The mobile communication channel has proven to enable the development of financial services in a way that is not dependent upon the existing traditional commercial infrastructure in a country.
Key benefits are all associated with the ability to provide new services while avoiding the usual investment in establishing physical banking facilities -- particularly in emerging markets and developing nations.
As a result, international remittances via mobile phones will exceed $10 billion for the first time this year, according to the latest global market study by Juniper Research.
However, their comprehensive assessment found that the cost and complexity of regulating cash transfers had led many mobile network service providers to focus exclusively on airtime top-ups.
According to Juniper, only a handful of players -- such as eServGlobal HomeSend, along with established money transfer organizations Western Union and Moneygram -- were seeing significant traction on mobile devices.
In many cases, the early cash transfer service providers have failed to establish a critical mass of mobile wallets in recipient markets, reducing the opportunity for inbound remittance.
Primary Market Entry Barriers to Overcome
Juniper claims that regulatory complexity -- and other forms of government intervention, such as new taxes -- remains the primary hurdle for most mobile network service providers that attempt deployment in new markets.
"Service providers must first obtain licences for each remittance corridor; they face due diligence and risk assessment checks, which may in turn oblige them to introduce additional mechanisms to address any issues which emerge. All these processes are time consuming and expensive," said Dr Windsor Holden, research director at Juniper Research.
But while international cash remittance growth has been somewhat slow, transaction volumes have surged in the mobile network airtime top-up market, where service providers are not required to obtain money licences.
The report found that average annual airtime top-ups across key remittance corridors were in excess of average individual mobile spend levels in receiving countries, thereby covering recipient telecommunications bills for the year.
Other key findings from the market study include:
Key benefits are all associated with the ability to provide new services while avoiding the usual investment in establishing physical banking facilities -- particularly in emerging markets and developing nations.
As a result, international remittances via mobile phones will exceed $10 billion for the first time this year, according to the latest global market study by Juniper Research.
However, their comprehensive assessment found that the cost and complexity of regulating cash transfers had led many mobile network service providers to focus exclusively on airtime top-ups.
According to Juniper, only a handful of players -- such as eServGlobal HomeSend, along with established money transfer organizations Western Union and Moneygram -- were seeing significant traction on mobile devices.
In many cases, the early cash transfer service providers have failed to establish a critical mass of mobile wallets in recipient markets, reducing the opportunity for inbound remittance.
Primary Market Entry Barriers to Overcome
Juniper claims that regulatory complexity -- and other forms of government intervention, such as new taxes -- remains the primary hurdle for most mobile network service providers that attempt deployment in new markets.
"Service providers must first obtain licences for each remittance corridor; they face due diligence and risk assessment checks, which may in turn oblige them to introduce additional mechanisms to address any issues which emerge. All these processes are time consuming and expensive," said Dr Windsor Holden, research director at Juniper Research.
But while international cash remittance growth has been somewhat slow, transaction volumes have surged in the mobile network airtime top-up market, where service providers are not required to obtain money licences.
The report found that average annual airtime top-ups across key remittance corridors were in excess of average individual mobile spend levels in receiving countries, thereby covering recipient telecommunications bills for the year.
Other key findings from the market study include:
- Nearly 400 million mobile phone users worldwide are expected to use their handsets for mobile money transfer by 2018.
- Mobile money taxes in sub-Saharan Africa are threatening the growth of domestic money transfer services.