Groups Partner to Make Sending Money by Phone Easier

For many around the world - especially in developing countries - receiving or sending money abroad has become increasingly important, evidenced by the rise in popularity of secure global networks for money transfer services at local merchants with physical storefront locations.

The use of cell phones for such services could increase convenience and uptake of both wireless devices and the transaction systems that run on them.

A pilot program announced Monday between financial services company MasterCard Worldwide and cell phone group GSM Association, spearheaded by 19 mobile operators with networks in over 100 countries, will explore the possibility of securely making international transfers by cell phone to emerging economies in a move that could affect a growing number of migrant workers around the world.

Cell phone use in developing countries is quickly accelerating. Expensive landlines have been quickly surpassed by cheaper wireless cell networks.

Meanwhile, international payments through formal channels are also on the rise. The World Bank estimates that such remittances totaled $257 million in 2005, with informal channel transfers being nearly equal.

Both groups involved in the pilot program stand to reap big benefits from the partnership should it prove successful.

For the association of mobile operators, success would expand the adoption of GSM cell phones. International telecoms are already looking to emerging markets to boost growth, as developed nations are expected to see a substantial slowdown in new mobile subscribers.

For MasterCard - which will use its MoneySend service for the pilot - and for the company's competitors, there could be a substantial increase in the number wireless customers for payment services.

The GSM Association estimates that the program could boost remittances to more than 1.5 billion and quadruple international remittances to more than $1 trillion by 2012.