Vodafone will target the one million people in the UK who send money overseas, as it hatches plans for a cross-border money transfer scheme.
Some of the operator’s senior executives believe there is huge potential in taking on money transfer incumbent Western Union, and tapping into migrant workers in the UK, which represent 2% of the UK workforce, and contribute between £2bn and £5bn of the total economy, according to official figures.
British customers will be able to send money to India, Turkey, Egypt and South Africa over their phones if Vodafone presses ahead with plans to take its ‘m-pesa’ scheme international.
One industry expert said: ‘Vodafone will run it at a much lower cost than Western Union. They can make money transfers much more affordable for more people.’
A Vodafone spokeswoman said the operator is currently in discussions with the financial regulator, FSA, over its proposal.
Vodafone has partnered with Citibank and is currently using the service for domestic money transfer schemes in developing countries, where people in cities send money back to families in rural areas.
The service launched in its Kenyan division 18 months ago, and reached 1.6 million customers in its first year. It is also available in Afghanistan and India.
Telefonica-O2 has also recently started a scheme allowing customers in its US market to send money to Mexico.
Mobile money transfers work in a similar fashion to a pay-as-you-go
top-up, and allow the user to send a text message with a pin code to
another person (not necessarily on the same network) who can access the money.
Nick Hughes, head of mobile payment solutions, said: ‘There is huge potential to deliver international remittances and we are currently piloting this between Kenya and the UK. We hope to launch this over the coming months.’