MoneyGram International and the National Bank of Abu Dhabi have partnered to make international money transfer services via mobile phones available for the first time to the bank’s customers.

The United Arab Emirates-based National Bank of Abu Dhabi claim to be the first bank in the Middle East and North Africa region to enable international remittances via mobile phones to more than 200,000 locations across 190 countries worldwide.

The Arrow mobile phone payment service and its expansion into international remittance is a way for NBAD to differentiate itself from competitors.

The agreement, which significantly expands MoneyGram’s presence in the United Arab Emirates, will enable NBAD customers to initiate mobile money transfers virtually any time and anywhere, without the need to go to a retail location.

The mobile money transfer service enables NBAD customers with an Arrow account or an NBAD-issued prepaid card to transfer money via their mobile phone.

Those who have no accounts at NBAD or not holding an NBAD-issued prepaid card can still use the Arrow service by using Visa co-branded prepaid cards.

Mobile Commerce Daily’s Dan Butcher interviewed Thomas Christopherson, London-based head of new product and channel development at MoneyGram. Here is what he had to say:

What is the strategy behind the partnership between MoneyGram International and National Bank of Abu Dhabi?
The strategy for MoneyGram is to provide our money transfer services to as many customers as possible via multiple channels.

We also want to provide multiple options to our agents and for them to pick what channel suits their own needs.

What does it mean for the mobile money transfer/remittance services ecosystem?
It opens up the ultimate convenient channel for customers, a channel that is always open and accessible.

Convenience is a key motivator for customers alongside price and trust.

With our competitive pricing and the trusted MoneyGram brand, the mobile channel is one of our key strategic initiatives.

This service is a first for the Middle East and I am sure will be followed by others.
We will be getting feedback from our customers to continuously improve how the service works.

What is the mechanism for consumers to transfer money via their handsets?
The customers register themselves and their receivers online. They then send a very short text message to a short code to get a transactions quote, for example “cost mum 100,” and send a second message to confirm the send after they recieve a quote for that transaction.

What is the target demographic of this initiative?
The service is available to NBAD banked customers but also to the holders of NBAD prepaid cards. These cards are given by employers to their employees without bank accounts, of which a large proportion are immigrants.

What is the current state of mobile money transfer services?
There is an increasing number of pilots and launches around the world, both send from mobile and receive onto mobile. Send from mobile initiatives are from progressive financial institutions all around the world.

MoneyGram launched the first global send and receive service in November 2009, offered by Poste Mobile, the mobile network operator owned by the Italian Post Office.

Send to mobile is mainly to countries where Mobile Network Operators have developed a sizeable m-wallet infrastructure.

The only two countries where there are over 2 million mobile wallets are the Philippines and Kenya.

MoneyGram launched a service earlier this year where any customer can go to any U.S. location and send to a SMART Money wallet in the Philippines.

In this service, we allow receive customers to register for the mobile wallet after the sender has initiated a transaction, another global first.

The current industry practice is to create bilateral agreements. Some industry players are creating hubs to increase the speed of connecting carriers with financial institutions and multimodal transport operators like MoneyGram.

I do not believe there will be a single hub but a series of multiple hubs that will organically increase the network.

A cash in or cash out facility is a critical part of that network to facilitate the adoption of mobile money transfer.

What do you expect over the course of 2010 and beyond?
I expect many more activities to continue to occur on mobile money transfers. There is no question that mobile will be a key channel for financial services, including money transfer.

The speed at which the behavior shifts will be driven by how the industry meets the customer needs around the three key factors: convenience—make it easy to register and use; trust—no room for operational glitches, as a lost transaction is not the same as a lost ringtone purchase; and price—the fee drives the size of transactions, not vice versa.

I believe that “Build it and they will come” is not a winning strategy for mobile money transfer and does not take into account the hurdles the customer has in changing behavior from their current trusted methods. I believe some, but not all, in the industry are waking up to this reality.