Financial companies and other vendors are increasingly pitching mobile payments as a method for unbanked immigrants to send remittances across borders, but analysts caution that the market remains immature.
Cyphermint Inc. announced Monday that it is rolling out its "mobile wallet" to 20,000 customers in the United States. The vendor is pitching the service, PayCash Mobile Wallet, as a way to send remittances home.
The mobile feature of the service, which lets recipients withdraw funds at any participating automated teller machine around the world, is an upgrade of an online payment system that Cyphermint has offered in the United States since 2001.
The Marlborough, Mass., company said it is converting its 6 million accounts worldwide to make the service accessible through the Web browser in a mobile device, such as a cell phone.
Last week Citigroup Inc. announced a similar remittance service in conjunction with Vodafone Group PLC, a British wireless provider with operations in 25 countries. The two companies said they planned a trial of the phone-based service in the United Kingdom and Kenya, followed by a commercial launch focusing for the near future on markets in Eastern Europe and Asia, such as Poland and India.
The Vodafone-branded service would allow a customer to set up a remittance using either a mobile phone or a Web site, with the funds going either to a bank or to the recipient's phone, using an on-screen voucher and personal identification number. The recipient could redeem the cash from various outlets, such as places that offer cell phone services.
MasterCard Inc. said last week that it is exploring the wireless remittance business, in conjunction with the GSM Association, a trade group for mobile phone operators.
The Purchase, N.Y., card company said it and the association would develop a pilot test of a system that lets people use a phone to fund prepaid cards for friends and relatives in other countries. Recipients would receive notification about payments through text messages.
Gwenn Bezard, an analyst at the Boston research and advisory firm Aite Group LLC, said a few such systems are already in operation around the world, such as one in Singapore that guest workers from the Philippines can use to send money home.
The challenge is to find a strategy that will make these emerging technologies economically viable to providers and attractive to the target market, because the systems require extensive networks through which the recipients can get the money, typically in the form of cash, he said.
"From a technology standpoint, it's not science fiction. It's do-able, and it works," Mr. Bezard said. "The question is at what speed and which players will be able to crack the code of a business proposition."
Aaron McPherson, the research manager of payments at Financial Insights Inc., a unit of the Boston technology publisher International Data Group Inc., said he is skeptical of the Cyphermint initiative, because it appears not to have the backing of the phone companies, the way the Citi and MasterCard projects do.
"Carriers don't like to support mobile wallets, because they prefer to keep the discount fee when a purchase is made online, by adding the purchase to the phone bill," Mr. McPherson said in an e-mail.
He cited PayPal Mobile, an offering by eBay Inc.'s PayPal Inc. that relies on the Short Message Service standard that mobile devices use to send text messages.
"SMS messages are an already accepted form of payment for purchases from the mobile Web and would have the incumbent's advantage," he said.
