Pilot program for mobile money transfer

MasterCard Worldwide and the GSM Association (GSMA) are to pilot a program to make international person to person money transfer much simpler. The program is aimed at the people who lack access to traditional banking services. The two organisations will try to find a way to help people working in certain countries transfer funds to relatives in their home countries quickly, easily and securely with the use of mobile payments technology.

It is estimated that some five billion people around the world lack access to traditional financial services. In some cases this is because of lack of ATMs and bank branches, poor regulation, lack of financial literacy or other weaknesses in infrastructure. Meanwhile, international remittances from immigrant and expatriate employees are a significant market, estimated at $257 billion in 2005. And it is estimated that informal remittances make up a similar amount.

In the six month pilot, the organisations will focus on person to person money transfers in areas where people regularly send money home. It is envisaged that the recipients of funds will get a text message to notify them of funds and they will be able to access those funds through debit and prepaid accounts in local banks.

MasterCard is to provide payment card products and international transaction switching, clearing and settlement. The MasterCard global processing platform can process transactions in 210 countries and 160 different currencies. It can also switch its part of the transaction in as little as 120 milliseconds which will speed up payments for recipients. GSMA represents more than 700 mobile phone operators worldwide and will work with local or regional banks to deliver the service.

MasterCard’s president of Global Technology and Applications, Roy Dunbar, comments: ‘ This pilot provides a unique opportunity to test the use of our global payments products and platform to help create access to the global economy for people facing barriers to participation. We look forward to working with the GSM Association and its member operators in local markets, along with financial institutions, to assess how we can bring much needed payment and money transfer alternatives to the vast community of underbanked–as well as all consumers wishing to transfer money internationally.’