Global Money Transfer Pilot Uses Mobile to Benefit Migrant Workers and the Unbanked
BARCELONA, February 12 (www.AllPayNews.com) -- GSMA and MasterCard Piloting a Programme to Make it far Easier and Cost-Effective to Transfer Remittances Globally
The GSM Association has launched a pilot programme aimed at tapping the ubiquity and ease-of-use of mobile communications to enable 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. By exploiting the extensive reach of the mobile networks, the programme will complement existing local remittances channels and make transferring money internationally significantly more affordable.
Spearheaded by a special group of 19 mobile operators with networks in over 100 countries and representing over 600 million customers, the GSMA believes the programme 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 US$1 trillion by 2012.
To combine the strengths of the mobile and financial ecosystems, mobile operators are partnering with banks at a local or regional level, while the GSMA is setting up a pilot with MasterCard Worldwide, a global payments leader whose cards and network provide international authorization, clearing and settlement. The GSMA and MasterCard, which has a 25,000 member-bank network, plan to 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 hub will enable migrant workers to trigger international money transfers using their mobile phone and their families to be notified via their mobile phones.
"The creation of a global hub will enable the mobile networks, which now cover more than 80% of the world's population, to offer the world's burgeoning migrant population a convenient way to securely and cost-effectively transfer money to their families back in their home countries." said Rob Conway, CEO of the GSMA, the global trade association for mobile operators. "We are mobilising financial services for the billions of people who are unbanked and the underbanked."
"In its pivotal role at the heart of commerce, MasterCard has always been committed to harnessing its payment card products and advanced technology to help drive innovation, pioneer new forms of payment and help steer the future of global commerce," said Roy Dunbar, President, Global Technology and Operations, MasterCard Worldwide.
"This pilot provides a unique opportunity to use our global payments products and platform to help open up new business opportunities in developing countries. We look forward to working with local markets and partners to bring much needed payment and money transfer alternatives to the vast community of underbanked--as well as all consumers wishing to transfer money internationally."
"We believe that this coming together of the mobile and banking industry is a giant leap in mobile commerce," added Sunil Bharti Mittal, Chairman & Managing Director, Bharti Airtel and Board Member of the GSM Association. "It will revolutionise 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."
India is both the world's fastest growing mobile services market and the biggest recipient of overseas remittances in the world, accounting for around 10% of the world market.
Mr. O. P. Bhat, Chairman, State Bank of India, India's largest bank added: "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"
Smart Communications of the Philippines, another participant in the programme, 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.
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 remit funds back to the Philippines conveniently and affordably using their mobile phones. Smart also sees the need for a global hub that will be interoperable with the Smart Services Hub. As part of the GSMA programme, Smart plans to launch a pilot project with MasterCard as an authorization, clearing and settlement partner.
"Aside from lowering costs, we shall provide Filipinos overseas greater control over the manner in which their remittances are transmitted and used back home --- enabling them to send funds in the amounts of their choice, whenever they want, wherever they are," said Napoleon L. Nazareno, Smart president and CEO.
International remittances, which total more than US$230 billion a year, are already a major source of income for many developing countries and a very important factor in their economic development. "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," added Mr. Conway.
The GSMA is also working with CGAP (the Consultative Group to Assist the Poor), a microfinance group housed at the World Bank, and the U.K. Government's Department for International Development to conduct a survey of the regulatory environment in about 20 countries, as a precursor to discussions with regulators in these countries about creating the optimum regulatory framework for money transfer and eventually mobile banking and mobile commerce.
Through its Development Fund, the GSMA will also work with mobile operators and financial services companies in individual countries to develop innovative approaches to using GSM mobile networks to further extend the role of mobile technology to deliver greater financial inclusion and lessen the digital divide.
About the GSM Association: http://www.gsmworld.com