Getting Smart About Mobile Payments

December 26, 2009

MoneyGram International, the global money transfer company, and SMART Communications Inc., the leading provider of wireless services in the Philippines, have announced a pilot program that makes it possible for MoneyGram customers sending money to the Philippines to direct those payments to recipients' SMART Money mobile phone accounts.

Mobile money is an emerging trend in both developed and developing countries. Juniper Research, a high-tech research and consulting firm, predicts remittances initiated and/or received via mobile telephone devices will top $65 billion by 2014.

"With more than 4 bilion mobile phones in use worldwide today, people in developing countries often have more access to mobile phones than have access to traditional bank accounts," explained John Hempsey, executive vice president for MoneyGram's Europe, Middle East Africa and Asia Pacific regions. "Mobile Technology will play a critical role in the remittance market, and MoneyGram brings value to partners like SMART in helping to reach new customers and generate new revenue streams."

Hempsey described the Phillippines as "a major global remittance market." SMART counts about 39 million customers throughout the archipelago.

The new payment service is being piloted first at select MoneyGram agent locations in San Diego, California, and in Hong Kong; it makes it possible for customers to send payments directly to SMART Money accounts linked to the recipients' SMART mobile phones in the Philippines.

SMART Money is a mobile phone wallet feature developed to facilitate cross-border remittances. Individual payment recipients have the option of storing remittance value in SMART Money accounts linked to their mobile phones, They can use the same devices to initiate bill payments or withdraw funds from an ATM or other electronic access point.

MoneyGram provides remittance services through an international network of 186,000 agent locations spanning 190 countires and territories.

Western Union Has Similar Focus

MoneyGram's key competitor is Western Union, which counts 375,000 agent locales in 200 countries and territories, has said it is working with several telecommunications companies on mobile payments projects, including Globe Telecom in the Philippines.

In October, Western Union announced a collaboration with Maxis Communications, a leading provider of mobile services in Malaysia, to launch a service that allows Maxis subscribers to send payments from their mobile phones for pick up by recipients at Western Union offices anywhere in the world. The service, upon being launched next year will mark the first time Western Union has enabled mobile phone-enabled payments (sometimes calleld "mobile send" payments) outside the United States, the company said.

There are nearly four times as many individual bank loans to adults in the developed world as there are in developing countries (0.82 vs. 0.22)

_-CGAP