People generally expect technologies to develop in developed nations. But it was proved the otherwise, when the revolutionary mobile wallet technology was pioneered by an African nation – Kenya. Without any doubt, it is one of the most successful technologies which would define mode of payment and money transfer in the near future. Companies in developed nations have already begun adopting this technology and have launched mobile wallets. In fact, even companies in many developing nations have piloted it.
The service was first launched by Kenyan mobile operator Safaricom, which has 75% of the market share in Kenya. 80% of their customers already use mobile wallet service, which is called M-Pesa. Safaricom saw a demand and supply gap in the country’s banking system and realized they could fill this gap by giving access to accounts to those people who had no access to banks.
Another reason for them to launch this service was the need of the Kenyans to transfer money to other parts of the country, which previously happened either by a person himself/herself travelling in order to give money to their family or friends or by sending it through a trusted bus driver. With M-Pesa, users can send money to even the most remote parts of the country in seconds.
M-Pesa is currently the most developed mobile payment system in the world. 43% of Kenya’s GDP reportedly flows through M-Pesa. Users can withdraw and deposit money on their mobile wallet with this service at any M-Pesa agent location across the country, they can transfer money to M-Pesa users as well as non-users, they can pay bills and purchase airtime, they can transfer money to bank accounts and they can also pay the grocers for grocery.
Initially launched in Kenya, M-Pesa later expanded to Tanzania and Afghanistan in 2008, South Africa in 2010 and India in 2013. Tanzania has approximately 5 million subscribers to M-Pesa. In Afghanistan, M-Pesa was initially used to pay policemen’s salary, now it has expanded to include limited merchant payments, money transfers, loan disbursements and payments. Growth of M-Pesa has been slow in South Africa and India but they are working on repositioning the brand and are trying different ways to promote the product.
Safaricom recently launched a service called M-Shwari, which is a paperless banking service offered through M-Pesa. Users can open bank accounts, manage the bank account, save money and access microfinance right from their mobile device.
Did you know you do not need to visit a Western Union agent anymore to send money? Apart from going online, Western Union has gone mobile. Yes, they now have a money transfer app.
Money can be sent using a debit/credit card from anywhere in the world. The app acts like the users own agent for money transfer to hundreds and thousands of locations, for paying bills, locating agents, track transfers, and more. All you need is a smartphone with this app installed, an account with Western Union and a bank card. If a user is not registered with Western Union, he/she can register at http://www.westernunion.com.au/.
Mobile Money Transfer is already running in 17 countries around the world. Here is a map showing these countries. One will have access to the 515,000 Western Union agents across the globe in over 200 countries, right from their smartphone. Funds can be sent and received in three different ways.
Cash can be sent from any of the agent locations to a mobile number from participating countries. Money can also be sent from a mobile phone to be received at any of the agent locations. Apart from these, transfers can be done from mobile phones to other mobile phones from participating countries. Western Union calls these: Cash to Mobile, Mobile to Cash and Mobile to Mobile transfers.
Money can also be sent directly to mobile wallets in select countries, where Western Union has tied up with mobile phone operators. To mention a few, they have tied up with Roshan M-Paisa in Afghanistan, Tigo in El Salvador, Guatemala and Honduras, Safaricom M-Pesa in Kenya and Globe GCash and Smart Money in Philippines.
To send money to a mobile wallet, one must make sure the receiver has a mobile wallet and review operators accepted by Western Union. One must provide the receiver’s mobile number for sending the money, after which SMS notification is sent to the receiver, as well as the sender. Money can be sent to a mobile wallet wither online or from an agent location.
I won’t be surprised if Western Union has its own mobile wallet in the near future, which would be used for making purchases, make money transfers and much more, right from a smartphone or a tablet.
As banks adopt mobile banking apps, money transfer has been the new addition. Barclays bank of the UK launched an app called Pingit, which can now be used for making money transfers in the UK and to select qualifying countries.
Since launch in 2012, only the Barclays current account holders of age 18 and above were able to use this app for sending and receiving money. But as global banks are opening up to the customers, Barclays decided to make this service available to all their customers aged over 16, who have a current account. Not only that, they went a step ahead in making it available even for non-customers. So any individual who has a current account at any UK bank can use this app and make payments. This app is also available for UK small businesses, who bank with Barclays. There is also an option to receive payments on the Barclays website, which is open to all app users and also to UK small businesses who bank elsewhere and Barclays’ corporate customers.
The app is available for Android, iOS and Blackberry OS. However, money transfer is associated with the phone number rather than the app installed on that phone. This means that all phones will be eligible to receive payments and not just smartphones with Pingit installed. In this case, the recipient has to register online for collecting the payment.
Pingit works on Faster Payment Scheme and all transfers happen instantly, even between Barclays and non-Barclays customers. All transfers are free of charge and the daily limit for sending is £1,500, while for receiving it is £5,000 and the minimum sending amount is £1. However, for joint accounts as well as for payment being made to businesses different limits apply. Payments can also be made internationally to select qualifying countries at no extra charge, but the recipient in other countries must be pre-registered for an appropriate Barclays service.
When the payment has been made, if the recipient is not a Pingit user, they are asked to register for it online or in the app within 24 hours of 5 days, as the sender chooses. For certain businesses, payments can also be made using short codes and QR codes.
Businesses can receive money from customers at no monthly charge. All they need is a mobile phone and a phone number. The app also supports making refunds and generating daily reports.
Like many other banks, they have introduced many good features in this app, but what makes it stand out is that it has no extra charge.
Allied Irish Bank has launched a mobile app called Me2U in association with visa, which lets their customers transfer money to a recipient’s euro personal visa card using the recipient’s mobile number. The app is available for download on Apple Store or Google Play Store. Me2U has been introduced as a part of AIB internet and phone banking service.
As mobile wallets are growing, banks are adopting the new technology to keep up with customer demands, keep up with the competition and go a step ahead.
For receiving money from a Me2U app, the recipient does not need to have an account with Allied Irish Bank, but must have a euro personal visa card. The sender, however, has to be an AIB customer. All the sender has to do is login to the Me2U app and select the recipient’s mobile number for his/her contact list, enter the amount and hit send They can also send money using the recipient’s visa card number. The money is then transferred from the sender’s AIB personal visa card to the recipient’s card. The maximum amount allowed daily is €300 and this money can be sent to up to 5 recipients per day per card.
Up to 3 cards can be registered on the Me2U app for money transfer. A user is also required to have a valid email address of a phone number for using the app.
Money transferred from Me2U app is delivered within 30 minutes. However, if the recipient’s card is issued by other than AIB, it may take up to 1 business day for the funds to be received by the institution. In this case, when the transfer is initiated, a text message is sent to the sender’s phone, which has a link to visa collection website. After entering the visa card number, a claim code is generated, which has to be shared with the recipient, who can collect the payment within 7 days, after which, they payment is cancelled. The sender’s account is not debited, until the recipient collects the money.
When sending and receiving money with an AID Debit card, the fee has been waived until 28th November 2014 as the introductory offer; standard charges will be applicable after this period. No fee is charged for AIB credit card Me2U transactions. When money is sent to recipients having cards from another financial institution, they are charged a fee based on the standards of their institution.
The service is new and needs further improvements. More banks will surely try this soon in order to keep up with the technology and for better convenience of their customers.
Mobile money is the new trend in money transfer. Traditionally, people carried coins for making payments, then came the bills and then the plastic money which we call credit/debit cards. All of this may now be replaced with mobile money.
Though the usage of mobile money is quite low, but it is growing and being adopted all over the World. In this article, I will talk about charity done with mobile money.
Funds are usually raised for supporting poverty stricken fragments of the underdeveloped nations, disaster stricken lands, or for some other social causes. This happens through wire transfers, check or DD payments, cash payments through representatives, etc. With the introduction of Mobile Money, another medium was added to this list and this is quite convenient. This medium is useful because it saves costs and gives more money per dollar. Additionally, mobile money can reach extremely remote areas where there are no distribution channels.
Thomson Reuters Foundation reports the charity fund raising initiative of mobile phone operator Tigo and charity organization, Oxfam International in Guatemala to transfer money quickly and safely to provide for families affected by drought and malnutrition. The families were given a sim card and money was sent to their phones. It is reported that Oxfam has so far given $282,000 to 1700 families using mobile phones.
The recent typhoon of Philippines is another disaster which attracted fund raisers’ attention, where over 3000 died and thousands were left homeless. P2P (Person to Person) service provider Remitly, which specializes in transferring money to Philippines using mobile phones, did its best to raise funds to help. They raised money from all over the world and transferred the money to Philippines Red Cross for helping the homeless families.
The world pioneer of mobile money – Kenya – is also in the list. NGO named GiveDirectly launched a campaign to help raise funds to help poverty stricken families in Kenya and help in reaching remote areas with mobile transfers. Of course, they used the leading mobile transfer service M-Pesa. So, the recipient has to either visit a local M-Pesa agent to receive cash or use money from the mobile for making purchases. Poverty-Action.org reports that residents in Rarieda area in Kenya generally live on $1 a day and most of them do not have food in their homes for the next day.
Similarly, funds amounting to $190,000 were also raised in the US by the American Red Cross, in collaboration with Wireless Foundation after the hurricanes, where nearly 38000 people had contributed.
This is good use of the technology and it has certainly made a difference, as I have discussed in the above examples.
The number of people using mobile devices to handle financial business is staggering. Looking at checking account balances, moving money from savings to checking, and completing money transfers on a local, national, or international level have all become quite common. Thanks to technological advancements, almost anything is possible with a mobile device and good service provider.
With this being a fast growing trend, we wanted to take the opportunity to provide a few interesting facts that people may not be aware of. After reading this, anyone who has not yet moved to the next level of handling financial issues via phone might reconsider this as a viable option. Without doubt, the benefits of using a phone for transfers are quite impressive. These benefits include convenience, privacy, ease to use, fast service, and affordability.
Understanding the Basics
Cell phones have become such an important part of life that almost everyone owns at least one. According to the International Telecommunications Union, more than 5.3 billion mobile phone subscriptions exist but even more shocking is that this number is expected to increase significantly over the next five to ten years. Although communication is the primary reason people use mobile phones, technology has made it possible to accomplish many things never before thought possible.
Next to communication, mobile money transfers and remittances are also highly valued. Rather than process a payment through a bank or credit union, transfers can be made to an eCommerce merchant almost anywhere in the world with a credit or debit card, cell phone, and reputable transfer services company.
If wanted, money transfers could also be used to pay creditors, book travel arrangements, and much more. In addition to money being transferred for business purposes, this is a great service for individuals, who need to send money to family members or friends. Along with sending money, transfer services also make it possible for money to be received. Without questions, this already important service has a bright future.
Because this is an ever-changing financial service and due to ongoing advancements in mobile device technology, new information will always be available to share. However, we wanted to provide some interesting facts pertaining to mobile money transfers as they relate today.
o Although this type of service provides people with a convenient way to send money, it has also been proven beneficial to both financial and communication sectors in a variety of ways. For instances, money transfers completed using a cell phone along with “branchless banking” services help decrease the cost of remittances, increase savings potential, and generate an entirely new revenue stream for financial institutions but also telecommunication companies.
o Social and cultural practices play a key role in profitability potential associated with money transfers via cell phone
o Of all foreign countries, Kenya has achieved the greatest success, having secured over seven million subscribers since the rollout of Safaricom in 2007.
o In most cases, the offer of money transfer services via phone is intended to retain existing customers rather than attract new ones. Because no bank account is required for this particular service, the goal of financial institutions is to promote additional financial services to current customers. Companies through which mobile money transfers are completed hope to keep customers who use this and other financial services opposed to losing them to the competition.
o The most recent world financial crisis made officials aware that regulations were critical for protecting consumers but that there was also the need to be flexible enough for innovation and technology to continue pushing forward
o Although efficiency is a primary concern of companies through which money transfers are processed, privacy and security remain top concerns. Because of this, significant money and time have been invested into developing and implementing technology to prevent both cybercrime and money laundering risks.
o Even though there are fees associated with transferring money, these are significantly lower than fees associated with other payment methods
o Amazon and eBay account for the majority of purchases made using a cell phone for payment
o One specific area that experts predict will experience some of the fastest growth over the next several years is travel. Some people have cut back on travel due to fear of terroristic acts but this industry has started to see tremendous growth.
o By the end of 2012, approximately 215 million mobile device users will spend some $175 billion worldwide, more than a 60% increase over numbers from the prior year. However, within the next five years, these numbers are expected to climb to 448 million payment users and $617 billion, respectively.
o The somewhat low NFC transactions will not see growth for several years and SMS will remain the driving force behind mobile money transfers in developing countries. However, for North American and European countries, most money transfers will be made through Mobile Web.
o Digital type merchandise is purchased most often using credit and debit cards for mobile money transfers
You can send money online through your computer, or, more often nowadays, through your cell phone. When you compare the money transfer process for computers and cell phones, you find certain common risks and benefits.
However, there are also unique aspects of handling finances using a cell phone, which is why it is so important to learn about necessary precautionary measures. Although people have been using mobile devices to transfer money for years, there are still questions and concerns raised.
The first thing we wanted to address is the benefits of money transfers whether using a computer or cell phone. Sending and receiving money has also been an option for years although initially, it was businesses that took advantage of this service.
However, there are now just as many individuals completing money transfers as there are businesses thanks to the increase of eCommerce websites, as well as auction sites such as eBay, but also high-tech mobile devices.
Before the potential risks associated with mobile money transfers can be fully understood or appreciated, we felt it important to provide a few of the key benefits that a service such as this provides.
Ease of Use – While some systems can be a little challenging to navigate, most are extremely easy. In fact, sending and/or receiving money can usually be done in about five or six simple steps, whether using a computer or phone. o Fast – Most people are surprised at how fast most transfer services are, especially compared to similar services provided by a more conventional financial institution. While it could take slightly longer for an international transaction to complete over one on a national level, the process overall is quick and seamless.
Exchange Rates – Another benefit of using mobile money transfers or those with a computer for international business is that exchange rates are quoted in real time.
Low Fees – It is common for fees to be charged with any money transfer. For example, companies have a standard processing fee for services rendered but in addition, any intermediary or foreign bank involved in the transaction could also impose a fee. However, even with fees being charged, money transfers are cost-efficient compared to other means of sending and receiving money.
Safe – Typically, companies that offer money transfer services have the latest and greatest security measures in place. After all, if customers begin to experience loss, the company would fail so everything possible would be done to protect a person’s information and ensure every transaction completes as scheduled.
Two of the greatest benefits specific to mobile money transfers only are privacy and mobility. By using a cell phone, money transfers and other financial tasks can be performed at home in privacy and comfort. Because so many people work hard to protect personal and financial information but also due to an increased risk for identity theft, having the ability to complete financial business at home is appealing.
The second benefit of flexibility is something that people also appreciates. With this, a financial transaction could be completed while in public without anyone knowing. As an example, using a mobile device, an individual could send or receive money while at dinner, in a business meeting, or sitting in a movie theater, among other things and again, with on one nearby being the wiser.
Along with all the benefits that go hand-in-hand with mobile money transfers are some risks that need to be considered. The following risks are just a few of the things that could go wrong with mobile money transfers.
Handset Incompatibility – To complete financial transactions via mobile device, the handset must be compatible with the service. Today, virtually every telecommunication company sells one or more phones capable of handling money transfers but an individual should check requirements for any company being considered for a service such as this prior to a transaction being started. o Network Coverage – The mobile network would need to be capable of handling a significant amount of traffic but also provide high speed service. Although not an issue in North America, there could be challenges when trying to send or receive money in developing countries.
Hackers – Even with state-of-the-art security measures in place, there are still professional hackers that tap into cell phones to capture all types of information to include both personal and financial.
Fraud – Scam artists recognize the increase of mobile money transfers and as such, have devised new schemes to con people out of money. Unfortunately, people still get caught up in fraudulent acts every day even with all the education provided to the public.
Lost Device – The bottom line is that it is much easier to lose a cell phone than it is a computer. Mobile device owners are always reminded to use or install the most current software to block access to financial websites but also keep personal information locked or hidden. Even taking all the precautionary measures possible, a lost device could end up in the hands of the wrong person.