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Western Union piloting mobile remittance in UAE

Money transfer leader focused on enabling Cash to Mobile services in Middle East this year

Khalid Fellahi, Senior VP, Africa and Global Head of Mobile Transaction Services at Western Union.
Khalid Fellahi, Senior VP, Africa and Global Head of Mobile Transaction Services at Western Union.

Western Union is focused on offering mobile money transfer services in the United Arab Emirates and has already deployed a pilot programme with several exchange houses in the country.

The service, once fully deployed, will allow customers to send and receive funds using their mobile phone.

"Western Union's Agent expansion plans for 2010 include a strong focus on the Middle East and the UAE specifically - enabling the ‘cash to mobile' service model. Additionally, as mobile wallets are introduced by MNOs in the UAE, it will pave the way for international mobile money transfer transactions to be available as well," Khalid Fellahi, senior VP, Africa and global head of Mobile Transaction Services at Western Union told itp.net.

The Cash to Mobile model Fellahi refers to sees customers take money to participating Western Union agents in the country, providing a recipient's mobile number to send the amount to.

"To date we have conducted pilot programmes with Wall Street Exchange and Orient Exchange in the UAE focusing on cash to mobile between the UAE and the Philippines. Further deployment of these services will be dependent on the result of the pilot," Fellahi explained. "In total, there are currently 19,000 Western Union Agent locations enabled with Mobile Money Transfer services in 10 countries, and that number is expected to grow to 75,000 before year end 2010."

Western Union currently has mobile money transfer partnerships with select mobile operators around the world, including Globe Telecom and Smart Communications in the Philippines, Orascom and Zain in the Middle East, Safaricom in Kenya, Maxis in Malaysia, and others that haven't gone public as yet. Noticeably missing are operators from the Indian subcontinent.

In January, local mobile operator Etisalat said it would launch a mobile remittance service for Indian expatriates in 'coming months'. When it was announced at the time, the service was regarded as a threat to the healthy profits exchange houses presently enjoy from business in the UAE and Gulf as a whole.

Western Union however is already embracing that trend by pushing its own mobile money service in the region. In 2008, Western Union and Cairo-based Orascom Group signed an agreement to offer mobile remittance services to Orascom subscribers and, the following year, Kuwait-based Zain Group announced a similar agreement for its Middle East and Africa subscribers through its Zap platform.

While both operators are yet to kick off the service, Fellahi revealed that it would be commercially introduced in select countries only once mobile wallets were launched by the operators and "regulatory approval for mobile-based international money transfer has been secured".

Research firm Informa predicts that 73 million people will be sending money internationally using their mobile phones by the end of 2013. Western Europe, North America and the Middle East and Africa regions are expected to account for more than 75% of the global international mobile money transfer gross transaction value.