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Money transfers by text message: A new service begins
By Thomas Crampton Published: June 17, 2007
Paris: Sending money to a faraway friend or relative may someday be as easy as typing out a text message on your cellphone.
Anam, a Dublin-based company that has specialized in new styles of cellphone messages, on Monday begins offering a service they say could revolutionize money transfers.
The service allows users to choose a name from their mobile phone address book, type in "cash" with the amount to be sent and press "send" for a transfer to be made from their bank account to another person's bank account.
An automated system calls the sender to confirm the person and amount being sent and, if confirmed, a text message is sent to inform the recipient that the money is on its way.
While such a service could be useful for anyone who has run short of cash while sharing a restaurant bill, the real target group for Anam is immigrant workers who send money home.
The market for overseas remittances is substantial. A study by the World Bank estimates that overseas workers from developing countries sent more than $72.3 billion back to their home countries in 2001.
"Our system is intended to allow people to cut back on trips to money transfer outlets," said Jote Bassi, the marketing director of Anam. "This system offers tremendous convenience, and there is no reason why the operators and banks involved could not undercut the current channels for money transferring."
Using technology to ease international money transfers has been a dream for many and become a business for some.
Custom House, the Canada-based Web site, has created a specialized service able to charge significantly less than traditional banks or Western Union since it has no physical outlets.
But there are many hurdles along the way.
Any system that sends money across borders needs to deal with regulations set up to restrict money laundering and the financing of terrorism.
For Anam's system to work, the company needs mobile telephone network operators to buy the system and banks that agree to cooperate.
The operators must install Anam's technology, and the banks must be open to integrating the system with their own money-transfer methods.
Anam's sales pitch to network operators is that by offering the value-added service of money transfers, mobile phone customers will be less likely to switch their phone company. Cutting down on the churn of customers is a major concern for many operators.
Other value-added text-messaging services being developed by Anam include a system that allows operators to reduce phone bills by having customers agree to receive advertisements via text message.
Still another is intended to control the text messages sent and received by a mobile phone.
This could be useful for parents concerned about excess use of messaging by their children or companies wishing to control costs by limiting the number of messages sent out by employees.
For all the technical marvels that companies may develop, however, the greatest challenge faced by anyone trying to offer money-transfer services are not related to technology, said Christophe Uzurea, a Hong Kong-based analyst in banking advisory services at the research firm Gartner.
"The first challenge is not technology, it is the very human building of relationships with banks," Uzurea said. "Banks are very much aware of the need to create new services, but they are notoriously difficult to sign up on a new and untested system."
Another issue Anam will face is the growing number of organizations looking to meet the money-transfer needs of the world's immigrant population.
In addition to services being developed by those already serving the immigrant populations, Internet-based money-transfer companies like Paypal are already developing impressive systems, Uzurea said.
"It certainly is possible to make a smoother mobile phone-based payment system than Paypal's current offering, but Anam is also trying to create a new market," Uzurea said. "In trying to convert existing Internet customers into mobile users, Paypal's objective is much easier."
The real challenge arises on the ground level, however, Uzurea said.
"When you target immigrant populations, it is extremely difficult to reach them and convince them to trust your new service," Uzurea said. "These are usually people who do not really trust banks in the first place."
For more information please contact:
Patrick Smith
Sonus PR
anam@sonuspr.com
+44 20 7851 4890
