Mobilising money

e-Commerce initiatives are growing in popularity. While mobile banking is a good way to service the expatriate community in the UAE and the Middle East, it also gives the vital access to money services for the unbanked population in developing countries.

Etisalat announced its mobile money remittance service at the end of March, giving its subscribers the means to transfer money home at the touch of a button. It forms part of the UAE operator's e-commerce ecosystem, which started back in 1999 when it first launched its lauded e-payment platform.

The operator has certainly made a case for offering such services in the UAE. The country's high mobile penetration - often cited as anywhere between 100-150% - along with the relative number of ATM machines and bank branches leads logically to mobile banking.

"This is like one-to-one banking," says Abdulla Hashim, vice president, marketing, Etisalat. "The mobile penetration in the UAE is among the highest in the world, exceeding 6.4 million users. There is a huge gap in terms of ratio between the number of mobile users to banks and ATMs.

Another factor is that the UAE has a huge expatriate community, primarily from the subcontinent. This makes the country one of the top money-sending nations in the world.From studies back in 2005 from the International Chamber of Commerce, more than US$7 billion was transferred out of the UAE. The World Bank estimates that 50% of the money is transferred through unofficial channels. We've seen the market is fragmented and there are a number of aggregate channels," Hashim adds.

The service is made possible through a number of key partnerships, in the telco, government and banking spaces. Etisalat is working in association with Mashreq Bank (in the UAE), HSBC India and Indian operator Idea Cellular to facilitate the service.

Tata Communications will act as an intermediary between Etisalat and Idea Cellular.

The current phase allows transfers to over 40,000 Indian branches, but with talks ongoing, this is likely to be expanded to more countries and more banks.

"The first thing is enabling money transfers by using a mobile handset," Hashim explains. "It is with you everywhere, and this is an important value proposition by giving convenience to the customer.