How phone operators use SMS for cash transfers

BARCELONA, Spain, Feb 12, 2008 (AFP) – In many poor and emerging countries, the lack of banking infrastructure but widespread use of mobile phones has created a business opportunity that network operators are keen to exploit. On Monday, British operator Vodafone announced at the industry’s annual trade show in Barcelona that it would launch a money transfer service in Afghanistan after the successful introduction of a similar initiative in Kenya.

An estimated 1.6 million people have begun using the Vodafone scheme in Kenya since its launch in March last year. In a country of 10 million mobile phone users, there are only 400 bank outlets and 600 automatic teller machines.

“This is really the early days, but when you see the low banking penetration in emerging markets, compared to rapidly growing mobile penetration, the potential is very big,” said James Moberly, senior manager for payment solutions at Vodafone on the sidelines of the Mobile World Congress here.

The GSM Association, the global mobile phone industry body, estimates that about a dozen such schemes involving money transfer services are in operation throughout the world, with 10 million users.

Vodafone plans to launch cash transfer services soon