UAE pilots mobile money transfer system

The UAE has started testing a new money transfer scheme which allows people to use a mobile phone to transfer cash, according to Jean Claude Farah, regional vice president of Middle East, Pakistan and Afghanistan at Western Union.

The service is currently being trialled in two corridors worldwide – Hawaii to Philippines and UAE to Philippines.

“We are trying to combine services so that people would be able to send a money transfer through a mobile phone,” he told Arabian Business on the sideline of the Mobile Money Transfer Conference (MMT) in Dubai.

The latter country was chosen as the receiving end due to its large immigrant communities in both the UAE and Hawaii.

Additionally, in the Philippines the mobile network has m-wallets to enable the service.

“For a mobile operator to be able to provide mobile money transfer they should enable their phones with m-wallets. The m-wallet is a capacity for mobile phones to store funds to accept money transfer,” said Farah.

“Currently, Western Union is testing a business model where you go to one location in the UAE. For the sender it doesn’t make any change – this is a money transfer transaction, a normal one. They give the cash at the location which is then sent to the Philippines to a mobile phone,” he added.

The receivers will get the money on their mobile phones and can either pay, through phone, at various shopping outlets where such payment is accepted or “push the money out of the m-wallet” on their phone in order to get “physical cash”.

“The test we are running is from the UAE to the Philippines. In the Philippines you have around 6,000 merchant locations where the mobile phone payment is accepted. Instead of paying with the credit card you pay with your phone and the funds get debited from the amount that you have on the device,” explained Farah.

Mobile money transfer has been in the planning for at least three years, but the service is still at its “infancy”. While implementation has commenced, it is still a “trial and error” period.

“I don’t think it will replace the usual money transfer but it will be another choice we can give the customer,” he said.

Farah added the service targeted anyone looking for the choice of not physically going to a location to transfer money.

“We are also targeting everybody who would like their receiver not to go to a location but get the money over their mobile phone. We think that mobile money transfer is a higher frequency transaction but lower amount so people will tend to send more but in lesser amounts.”

The service is not more expensive than the conventional money transfer method, according to Farah, however prices have not been finalised at this stage.

“We are collecting a lot of feedback from the customers so the pricing is not final. The ceiling of the amount you can send is not final.”