The Consultative Group to Assist the Poor (CGAP), an independent microfinance center based at the World Bank, has partnered with the UK Department for International Development (DFID) to enhance efforts to use mobile phones and other technologies to increase access to basic financial services for the poor. DFID, with help from the Bill & Melinda Gates Foundation,  will provide GBP 8 million to the CGAP Technology Program.

"Giving people access to financial services can help them lift themselves out of poverty. I am therefore pleased that the DFID-supported Technology Program at CGAP will work to improve poor people's access to financial services such as payments, savings, loans, and insurance. The Program will also support the delivery of social protection payments in developing countries and make the transfer of international remittances cheaper and safer," said UK Minister for Development Gareth Thomas.

CGAP has provided financing and technical advice to projects with more than a dozen providers in Asia, Africa, and Latin America to develop innovative banking solutions, and conducted in-depth policy assessments of 13 countries.

Point of sale devices, ATMs and mobile phones, are progressively connecting poor people to the financial network. CGAP's project partners in India, Mongolia, Pakistan and the Philippines have created the world's first mobile phone-enabled savings accounts for the poor and underprivileged people who have not got any bank accounts.

"Savings is a highly neglected financial service available to the poor, and despite what most people may think, the poor do need a safe place to save money," said Amolo Ng'weno, deputy director at the Bill & Melinda Gates Foundation. "Mobile phones and other front-end technology solutions can bring low-cost financial services to poor people, giving them opportunities to build financial security and improve their lives."

These new developments further give weight to the prospect of mobile remittances rapidly becoming a reality in most parts of the world, with North Africa and SE Asia leading the way.

Xoom Corporation, the Internet-based global money transfer company, announced last week it is providing faster wire transfer service to major banks across the United Kingdom. Consumers from across the globe with access to the internet can now transmit money to any major bank in the United Kingdom in one business day. Xoom's is providing the immigrant and expatriate communities with an alternative remittance option that is fast, easy, convenient and low in price.

Xoom's online remittance service started in 2001 and it allows customers who have Internet access, a chequeing account or credit card (to fund the transaction) to send money to over 45 countries around the world.

"The only reason consumers don't use Xoom.com to wire money to the UK is that they don't know about the service," said Iain Allison, vice president of European business development for Xoom.com.

Xoom.com charges customers $4.99 to transfer any amount to the UK. Receiving banks in the UK do not charge a fee when money is sent using Xoom.com.

VoiceCash Group, a Munich based company specialising in International Mobile Money Transfer, enables mobile users to share money with family or friends abroad without a credit check.

VoiceCash Group is now providing bank services through tts subsidiary VoiceCash Bank Ltd. Accroding to VoiceCash Group CEO Michael Kramer, “Money transfers across international borders are one of the biggest growth markets and are emerging worldwide as a significant part of the economic development process. There are millions of people that have a mobile phone but don’t have a bank account. VoiceCash Bank is connecting individuals and domestic mobile payment initiatives via a mobile financial services roaming. VoiceCash Bank is the first of its kind, a pure mobile transaction bank.”

He further states, “With the VoiceCash Bank we are establishing new services worldwide in the international mobile money transfer sector, for example we can offer cellular phone companies, service partners, and even other banks the real possibility to offer new services to customers.”

VoiceCash offers a patented SMS and voice biometrics callback functionality, enabling mobile phone users to transfer funds and make payments in real-time. It has recently issued the first prepaid MasterCard Twin-Card for the German market. The two prepaid cards work together to enable the swift transfer of money internationally, allowing the remitter to transfer money to the beneficiary with ease. It enables cross-border mobile payment services and provides access to 28 million locations, where MasterCard is accepted. Beneficiaries can withdraw cash from 1.5 million ATMs worldwide.

At present, VoiceCash Bank is planning to introduce a salary card to meet the demands of the migrant workers dependent on prepaid cards in the Middle East. VoiceBank realises these workers do not have bank accounts in their respective native countries and their wages have to be paid in cash or by some form of prepaid card. VoiceCash Bank aims to offer simplified and cheaper mobile payment options in the near future.

Safaricom, a leading provider of converged communication solutions based in Kenya, is the first company in the world to offer a mobile based international money transfer service, whereby the beneficiaries living in Kenya - who have to register as M-PESA customers - can receive remittances sent from the UK directly onto their mobile phones in their M-PESA accounts. Kenyans living in the UK can now conveniently send money to family and friends through this innovative ‘mobile money transfer service.’

Western Union, Provident Capital Transfers and KenTv were the three agents involved in conducting this project for over three months.

Areas in the UK with high Kenyan population have forex agents, news agents and grocery shops which are money service businesses registered with HM Revenue & Customs. To send money using M-PESA, money senders or remitters in these areas are simply required to identify themselves and supply the agents with the beneficiaries’ names and mobile phone numbers, and the amounts being sent in Sterling Pounds.

A key benefit for customers is that there is no registration fee to either party for using M-PESA’s international service. Transaction fees are competitively priced, ranging from £4 to £7 depending on the transaction outlet used and the amount sent.

Safaricom plans to increase its branches in the UK. Currently, the maximum amount that can be sent internationally per transaction through M-PESA is £250. In Kenya, standard transaction limits and charges apply to the M-PESA account, including a maximum balance of Sh50, 000.

The mobile phone finally entering the remittance realm will undoubtedly open up new opportunities for service providers to offer even more innovative services to customers.

MoneyGram International signs contract with Itau Unibanco to add 1,000 locations in Brazil

Associated Press
10/06/09 10:50 AM EDT

MINNEAPOLIS — Money transfer service MoneyGram International on Tuesday said it signed a multiyear contract with Brazil's largest private-sector bank to add 1,000 agent locations in that country.

The terms of the contract were not disclosed.

MoneyGram services will be added in phases to 1,000 locations of Itau Unibanco as part of the bank's plans to combine Banco Itau and Unibanco. In November, the banks announced plans to merge creating Itau Unibanco, which has combined assets of roughly 575.1 billion reals ($261.4 billion).

The Minneapolis-based company said remittances play a large role in Brazil's economy, with more than $7 billion sent into the country last year by 4 million Brazilians living abroad.

In morning trading, MoneyGram shares added 10 cents, or 3.4 percent, to $3.04. The stock has traded between 80 cents and $3.43 in the past 52 weeks.

American Depositary Shares of Itau Unibanco gained 28 cents to $21.10.

The central bank of the Philippines, Bangko Sentral ng Pilipinas (BSP) has said that its conservative estimates for remittance growth this year are up to three percent.  Amando M. Tetangco Jr. governor of BSP noted that increases in remittance since January this year, and the improvements in the global economies have "affirmed the positive outlook for steady remittance for 2009".

Bank of the Philippine Islands (BPI) were even more positive annourcing that they expect their remittance business to expand with high single-digit levels of growth this year.  It hopes to achieve this through their expanding links to banks and remittance companies in the middle-east.

This has been a timely expansion for BPI as the numbers of Filipino migrant workers going to the middle-east has been steadily increasing.

President of BPI Direct Savings Bank Raul Marcelo de Leon was very positive about this saying, "we even see the remittance business for BPI growing by over 10 percent this year."

These statements were backed up with figures for the first half of 2009 showing an increase of 2.9 percent to $8.5 billion.

BSP showed an increase in remittances made by sea-based Filipinos have grown by 4.5 percent whilst those in land-based jobs increased their remittances by 2.5  percent.

At a recent meeting of the G8, the member countries pledged to reduce fees for money transfer by half by 2014.

The G8 have estimated that this would lead to an additional $12 - $15 billion US dollars reaching beneficiaries and thereby benefitting the local economies.

This action is part of a plan to increase aid to developing countries without raising additional funds from donors.

Fees currently run at anything between 5% and 20% or more depending on where the money is being sent to.  Countries where smaller volumes are sent tend to be more expensive to cover the costs in doing the transfer that are not  being offset by greater volumes.

It is hoped that this move will help bolster declining remittance volumes in the current economic climate.  Since foreign remittance can often be the primary source of income in many families, reduced remittance can cause real hardships.

Increased remittance is sent as an excellent form of aid as it reaches the poor directly without the bureaucracy and potential corruption when it is sent through governments and NGOs.

Not all voices have been positive about this announcement.  Some industry insiders have commented that the remitter is more likely to keep the money saved on fees rather than send more money to their loved ones.

Banks are increasingly trying to enter the Middle-East remittance market as they see a growing market, especially to India.

Despite the global economic downturn, Western Union have seen an increase in remittance to India, and banks are seeing this as an opportunity to improve their earnings.

Bank of Baroda have launched a new remittance service to India which is unique in the Gulf countries for being the first bank to offer such services on Friday, the local weekend.

Friday's are often the only day workers get a day off each week, especially those from India, and this service will help Bank of Baroda win market share in this highly competitive business.

Saudi's National Commerce Bank recently signed a deal with Money Gram to provide remittance services through all its branches.  With an estimated $17billion per year remittance sent by expatriates, this a significant new market to enter.

Non-banking groups have also been trying their hand in the remittance markets of the Gulf countries.

The South Indian Muthoot Group is opening its first Branch in Dubai and a further 400 branches in India to add to its existing network of 1100 outlets.  They are currently awaiting approval from the UAE Central Bank before they start trading.

Lulu supermarkets owner Emke Group is in the process of opening money exchanges inside their supermarkets.  They have already recruited senior staff, and are awaiting central bank approval.

Established money remittance business Joy Aluka Group are in the process of selling this division to a Kuwaiti group, further giving weight to the buoyancy of the remittance market.