Western Union joins in GSMA remittances project
Earlier this year, in February, after the 3GSM World Congress, the GSMA announced its intention to launch a remittances-dedicated international money transfer system in a partnership with MasterCard (cf. Smart Insights #07-08). This had been seen as an attempt by the telecom operators to try and hunt on Western Union grounds, as Western Union is the long-standing leader on the worldwide remittances market, often criticized by migrant workers for its expensive fees (cf. SI #07-40).
Now, Western Union and the GSMA are developing "Mobile Money Transfer program", a commercial and technical framework that mobile operators can use to deploy services that enable consumers to send and receive low-denomination, high-frequency money transfers using their mobile phones. The objective is to make it simple, quick and affordable for more people to send small amounts of money through a conventional and regulated system. Commercial roll-out is expected by the second quarter of 2008. According to a recent ABI Research study, the mobile money transfer market is to represent US$ 8 billion (EUR 5.6 billion) in revenue by 2012 (cf. Convergence section below).
35 operators with more than 800 million customers in more than 100 countries are participating in the GSMA Mobile Money Transfer program. Led by Sunil Mittal, the Chairman and Managing Director of Bharti Airtel, the Mobile Money Transfer program is overseen by a steering committee made up of representatives from Bharti, MTN, Orange, Orascom, Smart, Telenor and VimpelCom.
Western Union is the most widely recognized brand for international money transfers, with a network of more than 312,000 agent locations in over 200 countries and territories. Western Union revenue was US$ 4.5 billion (EUR 3.2 billion) in 2006, a 12% increase vs. 2005, generating a net income of US$ 914 million (EUR 643 million), a 10% increase vs. 2006.