The value of international money transfers made via mobile phones will exceed $10bn for the first time this year, according to Juniper Research.
However, the cost and complexity of regulating cash transfer has led many service providers to focus exclusively on airtime top ups, the research firm reported.
According to the report released this week, only a handful of players, including established
money transfer organisations Western Union, Moneygram and eServGlobals HomeSend, were seeing significant traction on mobile.
The Juniper report argued that in many cases, early service providers had failed to establish a critical mass of mobile wallets in recipient markets, reducing the opportunity for inbound remittance. The report claimed that regulatory complexity had been the primary hurdle.
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 report author Windsor Holden.
While international cash remittance growth has been slow, transaction volumes have surged in the 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 findings from the report include: nearly 400 million mobile phone users worldwide are expected to use their handsets for mobile money transfer by 2018; and mobile money taxes in sub-Saharan Africa are threatening the growth of domestic money transfer services.