Belgacom ICS to launch GSMA approved international M-money services called Home Send for mobile carriers this summer
With national M-money services spreading out across the continent, the time is ripe for a service targeted at the international remittance market. Belgacom ICS is one of three GSMA approved providers and has a service called Home Send. It is currently trialling it with a North African operator and plans to publicly launch it this summer. Meanwhile Zain is seeking to expand its Zap service in a similar way to its One World roaming service but is only in the early stages. Russell Southwood talked to Belgacom ICS last week about its plans.
For several years the holy grail of M-money services has been to devise a product that can be used to pay international remittances from those in the diaspora globally to their home countries. The market is currently estimated to be worth US$375 billion globally, a figure which it is estimated will nearly double to US$700 billion by 2012. Among the top ten developing countries receiving remittances are Nigeria (US$10 billion) and Egypt (US$9.5 billion).
Current charges are 4-5% of money sent through banks and up to 15% when using money transfer organisations. Because of these charges, it is estimated that 50% of remittances go through informal channels. Belgacom ICS reckons that by lowering the transaction fees to 2-5% it will be possible to address 50-70% of the market.
Home Send is one of three initiatives endorsed by the GSMA’s Mobile Money for the Unbanked initiative (the other two being Western Union and RBS/Visa) and is particularly interesting for Africa for two reasons. Firstly, it is mobile-centric and secondly, Belgacom ICS is probably the largest wholesale carrier for operators in Africa. Therefore, in terms of the latter, it has the connections and ability to become the hub through which carriers can interconnect their M-Money services: both between African countries and elsewhere internationally.
eServ Global is its technology partner and faciltator for the service. The company already has 80+ MNO customers worldwide in 50 countries. Belgacom acts as the Intermediary Payment Service Provider under the framework of European law.
According to Catherine Bals, Head of Marketing Communications, Belgacom ICS:”Home Send enables mobile wallets to talk to each other. It can talk to Safaricom’s M-Pesa, Zain’s Zap, MTN’s M-Money or Orange Money and transfer and receive funds.” The service is currently being trialled with an un-named North African operator.
Bals told us that although it had been asked for an exclusive deal by one large African mobile chain, it plans to roll it out across several operators in each market. For as Bals told us:”We are a one to many company.” It has signed a couple of agreements and plans to launch this summer.
It offers three key services to operators: airtime exchange (in other words, Kojo in London can send his Dad airtime to ring him); remittances and roaming recharges. The transactions made are transferred to the customers’ bank on a daily basis and the system shows charges transparently to the end user. In practical terms, these charges can also be split between Home Send as the facilitator and the intermediary.
As with all systems where a small charge is split between two people, this may prove a temporary sticking point. Nevertheless different percentage charges by country and any variation in national regulatory requirements can also be incorporated.
The only other publicly announced contenders in the mobile space are Vodafone’s international version of M-Pesa and Zain’s “roaming” version of its M-money product Zap (see On the Money below). Safaricom’s Pauline Vaughan told us in April this year that its service would be available “later this year.” And the story on the Zain’s ZAP product makes clear that it has only really started the discussions to create a service.
Meanwhile, progress is relatively slow for national M-Money systems. MTN Uganda announced that it had got 40,000 customers. The national billboard campaign shows the service helping customers in emergency situations do things like pay their rent before eviction or get money to pay a roadside mechanic.
The company is telling people in the industry to watch out for a big push shortly. Zain (see Web and Mobile Data News below) is claiming that 1 million customers have the Zap service on their menu. This figure is fairly meaningless and can only lead a sceptical person to conclude that they do not have enough actual users of the service to make a proper announcement.
Nevertheless, Kenya’s M-Pesa service took several months to take off. There are issues of trust and awareness of how the service works to be put in place in cash-using economies that take time. But the combination of connecting national customers to the diaspora looks set to provide some fairly spectacular growth ahead.