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Western Union spreads mobile money transfer across Africa

January 18, 2011

A man cashing in an M-PESA mobile voucher

A man cashing in an M-PESA mobile voucher

Global payment services provider Western Union Co. and United Bank for Africa Plc have expanded their partnership to increase the reach of money transfer.

The Western Union Money Transfer service is now live across more than 500 UBA locations in Nigeria. This adds to their existing joint offering in Burkina Faso, Guinea, Senegal and Tanzania, with Gabon and Kenya to be added in the near future, bringing Western Union’s agent network in Africa to nearly 21,000.

Mobile Commerce Daily’s Dan Butcher interviewed Khaled Fellahi, senior vice president of electronic channels at Western Union, Denver. Here is what he had to say:

What is the strategy behind the expansion of the Western Union and United Bank for Africa joint venture to additional countries?
In Africa as in other regions, relationships with other service providers such as banks allow us to extend our network so that Western Union customers can send and receive money in more and more locations.

We now have close to 21,000 agent locations in 49 countries in Africa.

Western Union continues to work with banks to offer more flexible services to its vast range of customers.

Western Union is proud to offer its services through a variety of classes of trade, including retailers, banks and post offices, to make sending and receiving money quick and convenient for people around the globe.

Our global network and multichannel offering is a unique value proposition to the banks who want to work with us.

What is Western Union’s roadmap for the growth of mobile remittances?
The mobile remittance market is growing at an incredible pace and Western Union aims to play an important role within it.

Even though mobile transactions are electronic, the ability to get physical cash in and out of the network is critical.

Most developing countries are still cash-based economies.

Setting up a physical branch network for cash movement is a critical success factor for mobile financial services in the developing world and Western Union’s agent network globally will provide additional locations for people to initiate transfers to mobile accounts or “cash out” their accounts.

Western Union is already very active in the global mobile remittances market.

Western Union is becoming a central hub for carriers, banks and technology vendors by linking them to our unparalleled cross-border network.

We have also been endorsed by the GSMA as a key partner for the development of this channel.

Western Union sees mobile money transfer technology as a new opportunity, particularly in the emerging markets.

In Africa, Western Union has already announced agreements with Absa Bank in South Africa, as well as with Vodafone and its sister company, Safaricom, in Kenya.

Now, consumers in Britain can visit 12,000 Western Union agent locations to put cash on the counter and send directly to the mobile phones of the 12 million Safaricom M-PESA subscribers in Kenya.

In addition, British consumers can visit Western Union’s Web site at to send a money transfer to an M-PESA subscriber.

Most recently, Western Union has signed a commercial agreement to introduce international mobile remittance services in the 21 countries where MTN operates using MTN’s MobileMoney accounts.

Elsewhere, Western Union also has agreements in place with carriers in the Philippines (Smart & Globe), Malaysia (Maxis), Zain (Airtel), Tunisia (Tunisian Post), State Bank of India and Bank of Commerce and Development in Libya, and we anticipate establishing more agreements of this sort to extend our participation.

What is driving the growing demand for mobile financial services?
The demand for mobile financial services is being driven by two key factors: the incredibly fast pace of mobile penetration in the developing world and the inaccessibility of traditional financial services to large percentages of the population.

Africa is representative of this situation. Across the continent large percentages of consumers remain unbanked, but more and more Africans have access to a mobile phone.

Mobile phones have transformed the continent.

Mobile phones represent more than 90 percent of all telephone lines in Africa.

Market penetration passed the 50 percent mark in 2010 and, in the continent’s most advanced markets, it has passed the 100 percent penetration mark, according to Research & Markets.

Mobile banking and transfers therefore offer a great opportunity to reach the unbanked.

Demand is also being driven by the fact that the advantages of mobile financial services are also becoming clearly apparent.

For example, as an alternative to carrying cash, mobile money offers considerable security to consumers, and it is also a cost-effective means of transferring what are usually small sums of money on a domestic scale.

What is the outlook for mobile remittances/money transfer and the payments space in 2011?
Remittances are essential services – many people who are receiving remittances around the globe are dependent on that money.

Even through the economic downturn remittances have shown some resilience, per the World Bank, and while Western Union has seen some slowdown in some markets, we have also seen growth in some corridors.

At the same time, international migration is a trend which is expected to continue, according to the World Bank.

Mobile money is the next frontier in emerging economies.

For telecoms companies, data services and money transfer represent an increasingly important source of revenue, and for the banks, mobile banking services are a means to reach more and more unbanked adults.

Mobile money transfer is a space where there will undoubtedly be growth as more and more carriers and banks introduce the service. And there is clear role for Western Union in this scenario to get cash into the mobile money system.

Final Take
Dan Butcher, associate editor, Mobile Commerce Daily

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Dan Butcher is associate editor on Mobile Commerce Daily and Mobile Marketer. Reach him at

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