The formal global remittance market is set to rise from around US$300 Bn today to over $1 Tn in five years with the help of mobile communications, according to a report from GSMA. On 5th June 2014, Australian developer and operator of mobile payment services – mHITs – announced that its SMS mobile wallet service has launched an international mobile remittance corridor between Australia and M-Pesa, the leading mobile money service in Kenya.
“The mHITs Remit micro-remittance service allows people in Australian to send money safely and conveniently to partner mobile wallet operators in other countries simply by sending an SMS including GLOBE GCASH and SMART Money in the Philippines, MTN Mobile Money in Ghana and now M-PESA in Kenya” commented Harold Dimpel, CEO of mHITs. “Unlike traditional international remittance methods, the mHITs Remit service provides very low fees and instantaneous transfer of funds directly to a recipient’s mobile money account without requiring a transfer agent or bank,” he added.
- Reducing remittance commission charges by 2-5% could increase the flow of formal remittances by 50-70%, according to forecasts from the World Bank.
- This new corridor will provide – for the first time - instant & direct mobile-to-mobile funds transfers between Kenya and Australia.
- mHITS says that their service offers one of the lowest rates for remittance in the market with a 1st time transaction fee beginning at a mere $2.50.
- M-PESA is a leading mobile money transfer and payment service available from Kenya’s Safaricom and Vodafone.
- It offers a simple, low-cost as well as secure method for users to perform a cross section of monetary transactions with the help of a mobile device.
- Senders can seamlessly make a transaction from their mobile devices via mHITs at any time, and require only the mobile number of the recipient in order to send money.
- Recipients automatically receive an SMS notification as soon as funds are credited to their mobile money account.
- The recipient is allowed to access the funds immediately in a secure fashion through their mobile money account directly.
- However, depending upon their region, users can also withdraw funds in cash through an agent or ATM.
- Neither a bank account nor the location of a transfer agent is required by the recipient, in order to access funds.
mHITs is one of the first mobile money operators in the world to provide a micro-remittance service. Persons residing in the Outback can send money instantly and conveniently via mobile phone to their relatives as well as friends staying in Kenya by having funds credited immediately to their M-PESA mobile money account.
The M-PESA mobile service was launched in March 2007 by Safaricom Limited. This made Kenya the first country in the world to implement a successful mobile money transfer service. According to Vodafone, M-Pesa had approximately 16.8 million active customers as at 31 December 2013 and approximately 186,000 authorised agents worldwide. The company also says that its customers do over €900 Mn worth of P2P transactions every month.
On 31st March 2014, the company announced the launch of M-Pesa in Romania to enable nearly 6 Million of its citizens that mainly deal with cash transactions. Overall M-Pesa is being positioned by Vodafone as an emerging markets solution.
The addition of Romania continues the expansion of M-Pesa globally, following the launches in Egypt, India, Lesotho and Mozambique, over the last year.