Word today that Western Union, the global money transfer service, is increasing its profile in the United States when it comes to selling new ways to send and receive money. This is just the latest in a series of steps Western Union has taken to get more involved in mobile services, which have grown exponentially in places like the Philippines and Kenya but have been less quick to catch on in markets where banking services are well-developed, such as the United States. The service will initially seek to reach Latino immigrants who are among the 40 million people in the US who lack access to basic banking services. How will it work? The Wall Street Journal explains:
To use the service, people go to one of RadioShack's more than 4,000 stores and sign up for a Trumpet prepaid phone, which is required under the program. Customers can then load up to $200 onto their phones for cash transfer via Western Union's network either within the U.S. or internationally.
CGAP has found in its research that customer take-up of new services on mobile handsets depends on having the simplest possible sign-up experience. Another big challenge: getting the right regulatory balance. All of that is on the agenda in Cairo next month, at the Mobile Money Summit, a two day conference organized by CGAP, DFID, the GSM Association and IFC. Drop me a line if you want to know more about that.
What isn't in today's story about mobile remittances? While there's no question that immigrant money transfers are huge for many economies (nearly $24 billion annually just in Mexico), this still falls far short of having a developed financial sector with a broad range of affordable services - including savings and appropriate credit products.