The GSM Association (GSMA, the global trade association of mobile operators) and Mastercard are piloting the scheme with the help of 19 mobile operators covering networks in 100 countries and 600 million customers. The scheme's aim is to make international transfers more affordable and to reach out to those left out by the banking system.
The remittance market is currently worth $230 billion a year and the GSMA expects this could quadruple by 2012 and benefit some 1.5 billion people worldwide. India, the world's fastest-growing mobile phone services market, is also the biggest recipient of overseas remittances in the world (about 10% of the market). Projects launched in rural Himalayan areas have proved very successful. Other pilots are taking place in the Philippines and Bahrain.
"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," says Napoleon Nazareno, CEO of Smart Communications, a Filipino firm taking part in the GSMA initiative.
The scheme has been identified by several development agencies as a way to alleviate poverty and end rural communities' economic isolation. "We are mobilising financial services for the billions of people who are unbanked and the underbanked," concludes Rob Conway, the CEO of the GSMA.
Review by Emilie Filou