Use Your Mobile To Transfer Funds
Very soon, all you would need is to transfer money, is to ‘top up’ your mobile phone with money and SMS the amount to the other person’s mobile. They in turn would receive a number (similar to a PIN) and be able to redeem this for cash at any prepaid distribution point of their mobile service provider.
Banking regulations in India currently do not allow cash for exchange of another ‘unit’ such as ‘airtime’ in the case of mobiles. Only banks and the Indian Post (through money orders) are currently allowed such transfers. However, the momentum in India is building up with the regulators having floated consultation papers in this regard, according to a source close to the development, with an announcement expected as soon as next week.
Anil Kapur, managing director, South Asia, Western Union Financial Services, said: “We have agreements with operators around the world, and are looking at mobile money transfers of principal amounts worth $100 and below. It will be a high volumes-low margin play. It will help the millions in remote towns and villages, who do not have or need a bank account.”
Estimated charges for international transfers on such a sytem are around 4 per cent, and in-country transfers could be as low as the cost of a text message.
For India, the opportunity would be great - think 200 million mobile subscribers, a little over 300 million savings account holders but slightly over 70,000 bank branches.
Moreover, recorded remittances sent home by migrants from developing countries reached $206 billion in 2006 (currently estimated to be around $250 billion), according
to the World Bank’s Global Development Finance Report 2007. The top recipients of remittances in nominal dollar terms are India (around $27 billion according to RBI),
Mexico, China, and the Philippines.
Globally too, Smart Communications, of the Philippines, plans to launch several pilot projects in collaboration with mobile phone operators and banks in Bahrain, Italy and other countries hosting large Filipino migrant populations.
GTel’s G-Cash programme is another Philippine service using SMS to execute transactions and cash centres to pay out funds received.
In Mozambique, MCel has introduced a system of airtime transfer from phone to phone, effectively allowing trading in very small denominations. India, hopefully, should soon follow suit.
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