Easier payments on way for migrants from Mastercard/GSMA

A pilot programme aims to tap mobile technology to help the world's 200 million international migrant workers,  many of whom don't have bank accounts, send remittances to their dependents easily and securely. Spearheaded by 19 mobile operators in over 100 countries and representing over 600 million customers, the programme has ambitious aims... Launching their programme in pilot form, the GSM Association aims to tap the ubiquity and ease-of-use of mobile communications in order to aid the international migrant worker community to easily and securely send remittances to their dependents, many of whom do not have bank accounts. By exploiting the extensive reach of the mobile networks, the programme will complement existing local remittances channels and make transferring money internationally significantly more affordable for a group of people numbering almost 200 million globally.

Spearheaded by a special group of 19 mobile operators with networks in over 100 countries and representing over 600 million customers, the GSMA believes the programme could double the number of recipients of international remittances to more than 1.5 billion, while helping to quadruple the size of the international remittances market to more than US$1 trillion by 2012.

Therefore, to combine the strengths of the mobile and financial ecosystems, mobile operators are partnering with banks both local and regionally, while the GSMA is also setting up a pilot with MasterCard Worldwide. The latter has a 25,000 member-bank network, and both parties plan to pilot a global hub that will link together national markets and the local payment systems run by mobile operators in partnership with those local banks. The hub will enable migrant workers to trigger international money transfers and to notify their families, both via their mobile phones.

"The creation of a global hub will enable the mobile networks, which now cover more than 80% of the world's population, to offer the world's burgeoning migrant population a convenient way to securely and cost-effectively transfer money to their families back in their home countries," stated Rob Conway, GSMA CEO. "We are mobilising financial services for the billions of people who are the unbanked and the underbanked."

For MasterCard, Roy Dunbar, President, Global Technology and Operations, said: "In its pivotal role at the heart of commerce, MasterCard has always been committed to harnessing its payment card products and advanced technology to help drive innovation, pioneer new forms of payment and help steer the future of global commerce.

"This pilot provides a unique opportunity to use our global payments products and platform to help open up new business opportunities in developing countries. We look forward to working with local markets and partners to bring much needed payment and money transfer alternatives to the vast community of the underbanked - as well as all consumers wishing to transfer money internationally."

Support from Asia and the Middle East

India is both the world's fastest growing mobile services market and the biggest recipient of overseas remittances in the world, accounting for around 10% of the world market. Therefore, two senior executives in this market have lent their support.

"We believe that this coming together of the mobile and banking industry is a giant leap in mobile commerce," said Sunil Bharti Mittal, Chairman & Managing Director, Bharti Airtel and Board Member of the GSM Association. "It will revolutionise the money transfer industry with its advantages, such as reach, ease of use, and lower transaction costs and provide immense benefits to people in developing nations such as India."

O P Bhat, Chairman, State Bank of India, India's largest bank, added: "We are happy to partner with the GSM Association in this landmark project. We piloted a project in the small Himalayan village of Pithoragarh in India with Airtel and have seen the tremendous results in this unbanked village. This project has the potential of transforming lives and economies across the globe."

Smart Communications of the Philippines, another participant in the programme, plans to launch several pilot projects in collaboration with mobile phone operators and banks in Bahrain, Italy and other countries hosting large Filipino migrant populations. In Bahrain, for example, Smart will work in partnership with MTC Vodafone Bahrain and a leading bank in the Middle East. Through the Smart Services Hub, Filipino migrants and contract workers can remit funds back to the Philippines conveniently and affordably using their mobile phones. Smart also sees the need for a global hub that will be interoperable with the Smart Services Hub. As part of the GSMA programme, Smart plans to launch a pilot project with MasterCard as an authorisation, clearing and settlement partner.

In the words of Napoleon L Nazareno, Smart President and CEO: "Aside from lowering costs, we shall provide Filipinos overseas with greater control over the manner in which their remittances are transmitted and used back home - enabling them to send funds in the amounts of their choice, whenever they want, wherever they are."

International remittances, which total more than US$230 billion a year, are already a major source of income for many developing countries and a very important factor in their economic development: "The programme will resonate with governments because it makes the international payment market more transparent, encourages financial inclusion, reduces crime and boosts the flow of hard currency into their countries," added Rob Conway.

The GSMA will also be working with CGAP (the Consultative Group to Assist the Poor), a micro-finance group housed at the World Bank, and the UK Government's Department for International Development to conduct a survey of the regulatory environment in about 20 countries, as a precursor to discussions with regulators in these countries about creating the optimum regulatory framework for money transfer and eventually mobile banking and mobile commerce.

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