A recent partnership between Western Union Co. and Toronto, Canada-based electronic-wallet provider EnStream LP will enable Canadian consumers to send funds both domestically and internationally using their mobile phones. The companies plan to launch a pilot in Canada in December.
EnStream, a mobile-commerce joint venture between Bell Canada, Rogers Communications and Telus Corp., developed the Zoompass Mobile Wallet to enable consumers to send mobile domestic fund transfers. Zoompass is a downloadable application tied to either a bank account or credit card and works on most smart phones, including the Apple Inc.’s iPhone, Research In Motion Ltd.’s BlackBerry and Google Inc.’s Android. Eventually, EnStream plans to enable Zoompass users to use the mobile wallet to make remote and contactless payments, Robin Dua, EnStream president, tells PaymentsSource.
Through the partnership, Zoompass users will have to upgrade their mobile-wallet application to include the Western Union service. Once consumers upgrade the application, they will have the ability to send funds internationally.
EnStream charges no fees to transfer funds through Zoompass domestically. But once EnStream integrates the service with Western Union, consumers will pay a fee for international transfers that will vary depending on country. Western Union declined to comment on the fee structure.
EnStream is collaborating with Western Union to add the international funds-transfer service because “Canada is a very large remitter of funds to other countries because of the diverse population of the country,” Dua says. Canadian consumers have family and friends living in international markets, “so this system makes it easier of them to send funds without having to visit a Western Union location and fill out paperwork, and they may send the funds from home, work or while on the road,” he adds.
In Canada, 48% of 1,000 international funds-transfer senders Western Union polled online in April said they likely would sign up for mobile-transaction services, while 17% said they would definitely use the services to send funds, according to Western Union.
Domestically, many Canadian consumers use funds-transfer services to pay babysitters, nannies or friends they owe money, Dua says. Being able to pay through a mobile phone eliminates the need to visit an ATM or bank to get cash or writer a check, he notes.
This type of service most likely will “replace cash over time as more consumers adopt smart phones. I really think we will see a day when consumers will not have to visit an ATM or write checks to send money,” Dua adds.
Recipients of the funds transfers are notified through e-mail or text message and may pick up the money in cash at any Western Union location. They also may have the funds deposited directly into their mobile phone account if their country provides a similar electronic wallet service, Brian Fox, senior vice president and general manager Canada for Western Union, tells PaymentsSource. Consumers in the Philippines, Kenya and South Africa already may deposit transferred funds directly into their mobile wallets, Fox says.
“Person-to-person payments are really starting to take off, and mobile technology is one way to allow for this to happen,” Adil Moussa, an analyst for Boston-based Aite Group, tells PaymentsSource.
And Western Union is smart to link another payment option to a mobile phone and to partner with a company that “can allow it to offer fund transfers on a wider basis to countries like Canada and others with a large remittance,” Moussa adds.
Additionally, “consumers will adopt this type of technology, as it is the way of the future,” especially because “many international consumers do not have Internet access and have to rely on their phones for the bare necessities, which include communications such as fund transfers,” he notes.
Western Union’s Money Transfer Service is available in 25 countries.
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