Money transfer through cellphones catches on

Sunday, Mar 18, 2012

Gulf News

Dubai No more queues, no more forms, no more trips to banks or money exchanges. Remittances and payments through cellphones are catching up.

With mobile money transfer evolving in several countries, people will soon be able to transfer money to beneficiaries in another country.

“With mobile money transfer getting momentum, we are entering into an uncharted territory. We need to do a lot of things to enable cross-border mobile-to-mobile money transfer,” Jean Claude Farah, Senior Vice-President for Middle East and Africa of Western Union Financial Services, says.

Bangladesh model

The path to mobile money transfer is not without hurdles as any cross-border payment has to undergo strict checks and regulations.

While the market demands deregulation, governments seek stricter control on the flow of cash, thus limiting the business. Perhaps the biggest driver of m-commerce is the spread of mobile phones to rural areas.

M-Pesa in Kenya and Banglalink in Bangladesh have already transformed the way money is transferred. While the service is limited to transactions within Kenya, mRemittance has changed the way Bangladeshis send money home from several countries, including the UAE.

These models are yet to become mobile wallets or m-wallet, where money will be stored in phones, like mobile credits, and can be transferred.

In India, up to Rs50,000 (Dh3,573) can be transferred through mobile phones, but within its territories. There is still more work to be done if m-wallets are to be used for cross-border  transactions.

“All countries have to work together to find common platforms and systems that work smoothly across the world,” Claude Farah says.

By Saifur Rahman?Business Editor