Mobile Remittances: $55 Billion in 2016, or More?

Nearly $55 billion in international remittances will be sent using or received on mobile devices in 2016, up from less than $12 billion this year, Juniper Research now predicts.


Growth is currently being led by mobile remittances sent across established migration corridors such as the United States and Mexico, as well as intra-regional transfers across Africa and the Middle East, as migrant workers send money back home from foreign countries.

Mobile remittance forecast by Celent

However, substantial inter-regional and intra-regional activity from and within Western Europe will see this region account for the largest remittance volumes by the end of the forecast period. $55 billion in mobile remittances by 2016


In 2008, Celent estimated that remittances were sent by some 150 million people on a regular basis. By 2050, the number of immigrants worldwide is expected to increase to 280 million, leading to greater remittance volumes and transactions.

In 2006, formal and informal remittances were estimated to be around $450 billion, Celent estimated at the time. Big remittance market 

One of the big issues is how much share mobile remittances can take of the total remittance market. 

Mobile Wallet or Mobile Payment: What Wins in South Africa?

Sparring between contestants in competitive markets is not unusual. Neither are arguments that one or another approaches will not work, or that some approaches are "better." So it isn't unusual that a provider of one method argues the other methods "won't work" in a particular market


Standard Bank operates its own virtual currency "mimoney," which consists of a voucher number delivered to the recipient's cell phone using a text message. SMS. The bank has also teamed up with retailer Spar on a peer-to-peer money transfer service, in which SMS vouchers are redeemed at Spar stores throughout the country. 

Explosive growth in pre-paid money vouchers in South Africa has killed the mobile wallet as a viable payment instrument, says Herman Singh, CEO of Beyond Payments, a unit of Standard Bank.


Singh says that over R100 billion is generated in sales of prepaid airtime and electricity annually, while over 2.5 million money vouchers valued at over R4050 each, are created and redeemed every month in South Africa.

There are a couple of noteworthy angles here, including the use of a virtual currency mechanism and simple text messaging for communications, as well as the prepaid method of payment.

There is, to be sure, a clear argument that the leading developments in developed markets now are different than in developing markets. Mobile wallets and retail payments are bigger in developed markets because "banking and payments" are not "problems," while in developing markets these are key issues.

Likewise, the preferred communication technologies in developed markets are different from developing markets. Text messaging is ubiquitous for users of feature phones that are typical in developing markets. Other technologies are feasible in developed markets where smart phones rapidly are becoming the norm.

As a rule, mobile commerce, including both mobile payments and mobile wallet components, is a bigger issue in developed regions, while mobile banking--in particular remote payment--is a bigger opportunity in developing regions.

Pre-paid vouchers displace mobile wallet demand in South Africa

Mobile Operator Econet Wireless Launches Mobile Banking Service

Zimbabwean mobile operator, Econet Wireless has launched its mobile money transfer service, Eco-Cash.

Strive Masiyiwa, Econet Wireless Founder 

Eco-Cash officially was launched on 30 September 2011.

According to SWRadioAfrica, Econet, which has a subscriber base of more than 5 million customers, launched this service last week. Information on its website says the mobile cash transfer facility does not mean a subscriber has to open a bank account.

The new service will allow users to send and receive money, buy airtime, and make other payments using their mobile phones. Customers using EcoCash can also move money across different Zimbabwean mobile networks.

Econet Wireless launches mobile banking

Rogers Communications Seeks Bank Status

Rogers Communications has applied to become a bank under the Canadian federal Bank Act. If approved, the proposed "Rogers Bank" will focus mainly on credit, payment and charge card services. In one sense, the move is similar to any other large retail brand creating a branded charge card.

In other ways the move is more significant. Large tier-one service providers might start to find they cannot gain significant revenue growth without moving into adjacent businesses of some size and scope, already dominated by other providers. To be sure, Rogers is proceeding carefully.

"We have no plans to become a full-service deposit-taking financial institution," Rogers Public Affairs Manager Carly Suppa said. "The license, if granted, would give us the flexibility to pursue a niche credit card opportunity to our customers should this make sense at a future date."

In other words, Rogers doesn't want to become a full-fledged retail bank. But becoming a credit card issuer does set Rogers up for a smooth transition to becoming a mobile payments provider in the future.
Credit cards present a distinct opportunity for Rogers to expand its reach, as the media, cable and wireless giant also owns the Toronto Blue Jays and has direct relationships with millions of customers, including many who pay bills using credit or direct-deposit accounts. So there is an incremental opportunity to capture some of the current transaction revenue, at the very least.

Beyond that, analysts say the company can build a broader card business by leveraging those relationships to market its brand of cards, especially by reaching out to customers who have good credit standing in its database. That would create a new revenue stream for the broader number of retail transactions for which its customers use credit cards. Rogers to become a bank

The move by Rogers is highly significant, as it illustrates an important point about where large tier-one providers must look for revenue growth. For an organization such as Rogers, which might book $12 billion in 2011 revenue, even interesting new lines of business that produce scores of millions to hundreds of millions worth of new revenue are too small to "move the needle" overall.

The problem is even worse for organizations such as AT&T or Verizon that book $30 billion to $40 billion a year in revenue. Simply put, there are few realistic new lines of business large enough to matter. That is why you hear so much about machine-to-machine communications, mobile advertising, mobile banking and enterprise-oriented cloud services. Each of those businesses could, in principle, produce $1 billion a year in incremental revenue for any single contestant in a national market.

Keep in mind the scale requirements. A business has to be big enough to produce $1 billion in incremental revenue for each contestant that wishes to compete in the business. By definition, any new line of business must be capable of generating global revenue in the scores of billions of dollars.

To repeat, Rogers will become a bank. It will do so because even "mobile payments" might not produce enough incremental revenue to be interesting. Instead, Rogers will have to explore ways to earn incremental revenue in a range of traditional banking services that match its capabilities in mobile services.

There are some obvious implications. Isis, the joint venture between AT&T, Verizon Wireless and T-Mobile USA, has shifted from a "mobile payments" to a "mobile wallet" focus. The implication is that Isis has decided it does not have time nor money to challenge Visa and MasterCard directly, which it was its original plan.

Even though that is an arguably wise move, the point remains that even a mobile wallet model might not produce revenue large enough to matter. That is not to say a wallet effort could not do so, but that it would have to create a huge advertising ecosystem.

At some point, even Isis might have to consider whether it must become a bank, or that its partners separately might have to become banks. That would still leave them as partners with Visa and MasterCard. But it would not allow Isis to completely avoid all conflict with banks.

Many service providers outside the United States probably are "running the numbers" and coming to similar conclusions.

Rogers applies to become a bank

Mobile Money Could Be 5% of Africa Mobile Operator Revenue in 2015

As of September 2010, at least 19 countries in sub-Saharan Africa and North Africa had "mobile money" service available, according to Pyramid Research, which forecasts that by the year 2015, revenue generated from mobile money services could represent around five percent of total operator revenue on the continent. 

read more here