Vodafone and Citigroup Corporate and Investment Banking’s Global Transaction Services are to launch a Vodafone-branded mobile-based international money transfer service targeting the global remittance market worldwide. The new service will provide senders and receivers of money with a method for sending money home that is convenient, cost-effective, secure, transparent, and easy to use.
This comes after Vodafone’s recent pilot of the M-PESA mobile money transfer service by its affiliate in Kenya, Safaricom.
It is anticipated that Vodafone customers in the United Kingdom will have the first opportunity to use the service to send money to Kenya on a trial basis and both parties plan to launch commercially, with a focus on Eastern European and Asian markets, such as Poland and India, in the near future.
The product being developed will allow the remitter and the beneficiary to choose from a range of options as to how the money is sent and received. The sender can initiate the transfer using either a mobile phone or a secure Internet website to give instructions on where to send the funds. The funds will be able to be received in a bank or through the receiver’s mobile phone in the form of a voucher and secure PIN that will enable the receiver to redeem the cash at a wide range of outlets, typically the airtime distribution points operated by the in-country mobile network service provider. For these latter services, the beneficiary of funds does not need to have a bank account, will have a wide range of locations to collect the funds and only has to be in the possession of a mobile phone that can receive an SMS on any mobile network.
This initiative is thought to assist the flow of funds from migrant workers back to their families. Migrant remittance is an important source of income in many developing countries. For some individual recipient countries remittances can be as high as a third of GDP.
“This agreement with Citigroup has the potential to create a step change in global remittance services and one in which the mobile service provider plays a central role,” says Alan Harper, the Director for Group Strategy and New Business at Vodafone. “Vodafone’s international brand recognition and our successful trial of M-PESA in Kenya combined with Citigroup’s global remittance service and international financial reach, enables us to offer an extremely competitive product compared to conventional remittance solutions available today.”
“The combination of Vodafone’s international mobile network and Citigroup’s global footprint will create a solution that will benefit communities that use money transfer services worldwide,” adds Francesco Vanni d’Archirafi, the Region Head of Citigroup Global Transaction Services for Europe, Middle East and Africa and Chairman of Citibank Europe. “We are proud to be using our global distribution network and cross-border payment capabilities to provide migrant workers with a cheaper and more secure way of sending money.”