Tuesday were told the scheme would make it "significantly more affordable".
A group of 19 mobile operators, who together service 600 million customers in more than 100 countries, are teaming up with banks at a local or regional level, while the GSMA is setting up a pilot with global payment and credit card organisation MasterCard Worldwide.
The GSMA and MasterCard plan to develop a global hub that will link together national markets and the local payment systems run by mobile operators in partnership with local banks. The hub will enable migrant workers to initiate international money transfers using their mobile phone and their families to be notified via their mobile phones.
International remittances, which total more than $230bn a year, are already a major source of income for many developing countries. "The programme will resonate with governments because it makes the international payment market more transparent, encourages financial inclusion, reduces crime, and boosts the flow of hard currency into their countries," GSMA CEO Rob Conway said.
The GSMA reckons the scheme could double the number of recipients of international remittances to more than 1.5 billion, while helping to quadruple the size of the international remittances market to more than $1 trillion by 2012.
Residents of countries such as India, a fast growing mobile services market and the biggest recipient of overseas remittances in the world, accounting for around 10 per cent of the world market, are expected to benefit from the scheme.
Mr O P Bhat, chairman of the State Bank of India, India's largest bank, commented: "We are happy to partner with the GSM Association in this landmark project. We piloted a project in a small Himalayan village of Pithoragarh in India with Airtel and have seen the tremendous results in this unbanked village. This project has the potential of transforming the lives and economies across the globe."
Another goal of the scheme is to service people from south east Asia living in the Middle East.
Smart Communications of the Philippines, for example, plans to work with mobile phone operators and banks in Bahrain, Italy, and other countries hosting large Filipino migrant populations.
In Bahrain, Smart will work in partnership with MTC Vodafone Bahrain and a leading bank in the Middle East. Through the Smart Services Hub, Filipino migrants and contract workers can send funds back to the Philippines using their mobile phones. As part of the GSMA programme, Smart plans to launch a pilot project with MasterCard as an clearing and settlement partner.
The GSMA is also working with CGAP (the Consultative Group to Assist the Poor), a microfinance group housed at the World Bank, and the UK Government's Department for International Development on a survey on the regulatory environments in about 20 countries, ahead of possible talks about creating the optimum regulatory framework for money transfer and (eventually) mobile banking.
Separately, mobile phone firms have joined forces with the US government to support health workers fighting the AIDS pandemic in southern Africa. The $10m Phones for Health partnership is initially focused on 10 African countries but may spread as the scheme takes off.
Phones for Health will allow health workers in the field to use a standard Motorola handset equipped with a downloadable application to enter health data. Once entered, the data is transferred via a packet based mobile connection (GPRS) into a central database. If GPRS isn't available, the software can use an SMS data channel to send the info. The data is then processed and made available on the web, where it serves as a resource for health authorities. ®