Western Union's Latest Move Jolts Growth for Mobile International Remittance
Posted Tue, 23 Jun 2009 10:07:15 EDT by Mark Beccue
Yesterday, Western Union made a move which will accelerate mobile enabled international remittance when they opened their money transfer services to mobile money platform vendors.
International remittance is a huge business. According to the World Bank, 200 million migrant workers sent $232 billion to relatives and friends in their home country in 2005. Today those funds are sent primarily by wire transfer through banks and money transfer organizations like Western Union and MoneyGram. The vast majority of consumers physically visit wire transfer offices to send and collect funds. While vendors enable consumers to use their services online, many potential money transfer users don’t use internet often. However a great proportion of money transfer customers have mobile phones.
Western Union is looking for an edge in their business and has been steadily working to enable international remittance using mobile phones as the conduit. They have had some challenges as they have been reluctant to build a mobile platform. Initially, their plan was to partner with MNOs who had developed mobile wallet offerings. This would allow migrants to send cash via WU offices to a subscriber with a mobile wallet.
But it’s been slow going for Western Union. MNOs must develop a significant business case to launch mobile wallet functionality, and typically that business case is built on more than the enablement of international remittance. Most mobile wallet business cases include a wide range of mobile money functionality, like mobile banking and mobile commerce.
So Western Union has changed their strategy, by offering their substantial money transfer capabilities to mobile money platform vendors. It’s a smart move – Western Union gets expanded distribution channels, and the mobile money platforms gain the added capability of international remittance to their portfolio.
I’m not surprised WU announced they have agreements in place with four mobile money platform vendors – Fundamo, MChek, Sybase 365 and Utiba. All are very savvy mobile money players. These companies have established MNO and banking customers – Fundamo and Sybase 365 in Africa, MChek in India and Utiba in southwest Asia, all prime markets for international remittance.
In the near future, look for more mobile money vendors such as LUUP, Fronde, MCom and Monitise to join the program as well as news from Western Union and its partners about live mobile international remittance launches.
