Global mobile money seen to reach $202 billion in 2012

MANILA, Philippines - The magnitude of global mobile banking is forecast to hit $202 billion by 2012, and 60 percent of that will emanate from the Asia Pacific region.

Foreign consulting firm Edgar Dunn & Co. added that the Philippines, China, and India would be leading the way in the Asia Pacific region.

Lance Blockely, managing director of Edgar Dunn & Co. said that the Philippines is the global leader in mobile money transfer (MMT) and “the next few years will be a climate of explosive growth for mobile money transfers.”

By 2012, 364 million low-income, un-banked people could use mobile financial services. Likewise, the number of people without a bank account but with a mobile phone is estimated to grow from one to 1.7 billion.

This were some of the conclusion arrived at during the recently-concluded Mobile Money Transfer (MMT) Asia Pacific (APAC) conference in Manila, that brought in experts, providers and representatives of MMT practitioners from all over the world.

MMT Conference chairman John Owens noted that MMT initiatives are increasingly focusing on the importance of strategic partnerships between banks and mobile money issuers that build mobile money ecosystems, that include the base of the economic pyramid.

Owen is also the chief of party for the Rural Bankers Association of the Philippines (RBAP) — Microenterprise Access to Banking Services (MABS) program, supported by United States Agency for International Development (USAID) in the Philippines.

In the Philippines, the Bangko Sentral ng Pilipinas (BSP) is credited for being a progressive and flexible monetary regulator. Earlier, the BSP was singled out as the first central bank that spearheaded microfinance.

Mobile phone banking started sometime in 2000, and has since expanded with blinding speed. Both Smart Philippine Inc. (Smart) and Globe Telecommunications Co. (Globe) have since introduced programs and systems for mobile banking. They have likewise and partnered with bank and non-bank financial institutions to bring electronic money (e-money) to the under-banked and un-banked.

“Experts from around the world learned from the successful mobile money initiatives in the Philippines and discussed the directions that the market place is now moving in. Filipino mobile money leaders, Globe and Smart, and their rural and commercial bank partners, are considered pioneers in the mobile money transfer field,” Owen assessed.

Smart will expand its Smart Money electronic wallet (e-wallet) service to underserved and unserved markets under its Island Activation program.

Smart president and chief executive officer Napoleon Nazareno said there are more than 2.3 million active users of Smart Money. The subsidiary of the Philippine Long Distance Telephone Co. (PLDT) has also hooked up with MasterCard for mobile banking in Brazil.

Globe introduced GCash, an e-Wallet system, and the rural bankers immediately embraced the system. Partnering with over 50 rural banks, the system has surpassed P5-billion transactions.

Globe president and chief executive officer Ernest Cu said it now has 1.2 million customers use G-Cash to send and receive cash, and make payments via text messaging. “Globe G-Cash is the most pervasive and possibly the biggest cash-in and cash-out network in the country,” he told the forum attendees.

Earlier this year, the Bank of the Philippine Islands (BPI), Ayala Corp. and Globe jointly formed BanKo Savings Bank, the first branchless bank utilizing mobile banking technology. It will virtually have a “manual” automated teller machine (ATM) through a partnership with over 15,000 Globe agents.

BSP Governor Amando M. Tetangco Jr., during his opening remarks at the conference said that the Philippines’ experience in MMT represents solid proof that the convergence of ideas for service innovations can create new pathways that benefit and transform lives of millions of people.

“In the Philippines, the major drivers for MMT are a large domestic market, our ground-breaking telecommunications companies, the continuously expanding banking sector, and responsive regulators,” Tetangco added.