Three Firms Combine on Cellphone Remittances
Tuesday, April 1, 2008
Sending money back home? Just press "talk."
That's what Western Union, Radio Shack and the small wireless carrier Trumpet Mobile hope millions of Hispanic immigrants will do with a new service announced yesterday.
Though financial turmoil has put credit card, mortgage and auto markets at a standstill, the flow of money immigrants send overseas continues to increase.
In 2007, $65.5 billion in remittances were sent to Latin American and Caribbean nations, up 7 percent from the previous year, according to the Inter-American Development Bank.
That, combined with the fast-growing sales of cellphones among immigrants in the United States and developing countries, has caught the attention of Western Union, which offers wire transfer services and in 1861 set up the first transcontinental telegraph line in North America.
"There are 3 billion mobile phones globally. We see mobile operators and an emerging mobile wallet as a tremendously interesting new market segment for Western Union," said Matt Dill, general manager of Western Union's mobile unit.
The service is aimed at Hispanic immigrants, who are more likely to have a cellphone than an Internet connection through a home computer, according to Gus West, president of the Washington-based Hispanic Institute.
Under the plan, a customer could buy a Trumpet Mobile phone, which costs $29.99 at Radio Shack. The user can load the phone with money through Western Union. To send money to a relative Nicaragua, for example, a customer would specify the amount and the recipient over the phone. The money would then be debited from the customer's account and routed to a local agent in Nicaragua, who would dispense the money to the relative.
"A laborer in the U.S. is looking for the best, least expensive and fastest way to get money back home and that is what is generating this interest," West said.
The announcement expands Western Union's cellphone money-transfer services, which are also available in the Philippines and India.