Mobile money to reach $202 billion in 2012

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The magnitude of global mobile banking is forecast to hit $202 billion by 2012, and 60% of that will emanate from the Asia Pacific region.

Foreign consulting firm Edgar Dunn & Co. adds that the Philippines, China, and India will be leading the way in the Asia Pacific region. Lance Blockely, managing director of Edgar Dunn & Co. says that the Philippines is the global leader in mobile money transfer (MMT) and ‘the next few years will be a climate of explosive growth for mobile money transfers,’ writes Ted Torres of The Philippine Star.

By 2012, 364 million low-income, un-banked people could use mobile financial services. Likewise, the number of people without a bank account but with a mobile phone is estimated to grow from 1 billion to 1.7 billion. These were some of the conclusion arrived at during the recently-concluded Mobile Money Transfer (MMT) Asia Pacific (APAC) conference in Manila, that brought in experts, providers and representatives of MMT practitioners from all over the world.

Conference chairman John Owens noted that MMT initiatives are increasingly focusing on the importance of strategic partnerships between banks and mobile money issuers that build mobile money ecosystems, which include the base of the economic pyramid.

Owens is also the chief of the Rural Bankers Association of the Philippines (RBAP) – Microenterprise Access to Banking Services (MABS) program, supported by the US Agency for International Development (USAID) in the Philippines. In the Philippines, the Bangko Sentral ng Pilipinas (BSP) is credited for being a progressive and flexible monetary regulator. Earlier, the BSP was singled out as the first central bank that spearheaded microfinance.

Mobile phone banking started sometime in 2000, and has since expanded with blinding speed. Both Smart Philippine and Globe Telecommunications have introduced programs and systems for mobile banking. They have partnered with bank and non-bank financial institutions to bring electronic money (e-money) to the under-banked and un-banked.

‘Experts from around the world learned from the successful mobile money initiatives in the Philippines and discussed the directions that the market place is now moving in. Filipino mobile money leaders, Globe and Smart, and their rural and commercial bank partners, are considered pioneers in the mobile money transfer field,’ comments Owens.

Smart will expand its Smart Money electronic wallet (e-wallet) service to underserved and unserved markets under its Island Activation program. Smart president and CEO Napoleon Nazareno says there are more than 2.3 million active users of Smart Money. The subsidiary of the Philippine Long Distance Telephone Co. (PLDT) has also hooked up with MasterCard for mobile banking in Brazil.

Globe introduced GCash, an e-Wallet system, and the rural bankers immediately embraced the system. Partnering with over 50 rural banks, the system has surpassed PHP 5 billion in transactions ($110 million). Globe president and CEO Ernest Cu says it now has 1.2 million customers use G-Cash to send and receive cash, and make payments via text messaging. ‘Globe G-Cash is the most pervasive and possibly the biggest cash-in and cash-out network in the country,’ he told the forum attendees.

Earlier this year, the Bank of the Philippine Islands (BPI), Ayala Corp. and Globe jointly formed BanKo Savings Bank, the first branchless bank utilizing mobile banking technology. It will virtually have a ‘manual’ automated teller machine (ATM) through a partnership with over 15,000 Globe agents. BSP Governor Amando M. Tetangco Jr., during his opening remarks at the conference said that the Philippines’ experience in MMT represents solid proof that the convergence of ideas for service innovations can create new pathways that benefit and transform lives of millions of people.

‘In the Philippines, the major drivers for MMT are a large domestic market, our ground-breaking telecommunications companies, the continuously expanding banking sector, and responsive regulators,’ Tetangco added.