Big jump in remittances on mobile devices

Peter Dinham
Friday, 09 December 2011 14:50

IT Industry - Market

International remittances via mobile devices are rising rapidly with predictions of explosive growth over the next five years, with the value of the remittances jumping from less than $12 million this year to $55 million by 2016.

A new report from Juniper Research shows that growth is currently being led by mobile remittances sent across established migration corridors such as the US-Mexico and intra-regional transfers across Africa and the Middle East, as migrant workers send money back home from foreign countries. However, Juniper predicts that substantial inter/intra-regional activity from and within Western Europe will see the region account for the largest remittance volumes by the end of the 2016.

According to report author, Dr Windsor Holden, in markets with low literacy levels, money transfer applications on the handset based around easily recognisable icons 'may gain a far wider usage than services based around text-based menus.'

The report - Mobile Money Transfer & Remittances: Business Models & Monetisation Opportunities - also highlights the opportunity presented in the medium term by the 'trickle-down' of smartphone features and functionality into mass market feature phones, such as touchscreen interfaces, apps and Internet access.

Dr Holden says that service deployments are expected to gain impetus with the increased utilisation of multilateral hubs between MNOs and third parties, which connect both sending and receiving channels on a single platform. 'This in turn reduces the time to deployment, as each MNO is required to connect to a hub only once to send/receive remittances and does not have to spend additional time on agreements.'

However, Dr Holden cautions that the lack of regulatory engagement with service providers in many jurisdictions continues to 'inhibit service deployment and adoption of both domestic and international remittance services.'

Other findings from the Juniper report include:

'¢    Service providers should introduce lower commission rates and flexible pricing structures to generate greater service uptake.

'¢    Potential service users are being deterred in many markets by limited or poorly trained local  agent networks.

The whitepaper, 'Moving Money Via Mobile', is available to download from the Juniper website together with further details of the full report.