Mobile Carriers to Simplify Sending Money to Foreign Countries

[Ekkie Tepsupornchai]

<div class='os_post_top_link'><a href='http://today.reuters.com/news/articlenews.aspx?type=technologyNews&storyid=2007-02-12T085530Z_01_L09313027_RTRUKOC_0_US-MOBILE-3GSM-REMITTANCES.xml' target='_blank'>http://today.reuters.com/news/artic...REMITTANCES.xml</a><br /><br /></div><i>"Mobile communications operators and banks joined forces on Monday to make it easier and cheaper for hundreds of millions of immigrants and migrant workers to send money home by using their mobile phones. The aim is to reduce the transaction costs of sending small amounts of cash to just a few percent, from a current 24 percent for amounts as small as $50."</i><br /><br />This almost sounds like a PayPal-kind of service except that it would be tied to your phone and/or phone number and the users won't need supporting bank accounts. Security and authentication are obviously huge critical success factors here. Vodaphone will conduct initial testing between UK and Kenya though several other countries and telecommunications companies are planning similar testing soon thereafter.

[Brad Adrian]

That's an interesting idea, especially the way it simply transfers money from one mobile account to another (at least that's what it sounds like). The "un-banked" in the US have been getting hosed for a long time when they want to send money to relatives in other countries; on AVERAGE, people sending money to Mexico pay about 15% in fees.

I'm curious about the details, though, because of the implications for the operators and the involved banks. Unless the banks somehow offload the funds, the operators will be subject to the same regulations as other financial services providers.

What makes the most sense to me would be for the mobile operators and banks to issue debit cards once the funds have been received, rather than require people to open bank accounts.